Helen Robinson, President and Australasian managing director at Pivotal and Doug Farber, a vice president at Salesforce.com Asia-Pacific, compare notes on where the local customer relationship management (CRM) business is headed.
Robinson: CRM vendors should refine their solutions based on feedback from customers to ensure they satisfy business needs in the marketplace. What formal feedback/customer research strategies does salesforce.com have in place?
Farber: For our six-year lifespan, we've run regular roadshows and club events to encourage users to network and exchange ideas with each other, as well as with us. For the last two years, the company has run a customer forum called Dreamforce that gives users a direct line into developers and our senior management to give us their feedback on what they would like to see and what their current issues are. In each country, we have customer success managers who proactively work with their clients to look at ways to maximise investment.
Communicating the ease of customisation has been key throughout the organisation's life, and most users have found this one of the main benefits of using salesforce.com. However, our most tangible commitment has been an average of three releases of major improvements to our service per year to demonstrate we are continually taking feedback on board. This is unprecedented in our industry, where 18-24 month product release cycles are the norm.
Farber: Microsoft has been making noise in the mid-market CRM space. Do you see that as a threat?
Robinson: With a company like MS being active in the CRM space, we have in fact found more organisations are becoming aware of what CRM can offer them and are getting a first taste of CRM-like solutions from MS.
What this MS activity has done is draw people's attention to the fact that CRM is not just about products and software, but about business needs and solutions. MS's involvement has in fact stimulated the market for Pivotal and put us on more people's radar.
Robinson: How has salesforce.com adapted its solution to meet the changing business needs of mid-market Australian companies and organisations?
Farber: The same as we have the world over. We've listened to user feedback and given them the tools (such as easy customisation, customforce, multiforce, and sforce) to change our platform to suit their business as they see fit.Australian companies are not facing any challenges that other mature markets haven't experienced. Our proposition works well in any language, 'Strine, Spanish, or whatever -- it's simple to use, low risk, and easy to customise. It's not just technology that's a differentiator here, it's also service. Our Australian office is well staffed with experts who understand the local market and any emerging challenges. The Aussie market has responded incredibly well to our "give it a go" philosophy of providing free trials of the service to give proof of concept before companies need to buy.
We're not selling the same high-investment model as other software vendors. We provide an enterprise-class application for a fraction of the cost, risk, and complexity of other vendors.We benefit from customers who have had a traditional CRM package enforced on them, perhaps by an overseas head office, with little local support from the vendor or implementers, and decide to go under the radar and use salesforce.com.
Australia is more of a testimonial-based country, so if what you're doing works, by nature, everyone knows about it. And if it doesn't, everyone knows about it!
Farber: How do you differentiate yourself from the likes of Talisma, Onyx, and Epicor in the mid-market space CRM space?
Robinson: Talisma and Epicor are not competitive or present in ANZ. Onyx is struggling from a technology standpoint and regarding their ability to invest in R&D, and their financial stability is in question right now.
But to give you a couple of specific points of differentiation, our ongoing customers are happy with Pivotal's ability to scale from small office to enterprise. We have many local reference sites, extensive CRM implementation experience across Australasia, and a choice of implementation partners.
Robinson: Since the inception of CRM the market has moved on dramatically, to the point that the term CRM is confusing if not meaningless. Do you agree? How would you re-name the discipline if you could?
Farber: Customer relationship management or CRM is one of the most abused and maligned acronyms in the industry. Saying that, I'd probably stick with it because it's so well understood, but I'd probably change it to stand for Customers Really Matter to encourage vendors and users to maintain focus.
Ultimately our goal is to become the globally recognised trusted standard in managing and sharing corporate information on demand. So it's a vision of the future with CRM at its core, but one that extends far beyond CRM.
Farber: How do you act local but think global?
Robinson: We have a proven local organisation (since 1997) that truly understands the customer management needs of all businesses in Australia and New Zealand. We have extensive customer references in most markets (financial services, NFP, government, FMCG, services, technology, and manufacturing), but continue to leverage R&D, international successes, and collaborative customer management on a global scale. And on top of that we have a great internal CRM solution we use!
Robinson: With the new privacy laws in place, how does a hosted solution such as salesforce.com comply? Should a salesforce.com Australian customer be concerned that its personal data is being stored on a US-based data system given the US government's access to data under the US Patriot Act?
Farber: We've spent more on getting our security and privacy house in order than most organisations do on security generally (approximately US$150 million to date). As a hosted model, it's part and parcel of the proposition and we got this right before launching. We have a chief security officer so security is priority number one for every salesforce employee. There is no greater asset to us than the trust of our customers. Our model demands that. So the imperative to preserve and enhance that trust informs every decision we make.
Farber: What prevents Pivotal from making a sale?
Robinson: Mostly in-house, old school IT "experts" who continue to believe in their own existence and that they can develop systems themselves rather than implementing an out-of-the-box solution with the ability to configure as and when required. This type of expensive in-house IT team will identify a need and put a "sticking plaster" over the top to fix the problem rather than take a holistic approach. This not only makes running an IT department complex and costly long term, with many different internal systems and platforms, but it also creates inter-departmental silos resulting in lack of communication and holding the business back. This is a "qualify out" type of sale.
And of course there is always the all-too-often-quoted perception from the late '90s that many CRM "solutions" tried to mould their clients' business needs around their technical capabilities (or lack thereof!).
One big "competitor" is companies who don't realise that understanding how technology can truly enable their business, and who don't realise the importance of consistent relationships with their customers.
Robinson: Does salesforce.com embrace or oppose the idea of investing in vertical software? Why?
Farber: The whole concept of verticals comes from the world of client-server computing. In this model, enterprise software was rigid and inflexible, and customers were discouraged from making their own changes since those changes would make them unwilling to upgrade. So verticals were a halfhearted attempt at making customers succeed. They succeed in telling a customer: "You're a drug company? You must run your business exactly like every other drug company." No customer of ours thinks like that.
We don't think people need vertical solutions because all companies are unique. Having a telco vertical template doesn't necessarily give every Telco what they need. It gives them a generic mould that they must fit their business into. Salesforce.com has created customforce, which allows companies to build their own custom version of our application, so it fits their model exactly. As such, we've built salesforce.com as a platform that gives our customers the power to be unique. So with single users, SMEs, mid-market, and enterprise customers in finance, telecommunications, retail, logistics, law, health, and entertainment using it, we provide a customisation platform that allows these companies to configure salesforce.com according to their own business requirements.
Farber: What are your thoughts on the on-demand market and what it offers to users, both for CRM and for other applications?
Robinson: To date, most on-demand providers have described a tactical use of software rather than a true business enabler. In saying that, you must plan your route map and understand your relationship landscape before you can select the vehicle to take you to your destination -- and on-demand is simply one of the available vehicles.How the software is delivered is really irrelevant, it's the relationship marketing strategy and the ability of the platform to deliver the strategic requirements that should be most important.
Robinson: How scalable is a hosted solution like yours? Do you have a saturation limit for growing your customer base?
Farber: It's as scalable as an organisation needs it to be -- ask White Cloud Trading, which is behind the retail Tree of Life stores; or Australian-listed SMS Management Technology; or multinationals like Vodafone, Cisco, and Travelex. Our experience tells us that as successful as our 13,900 customers have been so far, we are just beginning to discover the possibilities -- not test the limits.
Farber: Gartner recently announced it thought salesforce.com would be among the top three CRM vendors of the year, beating the combined licence revenues of Oracle and Peoplesoft. How does Pivotal intend to maintain revenues in the face of a smaller slice of the pie on offer?
Robinson: Pivotal continues to grow from strength to strength. Neither Oracle nor Peoplesoft have appropriate CRM solutions for this market. They are costly, hard to implement, and not deemed as true CRM competitors in the mid-enterprise space. Pivotal, however, is perfect for this space (which contains the majority of Australasian businesses). We have predicted growth of some 50 percent for ANZ for 2005.
Your question is based on an assumption that the slice of the pie available to Pivotal will be smaller. In fact we're finding this not to be the case. With the realisation by so many businesses that effective management of stakeholder relationships is a pathway to greater profitability we have found more of the type of organisation we are interested in working with are coming into the market. So in fact our experience is that Pivotal's slice is growing!
Robinson: Which person (alive today) do you admire most in the world and why?
Farber: The Dalai Lama. He inspires millions with his compassion and wisdom yet maintains an amazing amount of humility and grace.
Farber: Which IT company would you most like to work for (other than Pivotal)?
Robinson: I can't imagine working for any other player in the CRM market. So I'd have to look out-side CRM if I were to work elsewhere. But if there were no opportunities within an existing organisation, I might have to create my own.
This article was first published in Technology & Business magazine.
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