The announcement earlier in the week that Salesforce.com is offering a slimmed down version of its main product for $9 a month was bound to put the fox in the start up hen house. According to TechCrunchIT:
For $9 per user per month, Contact Manager Edition will store and manage all contacts and accounts in the cloud. The product will integrate with any email system, including Microsoft Outlook, Gmail, Yahoo. The system will track all emails, keeping a record of customer interactions and will run pre-configured and customized reports on contacts and accounts. Of course, this tracking system can be customized to track data that is most important to an user’s needs.
Well yes, except that’s for a 1-2 user system.
I am a huge fan of Tactile and its CEO Jake Stride (see the short video above.) I was one of Tactile’s early adopters and have watched its steady progress over the last year/18 months. Such a shot across the bows of the nascent CRM startup world was bound to demand a reaction. Here’s what Jake says:
First of all the $9 pricing is for a cut down version, and only for 1-2 users. Once users start looking above that then we’re back to the old scenario (hence why I’m not worried).
However, I’m betting users don’t think like that.
We’ll either have to start ‘objection handling’ the questions that go along the lines of “ah, but Salesforce have a $9/user/month edition” or help people migrate away once they grow and don’t want the ‘real’ pricing.
Last month I listened to John Hagel talk about innovation in China and India. One of the issues he discussed was the need to move smarter and faster than the competition to avoid the crippling effects of imitation. Salesforce.com is effectively imitating the smaller providers but having to do so on terms that don’t mean it self immolates its business model. It’s a sprat to catch a mackerel. The solution for companies like Tactile is to keep on innovating, knowing they can operate profitably at a modest cost base.
Don’t misunderstand what I’m saying. Salesforce.com is the elephant in the room for any new CRM provider. It can always outspend the small providers on awareness and marketing. It has successfully attracted CODA into developing financial applications against its platform. But that doesn’t necessarily mean it wins everywhere, despite the fact sales people like what it delivers. My video of salesperson John Peavoy discussing the benefits of salesforce.com remains one of my most popular recordings.
Jake is taking a pragmatic position but what will really matter is the response of users. Let’s hope they are able to make sensible comparisons.