Salesforce’s recent earnings announcement seemed like gas on an already blazing fire. The company beat expectations by reaching over $3 billion in revenue, which was an amazing 25% year over year increase. There’s no denying it – Salesforce has become a juggernaut, and there’s no reason to believe it’s likely to slow down any time soon.
My reasons for being excited about Salesforce’s recent success have nothing to do with the company. I don’t care if banks use its product over another and I don’t benefit from its financial performance. I don’t even own Salesforce stock (good thing I don’t give investment advice). Rather, I’m pumped up by the implications and where I believe the financial industry is going as a result.
Here’s the reality: for the past 15 years, bankers have spent little time getting gritty on reinventing the customer experience with new technology, and their core vendor partners have delivered half-hearted and mediocre solutions for customer relationship management and analytics. The irrational exuberance around Salesforce is clearly overblown and sometimes misguided, but at least the entry of this disrupter has woken up bankers and information technology professionals to the investment, commitment and effort required to deliver a great customer experience in today’s world.
To help illustrate why I’m celebrating this disruption in our industry, here are four observations of how the fervor around Salesforce is catalyzing some good conversations and commitments in our industry:
Expanding the Definition and Expectations of CRM Platforms
Consolidated relationship views of a customer, submitting referrals, managing lead pipelines and executive dashboards are now bare minimum requirements. Salesforce’s slick marketing and active evangelizing have pushed bankers to finally drive forward these system capabilities and forced other vendors to begin delivering on these age-old promises.
Although banks are often handcuffed by legacy vendor technology, what CRMs can accomplish with configurable workflows, case management and rule-based automation combined with open application program interfaces is a new green field for bankers and their IT groups. Individual banks and vendors have already created loan origination, digital account opening, customer-initiated card holds through mobile, and secure two-way customer messaging on the Salesforce platform – a capability that core providers simply cannot offer. Though certainly not perfect, these early diverse developments on Salesforce are proving that the future of bank IT revolves around leveraging extensible platforms. It’s time to transform the business in front of aging and rigid core systems that evolve too slowly.
Waking Up the Competition
Believe it or not, there are vendors that offer comparable functionality to Salesforce, but they’re all scrambling to respond to the loud and proud disruptor in the market:
Microsoft has proven financial experience and solid implementation partners like Hitachi, but it must gain stronger credibility in the cloud and developer ecosystem around its Dynamics platform.
Established names like Oracle, SAP, SugarCRM and Pega need to build much more specific frameworks for the banking industry to have a chance of getting short-listed for evaluations.
Core players like FIS, Jack Henry and Fiserv had better show seamless integration of CRM across all their solutions quick or they will basically be ceding the market.
Bank specialty providers such as 360 View, Marquis and CoreTrac will need to stand out with pre-packaged bank use cases and analytic reports that can be delivered to institutions without the development chops or pocketbook for something like Salesforce.
New players like CRMNext will need to prove they can create a better banking-focused CRM solution set with more depth and pragmatism than offered in Salesforce’s Financial Services Cloud.
In this very heated competition, there’s one thing Salesforce is doing far better than any competitor – the company shamelessly tells everyone how great it is. Sometimes this chest pumping gets annoying, but so far no one has provoked the conversation and put the industry on alert like Salesforce’s hungry sales teams and solutions engineers.
Making CRM Systems More Than Just Manageable – They’re Now Also Considered Cool!
Bringing an extensible platform and developer tools/ecosystem to banking has even attracted tired and near-cynical bank technologists back into the world of CRM. Importantly, the development architectures and tools of platforms like Salesforce are bringing a cool factor to bank technology that hasn’t existed in banking in about 4,000 years. Salesforce system administration and programming is a desirable job in an industry that has struggled to compete for top-tier IT resumes. Want a talent acquisition and retention strategy? Just explain to employees that they are designing and building capabilities that have never been done before and send them to #Dreamforce2018. Remember, the hashtag is very important if you want to be cool.
Putting a Spotlight on the Financial Industry
The single most important concept in business is solving a problem for someone willing to pay for it. Salesforce recognized there are solvable problems and community banking buyers in spades. Banks and credit unions between $500 million and $50 billion in assets conservatively represent over $500 million in annual CRM licensing revenue. That doesn’t include maintenance, implementation and other add-on modules such as customer portals and artificial intelligence. Why is that good news for community banks? If there’s one thing guaranteed to develop in a lucrative market that’s dominated by a premium priced player – it’s competition, and that ultimately should create better market capabilities.
Be Excited, Get Prepared
The hope of actually improving the customer experience with technology is back on the table with a new round of CRM competition. The only people who shouldn’t be excited about this future are executives retiring in the next year and despondent core vendors. Either way, there are new tools and new opportunities and, of course, potential CRM train wrecks ahead. While there’s good reason for GonzoBankers to be excited, there’s even better reason to get prepared. Even the most revolutionary technology has been accompanied by costly challenges. Whether it was the first automobiles, early adoption of electricity or Amazon’s Alexa accidentally sending private conversations, there has always been road kill. This means bankers must practice a bit of defensive driving and not rely on vendors or the technology itself to be successful.
Although the Salesforce hoopla has excited our industry, the answer for every bank is not necessarily Salesforce. Technology alone will not deliver a better customer experience. Executives need to make sure their teams are not drunk on #Dreamforce Kool-Aid or wowed by another CRM vendor’s “demo.” Instead, leaders must force their team to be specific about what CRM needs to deliver and how the significant investments in it will be most beneficial to the organization. And if the CRM work is already in flight, then make sure there is a method to the madness of prioritizing the overwhelming possibilities of cool things that can be created from an iterative development.
The overused phrase “it’s a marathon, not a sprint” has never been more appropriate. The ultimate winners in CRM probably won’t be those that Tweet about rock bands from conferences, but rather those banks that create a discipline that connects real business process improvement with the gritty potential of new platform technologies.