Culture and customer loyalty: A Salesforce.com insider shares secrets to software success
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Salesforce.com was co-founded by Marc Benioff in 1999. At that time, multi-tenant software as a service was a relatively new concept in business. Salesforce eventually adopted the slogan "no software," to draw the distinction between their new SaaS method of delivering software and established, on-premise software vendors.
The SaaS approach to software distribution, coupled with a subscription business model, created a new paradigm for the relationship between an enterprise software company and its customers. Historically, on-premise enterprise software contracts required buyers to make large, upfront investments. The software vendors' incentive to close these large deals sometimes resulted in failed projects and unhappy customers. The problem was so severe that I originally called this ZDNet blog "IT Project Failures," back when I started writing in 2006.
The SaaS software subscription model pioneered by Benioff and Salesforce shifted the buying model from large, upfront payments to smaller, but ongoing, subscription fees. Because customers could cancel at any time (even, if it was not easy to move your data and processes to a new system), Salesforce had to prioritize customer success as a core company value. Creating a positive, inclusive culture was an existential decision for Salesforce because happy customers retained their subscriptions. High customer retention continues to fuel the company's growth.
By aligning the interests of buyers with Salesforce's revenue goals, the subscription model drove a corporate culture that embraced customers by making them happy. Given Salesforce's current revenue run rate of almost $20 billion [PDF], the company's strategy has obviously worked.
To learn about the role of culture and customer success in software, and to explore the history of Salesforce, I spoke with John Taschek, the company's Senior Vice President of Market Strategy. The discussion took place at Dreamforce 2019, Salesforce's annual conference, which had over 135,000 on-site attendees in San Francisco.
Watch the full video of our conversation embedded above and read the edited transcript:
When did you join Salesforce?
A little over 16 years now, in 2003. There were 300 people at the company when I joined.
What was the vision when Salesforce was a small company?
Marc [Benioff] used to say, "Why can't enterprise technology be as easy to use as Amazon.com. That was the vision and it's still true today. At that time, software was very complex. It took teams of people and months to install before the first person could use it. Amazon was very easy. You signed up and you bought a book. That's how easy it was. And they handled everything else, including the e-commerce part. Everything. Enterprise offer wasn't like that.
How does internal culture affect customer relationships at Salesforce?
The focus of always was on the customer, it wasn't on sales. Since we were a subscription business, we had to work all the time to get renewed. In the early days, somebody could just turn off Salesforce right away and go to something else (even though it wasn't practical to do that). So, the culture internally made us empathetic to the customers, the consumers.
We created programs for people who were heroes. At the first Dreamforce in 2003, you saw posters of people, people who actually did things and not just logos.
It really was an issue of trust. Definitely, trust was the key.
We sold to lines of business because that's who bought and it was also easy. Small businesses could buy us with a credit card, and we made it very easy. We took away that friction point. They could also set it up themselves, they could become administrators themselves, they could do a lot of things themselves.
At some point, we were successful in those small businesses, medium-sized businesses, and lines of business within large companies. And it spread. In some of our first customers, like Cisco or ADP, it spread throughout the company.
Eventually, you became a major enterprise software company.
Definitely. The CEO's became involved. The CMOs became involved after we got seriously into the marketing cloud business with the acquisition of Exact Target. Everybody's kind of involved now. It's a very C-level type of relationship now, especially with the larger companies, multinational companies.
And we still sell to small businesses too. We still have Salesforce Essentials. That's huge. And still, a third of our business is small business. So, we don't want to lose anything. But we do gain access to that C-level, helping people and companies transform.
Have the core values of Salesforce changed since the beginning?
No. Values are values. They stay the same. Our methods change and our goals change. Our measurements change, our obstacles change.
But we believe that our values are going to make us run for the next 21 years and beyond.