Salesforce Segments

There is hidden meaning to the chess board metaphor we use.

Sure, chess is a universal emblem for strategy, because you cannot win the game unless you think strategically - or unless you are IBM and build a computer that simply grinds through all possible moves in order to predict all possible outcomes of every game. The hidden aspect of chess is that it is played on a board divided into conquerable places, and the goal it to dominate space by taking it one piece at a time.

In other words, segmentation.

Market segmentation is like chess in that chasing the wrong segment with the wrong piece is a catastrophe in the making. Many chess strategies work like great market segmentation strategies, by taking the space/segment next to the one you already own and have well defended.

Like SalesForce.com is doing.

SalesForce started life with the right strategy, namely attack just one issue and dominate the field. CRM (the software solution, not the corporate philosophy) was ripe for the taking because it was always somewhat detected from other centralized applications. This allowed SalesForce to worm its way into enterprises. Now that they dominate the outsourced CRM industry, the only way for them to grow is to find another segment. Since they campaign against licensed software installed behind corporate firewalls, their segment strategy has to evolve outside of traditional CRM.

The question: what is an adjacent segment?

Next to selling to a customer, supporting a customer is key to any business. Fail at either and you die and painful fiscal death. Thus SalesForce has picked customer service - which is an extended function of managing the relationship with customers (CRM) as their next conquest. Stated more simply than Marc Benioff did - because his marketing team is chasing 'cloud' buzz - SalesForce now offers knowledge bases, community support and a Twitter tie-in.

Benioff was right in guessing outsourced support systems might be the next billion dollar opportunity. More to the point, support is the fraternal twin to sales. Both are linked directly to the customer and are interrelated. It is easier for SalesForce to extend their current offering into a compatible or dependant segment than to enter a completely new market (for example, Benioff would have been bonkers to launch an ERP offering or the next MMOG). It is also a more successful strategy because people involved in the current segment have connections to people in the new segment.

A key aspect of segmentation strategy is to choose segments in which customers talk to one another. Sales people talk to support people and need feedback from support databases (log a problem ticket for a customer and your account manager had better know about it). Thus SalesForce.com's "Service Cloud" - a lousy name because it confuses the customer - is a good segment move not only for its adjacent proximity to sales and CRM, but because communications channels between SalesForce's existing customers and Service Cloud's target customers exist and are active.

Now, if we could just get Marc Benioff to show a little excitement.

Guy Smith is the chief consultant for Silicon Strategies Marketing. Guy brings a combination of technical, managerial and marketing experience to Silicon Strategies projects.

Directly and as a consultant, Guy has worked with a variety of technology-producing organizations. A partial list of these technology firms include DeviceAnywhere (mobile applications), ORBiT Group (high-availability backup software), Telamon (wireless middleware), Wink Communications (interactive television), LogMeIn (remote desktop), FundNET (SaaS), DeviceAnywhere (mobile applications), Open-Xchange (groupware), VA Software (enterprise software), Virtual Iron (server virtualization), SUSE (Linux distributions and applications), BrainWave (application prototyping) and Novell.

http://www.SiliconStrat.com

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