Why Small Businesses are LEAVING Salesforce

Small businesses leaving salesforceSalesforce pioneered the idea of delivering cloud-based SaaS to businesses for a monthly/annual subscription fee. They were wildly successful in disrupting the on-premise CRM software market. Salesforce allowed customers to get started within days … large multi year implementation projects with upfront licensing fees became a thing of past.

The reason for their success: They offered a solution that was relatively simple (to implement & use), affordable and convenient. Infact in 2004, Salesforce claimed that they derived a significant portion of [their] revenue from small businesses.

So, Why Are Small Businesses Falling Out of Love with Salesforce?

Sometimes, growing SaaS companies change their focus to enterprise/large customers. Small business customers are no longer a priority for Salesforce because the revenue per account is significantly less. Check Tomasz Tunguz’s The Innovator’s Dilemma For SaaS Startups

“Early on, the SMB customers finance a startup’s growth and enable the startup to build a broader product over time that eventually becomes more attractive to enterprises. At some point, the startup pursues the enterprise market to continue to achieve high growth rates with decreased customer churn.”

Here is data we found from the annual reports and wikinvest:

Year Number of Customers Revenue (Million $) Average Selling Price Per Customer ($)
2005 13900 176 12662
2006 20500 309 15073
2007 29800 497 16678
2008 41000 748 18244
2009 55400 1008 18195
2010 72000 1310 18194
2011 92000 1660 18043
2012 100000 2270 22700
2015 150000 5370 35800

*Salesforce didn’t reveal the number of customers in 2013 and 2014.

Here is a graph representation of this data:

Salesforce Average Sales Price

So what exactly changed between 2011 and 2015? As per Mintigo research –

74% of companies who use Salesforce.com have annual revenue between $1M and $50M.

Mintigo Research

Salesforce is focused on closing larger deals instead of large number of deals. Post-IPO, in order to sustain growth they have chosen go after large enterprise customers.

It is impossible to build a product (or deliver a service) that is great for customers of all sizes. You Can’t Be Everything To Everyone.

Here are some reasons why Salesforce can neither deliver a great experience nor the desired outcome to small and medium businesses:

1. Complexity

As a product grows, the number of features increase and workflows become more complex. Requirements of a large enterprise is very different than that of a small business. Abundance of features and the degree of customization simply become overwhelming for a small business user. It is not feasible (or desirable) for a small business to hire external consultants for setting up the CRM system and making subsequent changes in the future.

2. UI/UX

Salesforce was the first to “cloud” solution, but with time they have not been able to keep up with modern UI standards, intuitive and the overall user experience have become out-dated. For example: when you log in to Salesforce, you’re greeted with the following screen:

Salesforce Home

Full of white space (unused screen) and you need to scroll down to the bottom to find out your CRM tasks.

Modern SaaS solutions have delightful & intuitive UX. For example check TeamWave. This is what you see when you login to CRM.

TeamWave cRM

Just some of the CRM-related things you can do easily:

  • Check progress of each deal/opportunity in a nice visual sales pipeline
  • Add and move deals from one stage to another
  • Mark them as won/lost
  • Schedule deal activities
  • Select different sales pipelines
  • Figure out cumulative deal worth in each stage of the pipeline
  • Find out the rotten deals (no activity for specific number of days)
  • Toggle between list view and time line view of deals
  • Filter deals via tags, deal ownership and deal state (open, won, lost, rotten)
  • Quickly connect with support via in-app messenger

3. Pricing

with Salesforce, a small business might choose the lowest pricing to start off, but as you dig deep into the software, you’ll realize that your CRM strategy has fallen prey to restrictive pricing. It means, at that pricing you can’t use some of the important features (example: API access) to integrate CRM with your company’s workflow. Removal of critical features from the base plan forces companies to move to higher plan and they end up playing 2x or 3x.

4. Friction in Adoption

There is a significant learning curve associated with Salesforce and SMEs need to spend  time & money to get things rolling. Software Complexity is the biggest inhibitor of adoption in a small business, most sales people don’t enjoy using software that overwhelms them. Time & money are important resources for companies of all sizes … for SMEs they are CRITICAL.

5. Support

It’s very difficult for a company of the size of Salesforce (with more than 3M users) to provide timely & personalised solution to all the customer issues. That’s how prioritization comes into play. Because enterprise/large customers pay more, they get more attention and enjoy the privileges associated with a key account.

6. Reporting

The reports generated via Salesforce are highly customizable. The problem is, this makes reporting a time consuming and cumbersome process. Small businesses have to spend lot of their time or hire expensive consultants to implement custom reporting. Example: For something as simple as a chart for “closed deals by sales reps”, you need to go through several steps of choosing the reporting folder, specific report, customization and chart selection. Small businesses need a nimble and out-of-the-box reporting solution that’s capable of providing deep insights.

What are the best “Salesforce alternatives” for small & medium sized companies?

There are 10+ modern CRM solutions that are built for small businesses that deliver great value. Some of them include: Close.io, Zoho CRM, Hubspot CRM, Pipedrive & TeamWave

Make sure you try most of them before choosing a solution that can help your business succeed!

 

2 Comments

  1. Great, thank you for the article. many of us small business have already learned (the hard way), that “if the shoe don’t fit, don’t walk in it…” Inbound marketing apps like Salesforce and others are simply missing the point of “small business with limited resources” unable to handle the additional burden these tools entail. In addition, many of these tools/solutions (if not all) often “stumble on the same stone”, which is not being candid about the additional or total resources a small business will need to have in order to implement their tools (including copywriters, coders, marketing specialist, etc.)
    The pushing of these tools as the feasible and reachable panacea small business are looking for is in effect is a disservice to small business and, I would venture to say, borders on the limit of truth in advertising, for wich some of these companies can be found guilty. Finally, I know of agencies that not only are trapped in paying yearly subscriptions for something they can’t use but are also paying a high price when they realize they are been forced to become publishing house and content developers, when in fact that is not in their normal line of business – and are not set up for it. So overall many small businesses, thinking these would be great tools to help them in their marketing effort, actually fall into this quagmire of yearly expensive subscriptions, unattainable technology and misdirected business effort. I would recommend that unless you have at least three additional people in your agency right now, doing nothing, don’t go for any of these tools, and save yourself some money trouble.

    Liked by 1 person

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