Crunch Network

The Martial Arts Of Customer Relationship Management

Next Story

AffinityLive Picks Up $2 Million To Save Project-Based Workers From Time Sheets

After spending six years with startups in the Salesforce.com ecosystem, I’ve spent the last six months as an EIR at Foundation Capital. One of the things I hear repeatedly from entrepreneurs as they illustrate their startup’s potential is their plan to “disrupt Salesforce.”

Of course, Salesforce is still the one doing the bulk of the disrupting in the enterprise software industry (Exhibit A: their recent $55 billion buyout offer from Microsoft, and recent inclusion in the Fortune 500). And most startups will publicly talk about how they complement Salesforce, not compete with them. But Salesforce’s rapid expansion certainly leaves entrepreneurs thinking about its potential vulnerabilities. Direct attack is fruitless, so each startup attempts to apply leverage from a unique angle. Most of these attacks will fail, yet each provides new insight into opportunities in the CRM ecosystem.

Allow me to be your sensei as we walk through four different types of attacks I see attempted on Salesforce: a blow to the heart, a blow to the head, a sweep of the feet and an attack from the flank.

Blow to the Heart

png;base64f36177462fb88e4c

Some startups go for the heart of Salesforce’s user base, targeting individual salespeople and how they prefer to work. Salesforce is vulnerable to this attack because they primarily deliver value to sales management and operations. Startups typically avoid these decision makers at first, instead driving adoption from the bottom of the sales organization up.

Startups have tried to win the heart of salespeople by improving how they deliver content  (e.g., Clearslide), hold customer meetings (e.g., Clari and Selligy pre-pivot, Refresh pre-acquisition and Roobiq and SalesMesh),  send email on the desktop (e.g., Tout, Yesware) or via mobile (e.g., Cirrus, Smarter.me, Immediately and the recently acquired Stitch), or manage relationships on the desktop (e.g., Streak, Contactually) or on mobile (e.g., Tact, Heighten).

Blow To The Head

png;base64bb09319103c02e67

Some startups aim for the head, attempting to reduce Salesforce to a dumb, low-value database of historical customer data. Salesforce is aware of this vulnerability, and has tried to counter it by acquiring companies like Jigsaw for data, Edgespring for analytics and, most recently, RelateIQ for relationship intelligence.

But the attacks continue, coming from startups harnessing predictive analytics and big data. Predictive analytics startups apply algorithms and business rules to a company’s CRM data to more intelligently guide the activities of customer-facing employees (e.g., established players like Lattice Engines, and smaller startups like Infer, Fliptop, Leadspace, Mintigo, 6sense, C9, SalesPredict, CustomerMatrix and post-pivot Clari). Big data startups assemble their own unique sources of data on prospects (e.g., large companies like LinkedIn and D&B, established challengers like InsideView and Avention and new startups like Accompani and Spiderbook).

Foot Sweep

png;base646e9dd0e96658f0c7

The third type of attack is to grow from an underserved subsegment of the CRM industry, starting with a specific industry or market segment where Salesforce is weak. Startups here have targeted underserved segments ranging from B2C (e.g., Beanstalk, KitCRM), a specific industry (e.g., first Veeva, now MindBody), small business (e.g., Nimble, Insightly, Pipedrive, Base and Nutshell), and inside sales (e.g., InsideSales.com, SalesLoft, RingDNA and Close.io).

Attack From The Flank

png;base64fa702352245e99da

Some entrepreneurs believe that broader changes in how companies interact with customers make the entire CRM category vulnerable to disruption from software beyond traditional CRM.

Startups have moved in on Salesforce from adjacent markets, including marketing (Hubspot and Act-On), social selling (Hearsay), customer success (Gainsight, Totango and BlueNose) and even payments, which is the closest thing many companies have to a CRM (Square). Marketing and social have already seen attacks and massive acquisitions by Salesforce — we have yet to see a response to potential disruption from payment providers or customer success startups.

Where does this overview of the martial arts of CRM leave entrepreneurs? With three lessons:

  1. Some attacks provide more leverage than others. Salesforce has proven to be more vulnerable to attacks from the flank and the limbs than to attacks directly to the heart. Pick your opening move carefully.
  2. Be careful — Benioff is a jujitsu master. Salesforce has responded to attacks aggressively, with acquisitions, new products and sometimes good old fashioned FUD. Know that you’re sparring with a master.
  3. CRM is a large and growing dojo. Despite all of this sparring, there’s room in the CRM market for multiple winners. Think about whether there’s a way to earn your lower belts before picking a fight with Salesforce.
Illustrations by Anderson91at 99designs.com
Featured Image: HerArtSheLoves/Shutterstock