MV #014: Ain’t no sunshine when Bret is gone. What Salesforce earnings mean for SaaS sales.
The SaaS sales environment is shifting. Value selling is more important than ever. What can we learn from Salesforce?
Read time: 9 min
👋 Hi there, happy Sunday!
Sorry to my readers for missing last week’s More Value edition. Life can get in the way as many of you know. I’ll rethink my posting schedule post-Christmas to maintain quality and keep consistency.
Now, for the interesting part.
It’s been another wild week in software sales. I always look to Salesforce CRM 0.00%↑to see what’s ahead for the market. Here’s my breakdown and other interesting news for presales leaders, startup builders and aspiring leaders in B2B tech.
🌧 Ain’t no sunshine when Bret is gone.
Salesforce is going through a major reshuffle with Co-CEO Bret Taylor leaving. I took some time to listen to the call and share my perspective. You can check out my LinkedIn post here.
Where is Salesforce today?
Salesforce is one of the largest enterprise software companies. Since its launch 1999, it'll soon hit $30bn ARR!
Thousands of startups are built around or rely on Salesforce. The business is huge. Across industries, geos and lines of business.
Its performance is a strong signal to everyone in B2B software sales. What did I learn from listening to the Salesforce management during their Q3 earnings call?
Top Points
Everyone is shifting their focus to finding efficiencies
Time to value is critical, you must realise benefits fast
The measured buying behaviour is here to stay
Customer focus is absolutely critical now
Projects must drive revenue AND reduce cost
Buyers are consolidating vendors and tech
Internally, focus on efficiency and saving costs
Industry clouds are winning, buyers want tailored solutions.
In this economy, you must sell to the CFO.
What does this mean for SaaS go-to-market teams?
If Salesforce feels the pain of the economy, then you will too.
From Amy Weaver, CFO:
“As Q3 progressed, we saw an even more challenging buying environment, driving intense customer scrutiny on every investment dollar to ensure the highest return possible.”
From Brian Millham, COO:
“We've made some investments in the way that we go to market, touching our customers more frequently from a success perspective and the motions that we're running.“
“We've repositioned our products and our selling teams to sell not just to the CEO but to the CFO.”
What about Bret?
I remember meeting Bret when I was at Salesforce. He’s a different type of Salesforce executive, and Marc Benioff absolutely loved him. Taylor ascended quickly through the ranks and became Co-CEO.
He joined Salesforce 6 years ago through the Quip acquisition and was instrumental in orchestrating the various acquisitions including Slack.
From Marc Benioff, Co-CEO:
"He's an incredible person.[…] I know he has created two great companies, I know he wants to go create a third great company, and you can't keep a wild tiger in a cage.”
Bret departing the Salesforce Ohana will leave a massive hole in the organisation. On LinkedIn, I already noticed an uptick in resignations at Salesforce, including the founder and Slack CEO who left.
Also, Tableau CEO Mark Nelson is departing.
👉 My take
Salesforce is in for a wild ride. This departure has ripple effects across the entire organisation at Salesforce. Plus, Marc Benioff is left alone to lead the company once again.
After two failed Co-CEO attempts, it seems a distant goal to pass the reigns on to someone else long term. Investors are rightly concerned. CRM 0.00%↑ is down almost 50% YTD, much more than its competitors' SAP 0.00%↑ and ORCL 0.00%↑ which fell 24% and 9%, respectively.
Source of quotes: Salesforce Investor Relations
Other notable quotes from the Salesforce earnings call
Marc Benioff, CEO
“Everyone was shifting their focus to finding efficiencies, reducing their costs, increasing productivity”
“buying environment became more measured”
“we're not assuming that this economy gets any better anytime soon”
“increased focus we have on expanding our operating margin”
“if there's one critical thing that every company has to do to get through this, it's to make sure they maintain their relationships with their customers.”
“you're not going to be successful if you don't stay connected with your customers.”
Bret Taylor, Co-CEO
“In this buying environment, our customers are increasingly focused on three things.
First is time to value: our customers need to quickly get the benefits of their technology investments.
Second is ensuring these digital transformation projects drive cost savings, in addition to customer satisfaction and top-line growth.
Third, we know our customers need to consolidate their platforms and vendor relationships to reduce complexity and risk and to drive efficiency […]
“customers to achieve faster time to value and lower implementation costs”
Amy Weaver, CFO
As customers focus on optimizing time to value, driving cost savings, and consolidating platforms and vendor relationships, we remain well positioned to support them through the current economic environment
As Q3 progressed, we saw an even more challenging buying environment, driving intense customer scrutiny on every investment dollar to ensure the highest return possible
Brian Milam, COO
“I've asked my team recently to spend more time in the office”
"Certainly, the buyer environment has changed out there in the market. It's become more measured.”
“One of the strengths that we did have, though, I will say, is our industry clouds.”
“CEOs make quick action, and that's a quick place to sort of pull back, on marketing.”
“we saw less expansion on the Sales Cloud users“
We've made some investments in the way that we go to market, touching our customers more frequently from a success perspective and the motions that we're running.
We've repositioned our products and our selling teams to sell not just to the CEO but to the CFO, actually across the entire C-suite
What will you see in your go-to-market org?
Longer sales cycles, more slippage, shorter terms, discounting, competitive consolidation pressures, additional ROI work, scrutiny on implementation cost, faster time to value, finance stakeholders involved…and more.
Now is the time to adapt your GTM to win in this new economy and set yourself up for success in the future.
What questions should you ask?
- Ask: are we selling on efficiency and productivity or only growth?
- Ask: are we proving value in all sales cycles (renewal & new logo)?
- Ask: are we at risk of falling prey to consolidation projects?
- Ask: are we implementing fast to deliver value quickly?
- Ask: are we pricing our solution attractively to execute fast?
- Ask: are we improving internally to act fast and efficiently?
- Ask: are we prepared to fight competition in every deal?
✅ Sales tips and lessons for SaaS pros
🗞️ Found on LinkedIn
Investors seek to profit from groundbreaking ‘generative AI’ start-ups via FT
"VC investment in generative AI has increased 425% since 2020 to $2.1bn this year". via Michael Jackson on LinkedIn
AI startups started by DeepMind and OpenAI alumni via Economist
Europe slows on unicorn production - possibly for the better via FT
83% of public tech companies project declining revenue growth via Meritech.
🙏 That’s it. Have a great Sunday!
🤓 Don’t know me? Here’s the about section.
My name is Semir Jahic.
More Value is my newsletter with lessons, stories, observations and analyses from my experience building a VC-backed B2B software startup and leading a high-performing sales engineering team.
More value is made for startup builders & sales engineering leaders.
But if you enjoy learning, want to work in startups and become an effective go-to-market leader, you’ll enjoy reading More Value too.