From his apartment in 1999, Marc Benioff started a new-fangled software company, Salesforce.com (CRM). While there have been some missteps along the way, the company is a model of success. Today, Salesforce.com generates more than $1 billion in sales, is profitable and has a market cap of $9 billion.
How did Marc do it? Well, now we have a chance to find out. That is, he has written an excellent book about his experiences and strategies, called Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion-Dollar Company -- and Revolutionized an Industry.
Let's take a look:
Find the pain points: Before starting Salesforce.com, Benioff spent his career in the software business and saw the many problems -- bad service, complex applications and high pricing. From this, he was able to rethink the traditional model:
- Respond to customers within 24 hours.
- Deliver the software via the Internet so as to drive down costs.
- Design the software to look like a consumer app, such as Amazon.com (AMZN) or eBay (EBAY).
- Charge for the software on a subscription basis, not with heavy upfront fees.
At first, there was much skepticism about this new approach. But, that's inevitable when there is a big change in the industry. Yet, if done right, the results can be staggering.
Something else to consider: Benioff was not just interested in creating cool technology. Instead, his laser focus was on "customer success."
Work for great companies and people: If possible, try to work for the top company in your industry or get a great mentor. Keep in mind that Marc had a chance to work with Steve Jobs at Apple (AAPL) and Larry Ellison at (ORCL).
According to Marc, Jobs showed that you need to "think differently in everything you do."
Marketing, marketing, marketing: In today's world, it's extremely tough to stand out from the noise. To this end, Marc realizes the importance of creating a marketing-obsessed culture.
However, the first step is to put together a clear message and make sure everyone in your company can repeat it. Writes Marc: "Position yourself as the leader or against the leader in your industry. Every experience you give a journalist or potential customer must explain why you are different and incorporate a clear call to action."
Once you do this, get creative with your marketing. Here are some of the things Marc did:
- Create a button that says Software but has a red line through it. Of course, Marc wore it everywhere.
- Acquire the phone number 1-800-NO-SOFTWARE.
- Issue press releases -- about new software features -- when competitors announced earnings.
- Put on events, where customers meet and talk about how they use Salesforce.com.
Sales, sales, sales: For many this is a dreaded thing, but you need to do it. And, as you find success, it actually becomes fun.
First, you need to set goals and measure them. For Marc, this means converting a lead to a sale within 30 to 90 days.
Next, you need to be proactive. For example, after an event, Marc would have a stack of business cards. So, on the following day, he and his team would make the calls -- not emails -- to all of the prospects.
Oh, and you need to invest in salespeople. Half of the headcount at Salesforce.com is in sales.
Finally, make sure you leverage your website for sales. This means posting testimonials, providing free trials or promotions, posting helpful resources and allowing for comments and feedback. And again, make sure you respond to your customers. Advertisements and marketing really don't sell your products or services; it's your customers that do. Interestingly enough, they can be your most powerful salesforce.
Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.
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