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7 things Marc Benioff at Salesforce.com taught me

Posted by Arjun Moorthy

Apr 24, 2011 5:41:00 PM

Okay, I have never worked for Marc but I just finished reading his book Behind the Cloud (on the recommendation of my colleague Dharmesh Shah) on the story of Salesforce.com.   In the book, Marc shares several pieces of advice that should be useful to any growing B2B SaaS based start-up. 

 

Benioff

 

Pricing: Moved from single-price, no discount, month-to-month contracts TO multiple pricing levels and discounting for multi-year contracts.  This was driven primarily by cash flow benefits of the latter style.

Market focus: Moved from focus on small business with <50 users TO balanced portfolio of small, medium and large businesses.  While the latter took longer to close, they brought lower churn, higher profitability and credibility to the company.  (Often the installs at larger companies were small but established a base for future growth).

Sales model: Moved from pure inside sales team TO combination of inside and field sales, the latter for > 500 employee companies.  Field presence was required to closer larger customers who still wanted face-to-face contact.

Marketing tactic: Moved from free trial TO buy-and-try.  The change was due to customized trials that showed more complex features of Salesforce that larger clients required.  A cost commitment on both sides meant stronger engagement by both sides.

Support model: Moved from low-price no support TO higher price but with free on-going support included.  The change was driven by the need to keep sustained usage of the product and keep churn low.  Simple rule: Higher usage = lower churn.

Platform: Moved from fee-based usage of APIs TO free model.  No fee APIs encouraged adoption of the Force platform and further reduced churn of the core offering.

Flexibility: Moved from fixed User Interface for all customers TO highly customizable UI via APIs.  The latter further increased “lock-in” of customers as their processes perfectly matched to Salesforce.

The results: $18B market cap in 10 years, 30% annual growth for 5 yrs+ and less than 1% revenue churn/month.  Wow.

Topics: salesforce.com, SaaS

Career Advice I Wish I Knew Earlier 

Hello.  I started this blog to distribute some of the best career advice I have been given over the many jobs I've had.  I've been fortunate to work for and with some great bosses like Francis DeSouzaNancy Kamei and Rick Roberge, and some unique companies, like The Boston Consulting Group, that invest heavily in making each employee a success even after leaving the firm.

The advice and training I received here stands in sharp contrast to my experiences with some not-so-great bosses and companies I've also worked for.  I'm continualy amazed at how valuable good advice has been in my career so I hope to pass on the good advice, and insights from mistakes I've made, via this blog. 

Thanks in advance for your comments, particularly when you can improve upon the ideas posted.

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