Salesforce Price and Value – Both Must Be Understood

Summary

  • Salesforce is the market leading CRM solution. Some people suggest acquiring the market leader comes with a price premium. That may or may not be true.
  • Whether this application pays dividends or just results in higher total cost of ownership (TCO) depends on how you use it, or more specifically, if you use the capabilities that separate it from its competitors.
  • Here we share those Salesforce capabilities that can increase technology ROI and put cost and value into perspective.
Johnny Grow Revenue Growth Consulting

From my three decades of helping clients design and implement many different Customer Relationship Management applications I have learned there is no one-size-fits-all CRM solution. Salesforce is a platform that I have a lot of experience with. I find it is a very strong solution for many companies, but not for every company. If looking at subscription price alone, it can appear to come with a price premium. But that investment must be considered in the context of measurable value and ROI.

So, is the Salesforce price worth the investment? Here's how to tell.

Transformation Enablement

Salesforce (SFDC) is an innovator and industry disruptor. Its platform software includes many advanced capabilities to help clients innovate and disrupt their markets. Those capabilities include things like the following:

  • Digital transformation, which is really a business transformation strategy that figures out how to use digital technologies or channels to lower operational costs, better engage customers and create new value.
  • Data transformation, to convert data from a raw material into a finished good, such as customer intelligence or buyer insights.
  • Customer experience management, to deliver relevant, personalized, contextual and even predictive customer experiences that impress customers and build loyalty.
  • Omnichannel communication to engage prospects and customers in their preferred digital channels, while maintaining conversation fidelity when those discussions cross channels.
  • Einstein AI to shift CRM software from a customer data depository to a predictor of customer behaviors, creator of customer insights and facilitator of customer and company objectives.
  • Extensibility tools such as its Lightning platform (Force.com), Apex, other Platform as a Service (PaaS) tools and AppExchange ecosystem.

Can other CRM applications do these things? Some can, but in these areas, SFDC leads the pack.

Companies with clear eyed plans for company or product innovation, or digital or business transformation, or some type of hypergrowth strategy will benefit from the market leadership of SFDC.

Companies who are pioneers and trailblazers and fully leverage the SFDC advanced capabilities will likely earn increased ROI, making the subscription price an investment that pays some big dividends.

Salesforce Price and Value

Transformation Illusion

When going off to college my mom told me never to go grocery shopping when hungry. I should have listened better. Because when I went to the supermarket a bit famished, all kinds of foods I had previously ignored looked interesting. However, those interesting foods later sat in the kitchen cupboards until they expired or I just threw them out.

Too many CRM software buyers make a similar mistake. They are hungry for a new solution and all of those cool features, functions and advanced capabilities that they never knew existed before the demo suddenly look interesting.

However, reality sets in after the purchase. They have finite budget, resources and time. Visions of business transformation become illusions. Those visions were never really part of any business plan or slated transformation effort. They were more aspirational. But they sure sounded exciting at the time.

Instead of using AI to drive guided actions, or omnichannel engagement to communicate across social networks, many buyers implement CRM software to perform account, contact and opportunity management. You know, the basics, the tasks that every application provides.

Paying a premium price for simple or commoditized capabilities is not a wise financial decision.

The 80/20 Rule

SFDC has evolved its application features and functions over more than two decades. So has Microsoft Dynamics, Oracle CX, SAP and many other competitors. Our research and experience show that when it comes to the fundamentals, about 80 percent of features and functions are highly commoditized and delivered by pretty much every vendor. They all do lead management, account management, opportunity management, forecasting and all the basics quite well.

The CRM 80-20 Rule

Research also shows that many companies use less than one third of their application capabilities. For these companies, the implementation is more of an event than a journey.

But here's the thing. Pioneers, disruptors and growth companies all know that it's the 20 percent portion that delivers the most significant business outcomes and competitive differentiation.

What separates the Customer Relationship Management vendors are advanced capabilities such as industry specific features, machine learning (ML), digital commerce and workflow automation to name a few. Differentiation is also found in advanced technologies such as AI, blockchain or Internet of Things. It also includes tools that enable low code/no-code customization or application extensibility. If these more advanced capabilities accelerate your business growth plan or transformation, SFDC should be a top consideration. Otherwise, alternatives should be considered.

Consider SFDC when:

  • Your company is a trailblazer and will leverage advanced capabilities or technologies to accelerate your growth and transformation. You intend to optimize your CRM.
  • You have a plan, budget, resources and know-how to innovate or disrupt your company or market and require technology to help.
  • You are all in on a new customer strategy, such as Customer Experience Management (CXM), and need technology to support omnichannel engagement, deliver customer insights at key moments of truth, and apply data to deliver differentiated customer experiences.
  • You intend to implement marketing, service or sales best practices.
  • You company is in one of SFDCs industry editions, such as Financial Services, Consumer Goods, Retail or Manufacturing.

Consider other applications when:

  • You seek basic functionality, such as account, contact, activity and opportunity management. You simply want to organize customer data, perform simple tasks such as quotes and get basic reporting (i.e., pipeline and forecast reports).
  • Your company growth goals are less ambitious, or your growth path is more incremental.
  • You don't yet have a transformation plan so you would be putting technology ahead of strategy (never a good idea).
  • You don't yet have a CRM strategy, which would likely result in an aimless technology deployment.
  • You want an enterprise-wide, fully integrated business software suite, that is CRM with Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Human Capital Management (HCM) or manufacturing software delivered from a single vendor with vendor-managed integration.
  • You want an on-premise or hybrid cloud deployment.

SFDC is the market leader for a reason. It does some important things uniquely well. But to get the payback on your investment, you need to take advantage of the application's advanced capabilities. If you do that, you will likely find value to exceed cost by a wide margin.