The Digital Age: Reading in Reverse

How to make a profit?

For most companies, it’s simple: Find a niche, create (or bulk purchase) a product, market to paying customers, and count what’s left over after you pay salaries and rent. 

Then there are the new-wave internet companies; The Twitters, Facebooks, and Googles of the world.  They provide a valuable service free of charge to attract customers (aka ‘eyeballs’), paying for it with ads.

Then there’s Salesforce.com. We’re an unusual position, as companies go, neither supplier nor middleman nor ad-driven startup. We’re the organizer and platform, the Go To and How To.  Sure, we create a product, we market, we sell it to customers - but that product’s no good without their product making it out to their consumers. Our success is totally dependent on our customers’ success.

Our profit lies in our customers staying loyal to us
(subscription-based software lives and dies on customer loyalty)

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It’s a bright new world. Companies used to go hunting for customers.  Shiny billboards, full-page newspaper ads, the erotic impact of fast-paced TV commercials.  If you’ve watched Mad Men, you’re way ahead of me here.

It’s different in the digital age, easy to compare prices and features and vendors. I can (almost) always get a book for less on Amazon, and I’ll know if the phone is cheaper (or has more features) across the street, or in China.  Knowledge is power - and, in this case, Knowledge is spending power.

Suddenly, we’re reading in reverse; 20 years ago, a company like Salesforce would’ve been helping companies find the customer. Today, we’re all about customers finding the company, getting what they want.  Salesforce finds itself -like it or not- invested in creating second-level loyalty; If our customers’ customers are loyal to them, our customers will stick with us.

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This is why - in my estimation - Salesforce pushes so hard to be in the top right-hand corner of the Gartner quadrant…*

… and it’s why Salesforce has invested so heavily in the Service Cloud (Salesforce to help you manage customers on Twitter, on Facebook, publish internal articles to the web, get Ideas from customers…).

We haven’t created a Service Cloud because it integrates so nicely into the platform (even though it does), and it’s not because we think it’s cool and hip to be part of the 21st century.  We can all do that on our own time.

It’s because if we lead our customers into the cloud and make it easy for them to connect with the outside world, we help them create a following and a good reputation.

We become their mechanism for creating loyalty, a crucial component of digital age success.

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The really interesting question, of course, is whether or not there’s really, truly a long-term profit in infinitely fast response times, in customer relationships, in social networking presence.  As US airlines are learning the hard way; your customers are completely, abjectly loyal - until the moment your competitor offers something comparable for $10 less.

Everyone follows the money.  But the market, our customers’ customers - it’s all in service cloud, all on-demand. Salesforce made a bet on on-demand software, because our fast-paced leader customers were all getting online, wanting to go mobile and global.  Because their customers were demanding more accountability, more accessibility, more relationship. Because profit does follow customer satisfaction.

Today Salesforce is betting on the service cloud.  Today, we’re reading in reverse, making our customers available to their clients.  And it’s all because you, the reader, insist on using that Twitter account.

Like this new world? Keep asking your questions online.