I read about SalesForce’s Q2 2018 results last week. Revenue grew $677 million to $3.06 billion in comparison to $2.38 billion in the second quarter of 2017. Income from operations increased slightly from $84,000 to $115,000. Cash increased almost $5 billion before the payments of $6.4 billion in cash and stock for the Mulesoft acquisition. Check out the full 10-Q here.
SalesForce is without a doubt a true gorilla in the CRM/sales force automation market. I decided to explore how SalesForce continues to grow its revenues at double digit rates. They added $677 million in revenues in a single quarter. Most tech companies struggle to generate $677 million in a year, much less grow their business by that much in a quarter.
I decided to look at SalesForce’s marketing value equations and proof points. Like many firms, SalesForce has an ROI calculator on their website. The calculator yielded the following value equations:
- 37% increase in win rate (improvement in percentage of opportunities converted to sales
- 43% increase in lead rate conversion (increase number of leads converted to sales opportunities)
- 44% improvement in sales productivity (improvement in amount of time spent in productive sales activities
- 48% increase in forecast accuracy
These proof points seem reasonable, comprehensive, and relevant. To back up these value equations, SalesForce cites over 300 customer success stories in 16 different industries. It is not hard to see how SalesForce became the gorilla that they are.
A marketing value equation is the customer perceived benefits minus the price/cost of the solution. A proof points is an example that offers irrefutable evidence of the quality, importance or uniqueness of something. Proof points need to be accurate, convincing and believable.
In an excellent post, Chris Goward, used the following chart to talk about proof points:
- Points of Parity (POPs): These are the features you offer that are important to your prospects that you also share with your competitors. Most marketers spend their time here, loudly trumpeting how they can do what their competitors do too, only *better*! That’s a strategy to fail.
- Points of Difference (PODs): Here’s where you can win the game. These are the features that are important to your prospects and not available from your competitors.
- Points of Irrelevance (POIs): You may have spent a lot of effort developing great features, but if nobody wants them, you should kill them.
Your PODs are where you should focus. These are the features you can emphasize that will move your prospects to action. They are your differentiators.
I decided to dig into a few marketing automation/sales automation vendors that try to compete with SalesForce to see how they stacked up. I looked at SharpSpring, Hubspot, Marketo, Act-On, Pardot, and Infusionsoft. In the spirit of disclosure I am a former user of Vantive, SalesForce, Hubspot, and DiscoverOrg (fka Rainking).
To begin with, I looked to see if each vendor had some type of online ROI calculator. Here are some links for you to explore:
- SalesForce: https://www.salesforce.com/form/app-cloud/roi-calc.jsp
- Hubspot: https://www.hubspot.com/roi-calculator
- Act-On: https://www.act-on.com/learn/free-tools/economic-impact-calculator/
- Pardot: http://www.pardot.com/roi-calculator
- InfusionSoft: http://www.pardot.com/roi-calculator
- SharpSpring: https://sharpspring.com/alternatives/
Much to my surprise, I found that most of these calculators basically regurgitated SalesForce’s four core value equations:
- Increase number of leads. Increase in leads from email campaigns & landing pages
- Lead conversion. Increase in number of leads converted to sales opportunities
- Win Rate. Improvement in percentage of opportunities converted to sales.
- Sales Productivity. Improvement in amount of time spent on productive sales activities.
These are basically Points of Parity – each vendor has their own spin on how they may do any of things better than another solution. There are a lot of Points of Irrelevance.
The only item that I found to be a material Point of Difference was SharpSpring’s pricing. Basically most of the other solutions require an annual commitment, and SharpSpring only requires a monthly commitment. For point of reference almost all other solutions annual cost range from $26,000 to $30,000. SharpSpring and Infusionsoft annual costs range from $8,000 to $11,000.
Where Does Your Firm Stand on Key Messages, Proof Points & Value Equations
You should take a few minutes to examine where your firm is at regarding Points of Parity, Points of Difference, and Points of Irrelevance. I have often used this simple chart to document where a firm was at:
It is important to do this analysis for each of the major personas your firm deals with. Remember to do this from the customer’s point of view versus your own. Value equations are the customer perceived benefits minus the price/cost of the solution. A proof point is an example that offers irrefutable evidence of the quality, importance or uniqueness of something. Proof points need to be accurate, convincing and believable.
These items should roll off your tongue easily. Everyone in your organization should be able to do the same. If you can’t, or they can’t it might be time to update your messaging platform and re-educate your organization on it.
Trust, But Verify
In addition to documenting your current value equations and proof points, you should talk with current and former customers to get their insights as well. Customer perception is critical to effective equations and proof points. One way to accomplish this is by conducting a brief Win/Loss project. Such projects focus on having an independent third party interview current and former customers. During the interviews, you explore, from the customer’s perspective, what they perceive the value equations and proof points of your solutions to be. The results are often surprising and very insightful into the effectiveness of your current messaging platform. These projects can usually be completed in weeks and at a reasonable cost. (full disclosure – I am a board advisor to the Win/Loss Agency that specializes in these projects.)