Who knew software companies could have beach bodies too?
Quick:
Salesforce, the pioneer of cloud-based business software, is shifting its focus to increasing profitability. The company is taking steps to reduce costs and improve efficiency by streamlining sales teams, integrating acquired companies, and relying more on self-serve tools to bring in new customers.
Translation, layoffs, and reduced expense accounts.
The shift towards greater efficiency and profitability represents a significant departure from Salesforce's previous focus on big marketing spending and a flood-the-zone approach to interacting with customers.
The company's new strategy has triggered a surge in its shares, which have risen 41% so far this year.
Salesforce once assigned eight different teams to International Business Machines Corp. Now it has one, with more employees working in a support role.
Highlights:
- Salesforce is reducing costs and improving efficiency by streamlining sales teams, integrating acquired companies, and relying more on self-serve tools to bring in new customers.
- The company is also considering using outside companies to sell its software, particularly in emerging markets, rather than hiring more people.
- Salesforce's operating margin reached 22.5% in the fiscal year through January and is projected to jump to 27% this year, triggering a surge in its shares.
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Salesforce, the pioneer of cloud-based business software, is shifting its focus from rapid revenue growth to improving profitability. The company is taking steps to reduce costs and improve efficiency by streamlining sales teams, integrating acquired companies, and relying more on self-serve tools to bring in new customers.
Brian Millham, Salesforce’s Chief Operating Officer, said that the company is reimagining the way it does business to try new things and improve efficiency. The company has hired consulting firm Bain & Co. to help with the restructuring process and is reducing the number of sales teams per account, trimming support staff, and expanding its self-service model for new customers.
“We think we can get smarter about the way we’re putting headcount into the business,”
Salesforce is also considering using outside companies to sell its software, particularly in emerging markets, rather than hiring more people. The company is also reducing the number of managers who deal directly with customers and putting more employees in support roles.
The pivot towards greater profitability comes as Salesforce faces slowing growth and increasing pressure from investors demanding more profits. In response, the company is taking steps to reduce costs and increase efficiency, a strategy that has been adopted by other companies in the tech sector, such as Meta Platforms Inc. and Google’s Alphabet Inc.
These efforts seem to be working, with the company’s operating margin reaching 22.5% in the fiscal year through January and projected to jump to 27% this year. This is up from an average of less than 20% for the past decade and has triggered a surge in Salesforce shares, which have risen 41% so far this year.
Salesforce’s shift towards greater efficiency and profitability represents a significant departure from its historical focus on big marketing spending and a flood-the-zone approach to interacting with customers. While this may mean some changes to the company’s unique corporate culture, it ultimately positions Salesforce for long-term success in an increasingly competitive market.
Previously the company had multiple account executives assigned to specific customers. SalesForce is reducing the number of managers who deal directly with a customer and putting more employees behind the manager in support roles.
In addition to reducing costs and improving efficiency, Salesforce is also integrating the companies it has acquired more closely into its operations. Under its old way of doing things, Salesforce let acquired companies run fairly independently, leaving many of the executives at those companies in place. Now it is looking for areas where it can trim.
“We think we can get smarter about the way we’re putting headcount into the business,” said Mr. Millham.
The company’s new strategy has triggered a surge in its shares, which have risen 41% so far this year. This demonstrates that investors are responding positively to Salesforce's efforts to improve profitability and streamline its operations.
Salesforce's shift towards greater efficiency and profitability represents a significant departure from its previous focus on big marketing spending and a flood-the-zone approach to interacting with customers.
While this may mean some changes to the company's unique corporate culture, it ultimately positions Salesforce for long-term success.
Inspiration and research, WSJ, here.
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Tweet: Salesforce is changing its sales team to increase profitability by doing more with less. Learn about their strategies for improving efficiency and reducing costs in our latest blog post. #Salesforce #efficiency #profitability
Intro paragraph for LinkedIn post: In today's competitive market, companies are constantly seeking ways to improve their profitability and efficiency. Salesforce, the pioneer of cloud-based business software, is no exception. In this blog post, we'll explore how Salesforce is changing its sales team to increase profitability by doing more with less.
Keyword list: Salesforce, sales team, profitability, efficiency, cost reduction, cloud-based software, streamlining, self-service, restructuring, Bain & Co.
Search question: How is Salesforce changing its sales team to increase profitability?
Suggested image prompt: An image of a businessman working on a computer with a Salesforce dashboard visible on the screen, showing metrics related to efficiency and profitability.
The song that matches the theme: "Money" by Pink Floyd, a classic song about the pursuit of wealth and the cost of success.
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