Marc Benioff on How and Why Salesforce.com Succeeded — My Favorite Plays!

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Salesforce.com is one of the great company builds over the last decade. Their strategies include the best current practices and creative new ideas to test out and their execution is among the best (if not the best).

I have been closely following Salesforce.com for about 10 years and I have used many of their practices as a model and example for our portfolio companies, as the Salesforce.com practices for company building offer great models for our portfolio companies (the Salesforce.com management team was even kind enough to deliver a full-day event with our portfolio companies a couple of years back).

Luckily for all emerging growth technology companies, Marc Benioff and Carlye Adler have now written the Salesforce.com playbook, which describes Salesforce.com’s history in 111 plays.

My strong recommendation is to buy the book for your team and read through the plays a couple of times a year. It contains much of the advice that we give our portfolio companies and the advice has a great proof point given the amazing company that Marc and his team have created.

My Favorite Plays

While all of the 111 plays are highly relevant to all emerging growth technology companies, I pulled my favorite plays out of Marc’s book and organized them into several themes:

1. Get Your Aspirations Right

2. Field Your Best Possible Team

3. Focus on Your Best Customer Segments

4. Create Your Competitive Advantage

 

 

 

5. Build Your Sales and Marketing Factory
The plays for each of these themes are highlighted below along with some additional resources and initiatives that OpenView has created to help our portfolio companies:

Get Your Aspirations Right

Play #2: Have a Big Dream
Play #14: Think bigger

Companies generally don’t get bigger than their vision. I have an example that I use in one of our workshops for portfolio companies where I ask the participants to list all the ways they can make $10 by the end of the day. Once they do that, I ask them which of the ideas can make $100 million. The answer is always “none of them”. My point is that you can’t make $100 million with a $10 vision. While you don’t need to think as big as Marc did to have a big vision, have a big dream and think bigger!

Play #7: Define your Culture and values up front– Marc had a clear idea on the culture and values that he wanted at Salesforce.com and built it from the beginning (an idea shared by Tony Hsieh, founder and CEO of Zappos, that he writes about in his book Delivering Happiness).

Marc wanted the team who built Salesforce.com to be inspired and feel valued and built a culture “simply by doing what we enjoyed.” He writes, for example, that “We wore Hawaiian shirts to instill the aloha spirit in the company” and they brought their dogs to work.

I have found that because there are so many sloppy implementations of this idea that many management teams don’t recognize the importance of vision, culture and values so they don’t create them or they don’t bake them into their companies.

You shouldn’t match the same culture and values of another company, but you should determine what is right for you and go about building it.

OpenView felt the topic was so important that we put together an “Extraordinary Execution Workshop” which helped our portfolio companies put together their aspirations (mission, vision, values) and also establish their management rhythm and we eventually wrote a case study on the workshop. I distilled the ideas from the workshop into a series of articles on the “how to” for building company aspirations and hope to turn it into a free e-book later this year.

What are your aspirations?

Field Your Best Possible Team

Play #5- Pursue Top Talent as If Your Success Depended on It
Play #12- Hire the Best Players You Know
Play #102- Build a Recruiting Culture
Play #103- Recruiting is Sales
Play #105- How to Retain top Talent
Play #106-
The Importance of Mahalo
Play #107- Foster Loyalty by Doing the Right Thing
Play #108- Challenge your Best People with New Opportunities
Play #109- Solicit Employee Feedback — and Act on It

Marc points out through the book that hiring, retaining, and inspiring the absolutely best people is a major factor in building successful companies. I find that everyone agrees with this point, but very few companies execute it in practice. Salesforce.com did, and the results are evident.

At OpenView, we spend much of our time trying to help build management teams and boards and we even have two recruiters on staff in OpenView Labs to help our portfolio companies build their teams. Even though great people and teams is obvious advice, in a lot of ways it is great advice and all companies have obstacles that keep them from implementing it (I identified 6 people related blindspots that the CEO has in a recent post that identifies some of the reasons that companies don’t improve in this area).

Where should you improve your team and/or board?

Focus on Your Best Customer Segment(s)

Play #44: Segment the Markets– Marc describes how Rob Acker convinced Marc to focus more attention on the small business segment (they defined this as businesses with less than 30 employees), as Rob’s analysis concluded that they were having great success with this type of customer (the close rates were higher and the cost of sale was low). They started with a 4-person focus and report that they experienced phenomenal growth over time.

Many management teams have difficulty with the concept of focusing on specific customer segments, possibly one of the most difficult concepts to grasp. To help address this with our portfolio companies, we put together a segmentation forum for our portfolio companies, wrote a case study on market segmentation, and our Research and Analytics group in OpenView Labs has constant projects researching segments on behalf of our portfolio companies.

What is your best customer segment?

Create Your Competitive Advantage

 

Play #18: Differentiate, Differentiate, Differentiate– As an example of how they strived to communicate their differentiation, Marc writes about his No Software mission and how Bruce Campell, his “go to guru” for branding came up with the No Software logo. He describes how they effectively conveyed how they were different. He put the logo on all of their communications materials, wore a “No Software” button every day, and asked their employees to wear a button as well. Marc also describes how the No Software logo is simply a graphic representation of the company and how in order to truly have the differentiated brand “A company must use its people, its products, and its messaging to constantly reinforce the same positive points it wants to demonstrate.”

Play #15: Position Yourself– Marc describes how Salesforce got the positioning as revolutionaries in the market and how every company should position itself as the leader or against the leader in their industries. He also describes how “every experience you give a journalist or potential customer must explain why you are different and incorporate a clear call to action.”

Play #52: Have the Courage to Pursue Your Innovation — Before it is Obvious to the Market– Marc describes how “Salesforce.com creates a lot of noise with its guerrilla marketing stunts, but the engine that really drives our company — the one effort that our success wholly relies on — is producing a service that companies love.” He goes on to describe a number of technology innovations they had to create in order to develop a product that aligned with the vision for the company and was truly different.

To truly have competitive advantage, you need to be different and valuable and you need to communicate these differences really effectively so that you are both different and valuable in the minds of the market participants.

What is your competitive advantage?

Build Your Sales and Marketing Factory-Everyone Markets and Sells in a Systematic Manner!

Play #19: Make Every Employee a Key Player on the Marketing Team, and Ensure Everyone is On Message– Like most companies, the staff at Salesforce.com was not consistent in how they described the company.

Marc describes how he found out that everyone was giving a different answer to the question “What exactly does Salesforce.com do?” He describes how they addressed the issue: their PR firm produced a two-sided laminated card that was a cheat sheet stating in one sentence what they did. It also provided a list of benefits and their newest customers, partners, and awards and how they provided training to make sure that everyone was crystal clear on the message they wanted delivered.

Over time, they even required all customer-facing employees to become “certified” in how to position the service and deliver the messages and they trained everyone on how to overcome objections to the messages.

He writes that “The ultimate result of this meticulous coordination is that everyone is on message with the precision of a sophisticated political campaign”.

Play #40: Make Every Customer a Member of Your Sales Team
– Marc writes “just as we tap every employee as a marketing person, we believed that every customer could serve as a salesperson”. He goes on to write “by offering training and support, we could build a sales army that was not limited to a finite number of Salesforce.com salespeople, but could scale to hundreds of thousands…”. He goes on to discuss in more detail how marketing and sales work together systematically to make this happen.

Play #41: Telesales Works (Even Though Everyone Thinks It Doesn’t)– Marc describes how telephone based approaches to selling work well and how in the early days they were fighting the conventional face-to-face selling techniques used by most software companies.

At this point, telephone-based selling techniques are a lot more common than when Salesforce.com started, but I continue to be amazed at the number of conversations I have with companies claiming that their products can’t be sold over the phone.

We spend a great deal of time educating companies on how telephone based approaches can be used for business development (a.k.a. cold calling), in the early stages of the sales cycle (before having field visits), and for complete sales cycles, so it is great to have Marc pointing this out (as I mentioned earlier, his team was also kind enough to host our portfolio companies and explain how it works and how Salesforce.com uses Salesforce.com).

Play #43: Sales is a Numbers Game– Marc describes how they increased the size of their revenue by hiring more salespeople. The more salespeople they added, the more their sales grew…they discovered that they could not increase revenue simply by trying to get their salespeople to sell more…they needed to increase the number of salespeople.

Marc writes: “Nine times out of ten, companies fail because they don’t set up a large enough sales force and thus have no way to collect enough revenue. Don’t skimp on sales reps: 25 to 50 percent of the employee base should be salespeople…(Half our company is sales.)…You have to grow the distribution capacity by having as many salespeople as you can and by organizing and managing the sales team to ensure productivity.”

Play #46: Your Seeds are Sown, so Grow, Grow, Grow– Marc describes in great detail how they went about adding field sales teams to go after larger enterprise accounts, including how they created their sales methodology and rolled out the field sales units one geography at a time so that they could continue iterating and improving. If you are building a field sales team, I highly recommend that you study this play as Salesforce.com went about building field sales in a very thoughtful manner.

Play #47: Land and Expand– Marc writes “We learned that when you are starting out, you can’t try to capture an entire company at once”. Start in a small division. Companies are looking to limit their risk, and they appreciate an opportunity to take a smaller position, experience the benefits, and then make additional purchases. This is an excellent approach for emerging growth technology companies.

Salesforce.com was built by seasoned professionals and they have done a fantastic job building their sales factory. Marc makes it sound easy in his book, but it isn’t as easy as it sounds.

At OpenView, we spend a significant amount of time helping our portfolio companies build sales factories (including recruiting, helping to set up their methodologies, helping to integrate marketing into sales, and/or helping to scale sales). We also have an annual sales forum for our portfolio companies every year (most recent workshop here and case study on it here).

What do yo u need to do to build your sales and marketing factory?

Buy the Book and Keep it on Your Bedside Table

I read a lot of business books. Most have one or two ideas that are useful but probably should have been summarized in a blog post. Every once in a while a book comes along that is really perfectly aligned to the needs of emerging growth technology companies. This is one of those books.

While I wish Marc provided more details about the story and all the difficulties he and his team had building the company, the book is an excellent read and every manager should read and re-read it!