Salesforce.com and Contactual

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Rich Tehrani
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Salesforce.com and Contactual

 
Here is my High Priority columns from the July 2006 issue of Customer Interaction Solutions Magazine. Enjoy. I have to write my SIP Outlook in the next few hours so my blogging may be limited.

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Behold The Virtual Salesforce

I can tell you from personal experience that managing a sales force is one part art and one part science. Sales managers fulfill the simultaneous roles of parent, friend, confidante, coach and counselor. One of the trickiest issues is knowing when you have succeeded. Whoever coined the old adage, "If you can't measure it, you can't manage it" was spot on. Perhaps he or she was a sales manager.

It can be difficult enough to manage your "direct reports," or the people who work in your organization. An even more complicated issue is how to manage partners or other companies that have been tasked with selling for you.

Often, the management of these activities is accomplished via spreadsheets. Managers pore over these documents for hours at a time, looking for ways to make sense of the data and determine whether the organization will adhere to it budgetary restrictions and sales goals.

Problems such as these are the inspiration for a new service from Salesforce.com, aptly named Partnerforce, which Salesforce bills as its very own "Partner Exchange." Partnerforce connects enterprises and partners through the power of Salesforce.com's AppExchange. In layman’s terms, this product creates a virtual salesforce.

The advantage of Partnerforce, according to the company, is twofold. Partners receive access to CRM software, and the corporation can better manage what those partners are doing. Integrated dashboards are used to allow managers to see what is happening in the sales pipeline throughout the buying cycle. To keep the pipeline full, lead distribution is added into the mix, allowing leads to be distributed to the internal sales team as well as the channel partners. In this way, deals are basically "registered" and fully documented from the start, so the potential for conflict and misunderstanding is minimized from the start. The portals can be branded by each partner, if they so desire, as they are highly customizable.

Salesforce Partner Edition has many, though not all, the features of Salesforce’s flagship CRM product. In addition to the base subscription of Salesforce Enterprise or Unlimited Edition, pricing for Salesforce Partner Edition is $1,500 per partner per year for five partner employees. These are cumulative employees; it's acceptable if one partner has two employees and another has eight, for example.

I spoke with some very enthusiastic individuals at Salesforce.com in my quest to learn more about this new offering: Bruce Francis, vice president, Corporate Strategy; Elay Cohen, product manager; and Kendall Collins, vice president of product marketing. (The three kept passing the discussion back and forth during the course of my conference call, so I will them all joint credit for the information in this article).

The common idea I came away with is that all three believe that Partnerforce is essentially the next "killer app." I certainly believe it has the potential to be a killer app, but I also believe there may enough apathy in the marketplace to make this service irrelevant. Don’t get me wrong, it has all the bells and whistles it needs. It's just that partners are an incredibly tough group of people to get motivated. There is a great deal of inertia, and many people continue to find Excel the application they love to hate. It is just so tough to break a bad habit sometimes.

Doing my part as evangelist of useful technology. I will go out on a short limb and say that partners should definitely try this service, as it genuinely seems designed to make life easier and allow everyone to focus on the most important element - the customer.

Our industry loves buzzwords, so I will at this point introduce the term PRM, or partner relationship management. The term became fashionable at the time of the dotcom boom, and then abruptly went out of style (very much like the dotcoms themselves). Salesforce.com thinks they have discovered the ultimate recipe to make PRM stick this time. If raw enthusiasm is the sole criterion, then based on my conversation, Salesforce.com is in a great position to make it happen.

One part of the solution that impressed me very much is its partner incentive area, where partners request marketing dollars for a specific event. The company would use the system to submit proof of performance (as an attachment) before they receive approval and, subsequently, a check. This is a slick way to get partners used to using the service. After they try it, they might just find they like it. (Just like Mikey and his Life cereal back in the 1970s.)

Another great feature of the service is as follows: when a partner registers a deal, even if they don’t end up selling it, they can benefit by having concrete proof that they were responsible, in part, for the sale.

So where I am skeptical, Salesforce.com sees opportunity. After all, they say that 70 percent of sales are indirect. They are right - there is great potential here. The question remains: will their customers have enough carrots to dangle in front of their partners?

Opinions About An Old Rival

While I was on the phone with Bruce, Elay and Kendall, I had to take a moment and ask what they thought of the acquisition of Siebel by Oracle. After all, the rivalry between these companies is the stuff of CRM legend. Their answer was that they don’t see Siebel as much anymore. Siebel, as they say, doesn’t exist anymore. They indicated that Larry (Ellison, of course) has depressed real estate values on the peninsula (meaning that there are so few Siebel people left). They went on to say that these are “dark days for Oracle and Siebel," as Oracle is tasked with consolidating seven CRM products: a difficult challenge under any circumstances.

I mentioned the good earnings recently posted by Oracle, and Bruce, Elay and Kendall paraphrased Mark Benioff, Salesforce.com’s very quotable CEO, who said that Oracle has "assembled a Shady Pines Retirement Home of enterprise software," or an organization that benefits primarily from rich maintenance revenues.

I will be sure to keep you posted on any updates on Salesforce.com or Oracle as they arise.

[Sidebar]

From Hosted CRM To Hosted Contact Centers

Mansour Salame is the illustrious leader of a company called Contactual (formerly White Pajama or White PJ). His company went through difficult times after the technology bubble burst. While some tried to sink the company, he wrestled back control and has turned it into a success: Contactual recently announced that it has received $9 million in funding. I was intrigued and had to learn more, so I sent Mansour a series of questions via e-mail, and here are his responses:

RT: You recently received funding…congratulations. What will you be doing with the money?

MS: Thank you, Rich. We are going to leverage the investment in the following areas: product development and distribution through partnerships and direct sales
 
RT: How are sales doing?

MS: Sales are doing really well. We are seeing incredible demand, both through our partnerships and the direct sales channel. We are growing globally and will be opening an office in Japan, an announcement we made on July 11th. We are also establishing a presence in Europe - the announcement of that new office will come shortly.
 
RT: There is so much interest in hosting today, are you seeing customers more readily accepting the hosted model?
 
MS: Absolutely. In our traditional market of less than one hundred seats, we are seeing very robust demand. We also receive unsolicited inquiries for contact center deployments of hundreds of seats, whereas before we rarely saw demand for hosted contact centers of over 100 seats. We believe the market is shifting to this model.
 
RT: Who is educating customers about the benefits of hosting?
 
MS: We try to. We are always working on white papers and case studies that educate the reader on the benefits of the on-demand contact center model. Please review the white papers and case studies we have posted on our Web site (www.contactual.com) to be downloaded for free. We are currently working on several more to be released shortly.
 
Also, consultants who used to push the on-premise contact center model are now seeing the results of early adopters having great success with hosted contact centers. These consultants are advising their clients to consider a hosted alternative to traditional systems.
 
RT: What are the biggest roadblocks to increased hosting success in contact centers?
 
MS: People have the wrong perception of hosted contact centers. They remember the first-generation hosted applications and their inability to provide a feasible solution to the contact center market. These perceptions have created a number of myths that reinforce the superiority of the on-premise solutions. However, the new generation of on-demand contact center applications, such as Contactual, provides a clear advantage over the on-premise systems in terms of cost, flexibility, reliability, scalability and ease-of-use. Shortly, we will be releasing a white paper that addresses these myths in detail. You will be able to download it free of charge from our Web site.

RT: What do you think of the Telephony@Work acquisition by Oracle?
 
MS: It looks like acquisition by Oracle was the only exit for Telephony@Work. It wasn’t a sustainable company; it is unclear whether it would have survived if it weren’t acquired. Telephony@Work’s customers are worried about how they will be treated now, and they should be. We were recently approached by several of them.
 
RT: Where do you see the hosted contact center market going in five years?
 
MS: By 2011, the majority of the new contact center seats will be provided on-demand.

RT: Thank you, Mansour.


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