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Salesforce marketing and pricing strategies

May 22, 2021May 22, 2021By Homam Alghorani
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Salesforce marketing and pricing strategies

Company background

Salesforce was founded in 1999 in a small apartment in Telegraph Hill in San Francisco by Marc Benioff who left Oracle with Parker Harris, Dave Moellenhoff, and Frank Dominguez. Today Salesforce is the number 1 CRM (Customer Relationship Management) company, it is the company that brings companies and customers together in today’s digital economy, it has done major advancements in the adoption of what’s now commonly known as “cloud software” than any other company.

When Salesforce launched its cloud product it was very difficult to convince businesses that a third party will be holding their valuable contact data, it was uneasy for Salesforce because they did not only need to convince customers of using a browser as CRM by a web interface but also the needed to convince them that theory data were secure from losses and intrusion (Rounseville, 2020).

In 2018 Salesforce’s worldwide market share was 19.5%, over double its nearest rival, SAP, at 8.3% share (Columbus, 2019).

Salesforce’s core target audience was salespeople, they understand that sales is a revenue machine for any company and they are willing to spend on that department if it helps them run more efficiently and generate more profits (Shah, n.d.).

Benefits of the services to customers and the marketing strategy

Salesforce’s value proposition was simple they just want to get salespeople behind an easy and better CRM. The early product of Salesforce was very simple to a fault but that was exactly what customers were looking for. The competitor’s products like Siebel and SAP were complicated and buggy, while their one was less intimidating, those early users of salespeople were a very critical part of Salesforce marketing strategy as sales were revenue centers and companies are willing to invest in new tech that is simple for anyone to use and will help them achieve their revenue goals efficiently, that also allowed the company to demonstrate how their product help customers make more money.

Another thing that should be given to Salesforce is that they invented the free trial model for selling software because it was a cloud service or Software as a Service (SaaS) anyone can sign up, it requires no setup or technical knowledge, that helped them get viral distribution, and users can scale up very easily with a straight forward pricing plan by seat or functions (Shah, n.d.).

Salesforce realized they are going to have vicious competition so they moved to a new model which is Platform as a service (PaaS), this allowed for other developed to build apps and integrate them into the Salesforce platform and sell it on the Salesforce community marketplace, this is empowered their position even more as they get more users more features and let them collaborate with potential competitors than compete with them (Shah, n.d.).

Pricing Strategy

Salesforce uses a transparent and straight forward pricing plan, they publish their prices, you don’t need to call anyone to know how much does it cost to signup, they offer different packages to suit different sizes of companies, they also offer free trials on every plan, starting at 7 days and increasing to 30 days, they also offer a complete comparison chat for customers to download (Patel, n.d.).

Salesforce prices start from $25 per user per month and can go up to $300 per user per month depends on the plan and the scale of the business.

Salesforce now serves a lot of big companies and SME’s as well, as a sales consultant I think Salesforce can also get into startups and focus more on small businesses, for example, Amazon with their AWS service they offer a completely free tier of their cloud services to startups, they also give free credits for those companies to use, this method doesn’t cost the company much, help the startups to get off the ground and as the startup grow, scale and start generating a lot of money and get funded it can graduate to the paid plans and become paid customers.

Conclusion 

Salesforce is a pioneer in cloud computing and the SaaS model, it built the right product for salespeople and scaled in an incredible way creating an eco-system of cloud software that is used by thousands of companies, its straightforward pricing, and no setup requirement broke the barrier to entry and let it gain a lot of customers and a lot of success.

Resources

Startups Zone