Salesforce and its Customer Success initiative

Salesforce and its Customer Success initiative
16.05.2019 Kathrin Kempf
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Salesforce was the first software company to offer Software as a Service through the cloud. Like Adobe (trailblazer of the subscription model, see blog article: „Adobe – pioneer of the Subscription Economy„), Salesforce revolutionized an entire industry. In addition, the company realized that the work was not done once the software was delivered. That’s why Salesforce created Customer Success teams that focus exclusively on customer retention after the software was bought.

Salesforce invents Software as a Service

When Salesforce was founded in 1999 by ex Oracle Manager Marc Benioff, software was still installed on premise after the purchase. Updates had to be reinstalled and troubleshooting was sluggish. Salesforce was the first company to provide its CRM and customer service software through the cloud. This made sales and customer contact much easier. The exciting thing about it, however, was that it created a direct and permanent „connection“ to the customer.

Salesforce stock

Steep rise of Salesforce’s Stock Price
Source: Stockcharts.com

This made it possible to track and analyze the use of the software. Additional updates, products and services could be offered directly to the customer. The phenomenal development of the Salesforce share price over the past 10 years shows how successful the software company has been with this approach. Today, Salesforce is the second largest SaaS vendor in the world (after Microsoft) with revenues of approximately $10 billion.

Salesforce turns After Sales into Customer Success Management

In addition to establishing the SaaS market, Salesforce quickly realized that there was a tremendous opportunity in not just leaving the customer alone with the cloud applications. The „direct line“ to the customer could also be used to increase customer satisfaction as well as cross- and upselling. That’s why the company set up new teams to serve existing customers only. At the time, there were more or less pronounced After Sales teams in every company. However, they were more responsible for responding passively to customer enquiries and managing the offline service and parts business.
Salesforce’s After Sales division became a Customer Success Center. There are units that take care of the smooth installation and error-free operation of the software. In addition, the applications are constantly being further developed and provided with additional services. This is done on the basis of the continuous evaluation of the usage data of Salesforce customers.
New After Sales

Digital products change the After Sales requirements
Source: iq! Management Consulting

 

Customer Success Management is more than Customer Service

After introducing the SaaS model, Salesforce quickly realized how lucrative intensive customer care can be. Churn rates decrease, revenue per customer is increased, customer acquisition costs are reduced. But it’s far from enough to simply „take a little more“ care of your customers.
True „Customer Success Management“ (this term was coined by Salesforce) runs throughout the entire company and affects a large number of departments. The new customer success troops must work hand-in-hand, whether they come from Marketing, Sales, IT, or Finance. Salesforce employees are encouraged to constantly ask themselves how their customers can work even better with their cloud applications.
Customer Success Management

Customer Success Management takes the place of After Sales
Source: iq! Management Consulting

 

Conclusion

Salesforce and Adobe (see blog article „Adobe – Pioneer of the Subscription Economy„) have changed the software and IT market like no other company. Due to the courageous strategic decisions of these companies, the tech industry today is characterized by subscription-based SaaS models. But the successful business models of the two IT giants can be transferred to all other industries that offer intelligent and networked products and enter the service business. The positive lessons that Salesforce has learned from the creation of the Customer Success unit should be carefully considered by companies of all colors and adapted to their needs and, above all, the needs of their customers.

 

 

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