Siebel v Salesforce — Lessons from the Death of a Tech Goliath

Yesterday, Fortune.com posted an article I had been contemplating writing for several years.

It was a point of view story on the collapse of Siebel Systems and the rise of Salesforce to become the global leader in CRM. Well, at least a large portion of the CRM market.

In case you didn’t see the Fortune article, click here to read it. When you have finished, come back and the following narrative might add some color as they had to edit down the original and it lost a few points I had wanted to make.

The Power of Consistency

Last week, in preparation for a commercial launch, I asked the CEO of one of my companies the following questions:

  1. Do you and your team feel you know the 3-5 things you do that no other company can do?
  2. Do you feel your customers, prospects and industry analysts understand what these unique capabilities are and value them as “must have”?
  3. Do you believe your Corporate Sales/Investor Presentations, Corporate Demo and Corp Website feature your unique capabilities?
  4. Do you believe each and every person inside your company knows your unique capabilities and value propositions and can recite them verbatim?

These questions sound fairly simplistic but in order to answer affirmatively requires a company to have put in place strong internal communication processes.

 

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Face(book) It – Your Social Media Strategy isn’t Paying Off

According to eMarketer, last year, U.S. companies spent more than $3 billion on Facebook brand pages and social media advertisements and the return has been universally abysmal. GM went on record in May of this year in the Wall Street Journal saying that FB ads don’t pay off and that GM was ending all investment in FB advertising.

That said, The CMO completed a survey in February 2012 and found “…that marketers continue to increase spend on social media. In the next 5 years, marketers expect to spend 19.5% of their budgets on social media, almost three times more than the current level! Within a year, marketers expect to spend 10.8% of their budgets on social media.”

Unless the results change, however, marketers are going to lose interest in this “shiny new toy” and eventually drop or at least significantly reduce their investments in social media.

That would be a mistake.

The problem doesn’t lie with FB et al per se. The underlying problem, in my opinion, and what has recently been corroborated by research is that your social media strategy needs to include authentic customer engagement and not be viewed and used as yet another one-way digital advertising channel.

To help make this case, one of my portfolio investments, Get Satisfaction!, will hold an event on Thursday, July 26th to unveil recently completed research in this area.

For 2011, I Gave My Blog a CrowdSourced Facelift — Well, Sort Of…

So, you may have noticed the new look for my blog and want to know, “Why the change?”

When I originally started this blog, I did it as an experiment; I didn’t give a lot of thought about the long-term breadth of topics I wanted to cover beyond “Software as a Service” nor the blog’s overall positioning. I thought that if it garnered a few followers I would circle back and consider its “look and feel” and branding.

Minimizing the Customer Acquisition Cost (CAC) Ratio

Recently, I’ve had a few conversations with people regarding my version of the Customer Acquisition Cost (CAC) ratio. As a reminder, my version of the CAC ratio is: [($Total Sales + $Total Marketing)/$First Year Contract Value]. The objective is to make the CAC ratio less than 1 which implies a customer acquisition payback of a year or less. This is the ratio I recommend companies use to measure their sales/marketing effectiveness. I discussed this a year or so ago in this blog in a post titled The Capital Needed to Create a SaaS Company”.

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