💃 Salesforce Drops to the Mean 🕺

Good morning, Salesforce Nerds! Bloomberg wrote a long form article (🚨paywall alert🚨) around the state of tech sales roles, using Salesforce as their main character.

Is this really paywall-worthy news 🧐?

And who has time to read long form when you have 2024 goals to create and the holidays are around the corner?!

You’re in luck 🍀, a 5 minute summary with all the best insights surfaced for your convenience ⬇️

Agenda for today includes

• Salesforce Drops to the Mean

• Daily Principle

• All the Memes

Salesforce Drops to the Mean

• Context

• Utopia

• Ch-ch-ch-changes

• Drop to the Mean

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CONTEXT

The Bloomberg article did not report anything earth shattering or surprising.

You already knew Salesforce hired too much, then fired a bunch.

But here’s the thing-

Salesforce is at an inflection point. They are experiencing a significant slowdown in growth.

👉 They failed to maintain growth via acquisition (Tableau, Mulesoft, Slack, etc)

👉 They failed to maintain growth by increasing headcount (30,000 new hires during the pandemic)

👉 They failed to control costs - acquisitions and payroll.

Bloomberg focused on the salesperson’s perspective through the last few years. Let’s see what they had to say 😃 ⬇️

UTOPIA

The Bloomberg article began with describing the conditions of Salesforce’s best-ever sales environment, 2020 to 2022-

💰 $400k compensation for frontline salespeople.

💰 Accommodating commission structure - multitude of salespeople could claim a deal, each getting a commission.

💰 DOUBLE commissions during the pandemic.

💰 Luxury watches and cars for executives. Generous expense accounts for AEs.

During the pandemic, Salesforce added 30,000 new-hires, primarily sales and marketing roles.

But then-

CH-CH-CH-CHANGES

With that insight, an array of changes occurred-

😬 Layoffs

😬 Activist Investors

😬 Ohana 2.0

Diving deeper into Ohana 2.0 🏝, as the Bloomberg article provided some good examples-

🏝 Commission rules changes- fewer people could be commissioned on deals. More salespeople fighting for fewer commission seats.

🏝 The aforementioned layoffs. These hit customer service teams hard along with sales. This left the remaining salespeople with bigger workloads.

🏝 Increased emphasis on sales Performance Dashboards in meetings. ie Accountability 👀.

🏝 Resurgence of PIPs (performance improvement plans).

🏝 Salesforce used AI tools to manage the integrity of salespeople activities. For example - “making pointless calls or overestimating the number of leads in their pipeline. There are plenty of methods to catch cheaters. It’s one of the things the company is using AI for.” - per the Bloomberg article. 😳🤖 

🏝 Brand Perception

Ohhh, brand perception is an interesting one. Here’s why-

Bret Taylor, former Salesforce co-CEO, current OpenAI Chairman of the Board, once said “half the people who aren’t in tech don’t know what Salesforce does.”

Salesforce has put more focus on defining what they do.

👉 Data+AI+Trust+CRM will be hammered into your heads 🤕.

👉 New landing pages on that address Bret’s concern - clear definitions of What is Salesforce?

👉 A new marketing executive has been hired, who intends to put more focus on the product (“and less on Matthew McConaughey in a forest 🌲 musing about AI 🤖,” pondered Bloomberg).

DROP TO THE MEAN

No surprises here. Salesforce employee satisfaction dropped. A lot.

From having a industry-high satisfaction in 2021Q1, to becoming the lowest in 2023Q2.

As mentioned in the Q3 call, the most surveys have come back, and satisfaction is rising. But the gap between Salesforce and its peers has become negligble.

Salesforce has dropped to the mean.

But Salesforce is also still growing in revenue 📈. They’re generating their largest profit margins ever 📈. And there are no known competitors to their #1 CRM spot 📈.

It’s Salesforce’s salespeople who’ve had the biggest fall from grace 📉.

Daily Principle

and now....Your Daily Memes