Salesforce.com: Boosting adoption to power a “customer company”
Salesforce.com announced Q4 earnings late last week and they deserve big congratulations for beating analyst expectations. But amidst the impressive numbers, CEO Marc Benioff said something that really grabbed my attention: he said Salesforce was now focused on being a “customer company.” I think this is a fantastic idea, but it requires focusing on something that I wished Marc would have spent more time discussing: customer engagement. It’s the single most important factor in helping users adopt a product.
As Benioff is a master at keeping Salesforce ahead of changes and trends in the industry, I’m sure that he understands that his words were timely and important because the corporate-spending needle is moving more and more towards CMO budgets as customer retention becomes a top issue. But even Benioff knows how critical customer engagement is – especially for Salesforce. CRM systems have had average adoption rates over time – the majority of CRM providers get only about a 55% adoption rate, according to a 2011 CSO Insights survey. Being a true customer company involves focusing intently not just on selling to customers but on keeping them engaged over time.
You’d think that, because Benioff indicated how Salesforce is amongst the most used enterprise software, reported a 65% increase in number of transactions served and noted the company’s first one-billion-transaction day – granted, quite an achievement – that Salesforce wouldn’t have to worry about adoption. But I remember Marc touting that same 65% figure in Q3 2011. That linear increase in transaction volume could be bent into an accelerated curve through the network effect that improved adoption provides. (As people within an enterprise begin to use a SaaS product more regularly and effectively, their colleagues join them to take advantage of the value the original adopters have created. This means an increase in transactions within existing customers in addition to those that come from the addition of new ones.)
How does a SaaS company fight lack of adoption? They could cover their bases by entering new markets, investing in new technologies and creating additional product offerings. Salesforce, to Benioff’s credit, has already taken this route with Service Cloud, data.com and Marketing Cloud to complement Sales Cloud. And Force.com is being rapidly adopted as a platform for building custom cloud applications.
In addition to expanding horizontally, why not also focus on expanding users’ engagement with products, thereby cementing their value within customer enterprises? Gamification does this by layering game mechanics, reputation mechanics and social mechanics directly on top of applications, allowing customers to measure, reward and analyze their end users’ behavior, maximizing product usage. For example, a sales manager could incentivize her salespeople to follow up with leads in Salesforce more quickly by offering reward points for doing so within a given period of time. When a salesperson achieves a certain number of points, they earn a status badge that’s displayed on their Salesforce profile and automatically shared across the team via Chatter. The sales manager can publicly comment the achievement in real time, thus stimulating the rest of the team to try to achieve the same (or higher) recognition.
Simply put, even if you’re a great software brand, you can’t help your customers achieve real business results unless you’re maximizing engagement of your product over time. I’m impressed by Salesforce’s earnings and by its success in adding new products and customers. In the next earning call, I hope to hear how the company is succeeding in engaging existing customers with its products as well as generating new ones. Then Salesforce will truly be maximizing its potential as “the customer company.”