At Your Service, But Not Yet?

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The name “Salesforce.com” never evoked a connection to customer service—and virtually none to contact centers—but here’s the Marc Benioff remedy: Make your largest-ever acquisition, land a major partnership, glom onto the most buzzworthy technology of the
moment—and proclaim customer service your “next billion-dollar opportunity.”
The result? In April 2009, Gartner slots Salesforce.com in its Magic Quadrant for CRM Customer Contact Centers. CRM magazine— wait, that’s us—names Salesforce.com a Rising Star in its April 2009 CRM Service Awards. And a May 2009 Frost and Sullivan report credits Salesforce.com with 55 percent of the revenue from North American software-as-a-service deployments of customer service and support applications.
That’s a serious reversal. “Only in the past two years has Salesforce.com effectively competed in terms of the contact center,” says Rebecca Wettemann, vice president at Nucleus Research. “The company had a solution before then, but didn’t start to see real traction…until recently.” (Benioff, Salesforce.com’s cofounder, chairman, and chief executive officer, admits as much in our exclusive interview “The Cloud Pleaser.”)
Wettemann says a decade in CRM and sales force automation (SFA) taught Salesforce.com that expansion required more investment and a dose of its marketing prowess. “Once [Salesforce.com] reached a penetration point,” she says, “it [knew] to look for other ways to sell licenses.” (See this month’s Customer Centricity for another view of the company’s customer service prospects.)
Both Wettemann and Sheryl Kingstone, director of enterprise research at Yankee Group, point to the August 2008 acquisition of knowledge-base provider InStranet as a major turning point—not just for customer service, but for Salesforce.com overall. The prior knowledge base, from the company’s Supportforce solution, had long earned critical marks from users and analysts alike.
InStranet founder Alex Dayon, now Salesforce.com’s senior vice president of customer service and support applications, says his new employers realized three years ago—long before the InStranet deal—that true CRM leadership hinged on this. “Even [for] SFA, a customer service solution is something the market needs,” he adds. “Everything the customer does is woven together.”
Salesforce.com’s Service Cloud 2 (announced in September as an update of January’s Service Cloud) will eventually deliver enhancements, such as Salesforce Knowledge (which Dayon calls a “knowledge application completely integrated into the CRM product”) and deeper connections to social media such as Twitter.
Kingstone applauds the use of social media, but says what’s missing is a unified agent desktop focused on the contact center. “You need…components around telephony, interaction channels, and cross-channel conversations,” she says, adding that larger enterprises will expect improvement in skills-based routing.
Knowledge management, Kingstone says, is just as critical to customer service as customer service is to CRM. She praises the InStranet deal, but is withholding final judgment until the general availability in November of the resulting Salesforce Knowledge module.“[The company] needs to work that functionality into the on-demand application. Knowledge bases are…essential table stakes in customer service,” she says. “In the past…Salesforce.com fixed it [with] partnership opportunities—a viable option, but it adds to complexity and cost. You really just want to worry about one vendor.”
“The knowledge base has to be connected to a company’s internal groups, but also product experts,” Dayon says. “We realized that having a good knowledge-base engine inside our platform was very important to go to the next level.” He says that work continues on the user interface, but his summertime hints about telephony integration were borne out in October, with the unveiling of the Customer Interaction Cloud (CIC) in partnership with Cisco Systems. (General availability of the CICis set for early 2010.)
Dayon acknowledges Salesforce.com won’t see the extra $125 per month generated by an existing Salesforce CRM user’s addition of CIC—that will go to Cisco’s coffers. But Kingstone says the arrangement will gain Salesforce CRM a spot on shortlists previously out of reach.
Still, Dayon admits, a Salesforce.com contact center console can be juggling six back-end systems. “Even though there’s a new world of interaction in the cloud,” he adds, “there will still be complex calls that will go to the call center…. You’ll always need call centers.”
And yet Wettemann notes the sense of concern over Salesforce.com’s viability. “The biggest challenge is the perception that Salesforce.com doesn’t have a lot of deep functionality for customer service,” she says. “That’s certainly something it still has to work on.”

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