Noisemakers Versus Newsmakers

Competition among CRM vendors is escalating. One of the most heated battles is between $1.6 billion market leader Siebel Systems and Salesforce.com, a privately held up-and-comer with revenue of $100 million. Salesforce.com often uses guerrilla marketing in its bid for Siebel customers' mindshare, as well as other prospects'. At the recent Siebel Users Week, for example, Salesforce.com hired people to stand across the street from the San Diego convention center holding banners that read, "Salesforce.com. Success. Not Siebel" and to hand out donuts and coffee to conference attendees. "It is tactical to target around Siebel announcements and events," says Cary Fulbright, Salesforce.com's chief strategy officer and senior vice president of new market and brand development. "It's an opportunity to tweak them a little about our model and our success with that model." Fulbright says this particular event was designed to get Siebel customers to "think about us, to raise awareness in a refreshing way." Salesforce.com's guerrilla tactics and glitzy events--for example, the company hosted a product launch during a premiere party for Terminator 3, at which the movie's star, Arnold Schwarzenegger, was the guest of honor--have gotten the company a great deal of attention. But they have also created opportunities for competitors to tweak the company about its marketing missteps. At the beginning of September Salesforce.com announced it was participating in the Himalayan Society's evening in San Francisco with the Dalai Lama. The company invited clients and prospects. But Salesforce.com was seen as overstepping boundaries when it sent out a poster of the Dalai Lama that could have been interpreted as his Holiness endorsing Salesforce.com. The company had to back out of the event, rescind its invitations, and apologize to all those involved. Competitor NetSuite seized a guerrilla marketing opportunity of its own. Zach Nelson, CEO of NetSuite, says his company's marketing approach is to take a thought-leadership position. However, Nelson admits that much of marketing is being opportunistic and hitting on what's hot and current. This was the driver that led NetSuite to send invitations to a press event that played off rival Salesforce.com's marketing strategy. The NetSuite invite noted that neither the Dalai Lama nor Arnold Schwarzenegger would be at its event, but that the event would be newsworthy nonetheless. Industry pundit Paul Greenberg says he finds it ironic that CRM is supposed to be about making customers happy, when the CRM players are at each other's throats. "It undercuts the message," Greenberg says. And the contentiousness in the space has not gone unnoticed. "It can get vicious, because these customers are hard to move," says Jef Loeb, creative director at Brainchild Creative ad agency, in San Francisco. "When you start talking with customers about databases, sale process, and their customers, you are getting into the corporate jewels. So if you are competing against notorious, hard-edged players for the sale, you might have to bring out the razor blades." Robb Eklund, vice president of marketing at Oracle, admits that "it always feels good to point the gun at competitors." "Remember that anything I say about a competitor has a bias," he adds. "I am not a source of truth about rivals, just as they are not about Oracle." Jeff Pulver, vice president of worldwide marketing at Siebel, says his company's marketing is aimed at highlighting how Siebel can benefit customers. "Ultimately customers want to be able to trust the company they are doing business with, and part of that is being able to demonstrate the value our customers get from the product." Just 1 Question CRM magazine: What keeps customers up at night, and what are vendors doing to help them sleep? Barbry McGann, vice president of product strategy, PeopleSoft CRM: "Customers are concerned as to whether they are going to deliver CRM on time and in budget. Vendors need to offer solutions that are fast to implement, to offer prepackaged configuration to reduce customization, and to deliver ROI templates that help organizations benchmark results."