I was asked my opinion on the rapid proliferation of Sales 2.0 tools by a couple of colleagues. As I thought about it, I was reminded of the “Remora.” I hesitate using the Remora as an analogy for the rapid proliferation of Sales 2.0 apps. Technically, the Remora fish (sometimes called the suckerfish) attaches itself to larger fish and the suck parasites from the larger fish. It’s great for larger fish–it helps them keep healthy. It’s great for the Remora, they grow and thrive. The plase where the analogy breaks down tragically, is thinking of customers as “parasites.” So please wash that part of the image from your mind!
It’s both exciting and concerning to see the huge and rapid proliferation of Sales 2.0 tools. As an example, Salesforce.com’s Dreamforce is coming up in a couple of months. Half of Moscone Center, and many of the workshops will be turned over to the Salesforce.com “Remora’s.” Great applications and add-ons that expand and amplify the capabilities of Salesforce.com. We see the same thing with all the major CRM and Sales 2.0 tools. Hundreds to thousands of narrow, specialized tools are being developed to complement and expand the power of the core tool they supplement. It’s hugely exciting.
Various surveys talk about the average “spend” per sales person on the software/SaaS licensing for these tools. Each time I see a survey, the annual spend increases. Not long ago, I saw the range of the spend at $4-11K per year per sales person. I anticipate in the next survey, I’ll see this go up further. It doesn’t take a rocket science to do some quick calculations—what is the per seat price for our core CRM system? If you take the full “retail” price of the most fully loaded CRM platform, you are probably in the range of $2K per year in licensing fees. So that mean, the spend on the core platform is less than the “add-ons,” and increasingly becoming a smaller share.
But while these tools offer great advantage, new capabilities, easier use and so forth, I start getting some real concerns. First, think of the challenge to the sales person, herself. Each package has a different user interface. Packages tend to overlap in functionality. We start creating real useability problems. People struggle with knowing how to use all the tools. The overlapping function creates some confusion with “which tool do I use?” Just the mental “reset” for each tool impacts productivity and creates confusion.
Layer on that, the need to integrate these diverse systems and tools, assuring they work well–and behave well–together. Making sure data flows easily and consistently between tools, coordinating releases and upgrades, the list goes on. For example, we use one of the major CRM systems. We use a number of the “add-on tools.” Recently, there was what was apparently a minor change in our core CRM tool, and all of a sudden one of the vital “add-ons” wasn’t working quite right. It was fixed in a couple of days, but for a few days we didn’t have a vital tool. Anyone with an iPhone and who has undertaken the IOS 7 upgrade has experienced a similar phenomenon. So just the coordination and system management challenges, costs, and the resultant sales productivity impacts start becoming profound.
Overlay this complex environment with the need to extend these to support mobile environments, and it becomes ever more complex and expensive.
What will happen?
Right now, we are caught up in the excitement and proliferation of hundreds of new tools. We are finding great advantage in leveraging them–a tool that helps here, another there, and so on. One might say “Shame on the core vendors for not providing these functions in their programs.” To some degree that is fair, but to a large degree, it isn’t–they can’t possibly respond to the diversity of needs or the speed at which alternatives can be brought to market. So the add-on market is interesting for them to watch and see “what sticks.”
Pretty soon, executives will start seeing the tremendous overhead all these add on’s have (yes in addition to helping they add financial, operational, learning, and risk overheads). They’ll want to get control and simplify–as the should.
The core vendors will see (already have seen if you watch the acquisitions) all the money they are not getting, and start acquiring and integrating some offerings into their core platforms.
A huge number will fall by the wayside—hopefully not the one’s you are using.
There will be massive and ongoing consolidation–again, hopefully the one’s you are using survive–or you have to change things out. The core vendors will never be able to provide all that’s needed, so there will be an add-on market, though I suspect a little less robust as corporate executives become more thoughtful about what is added and what is not.
What do you think will happen?
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