Skip to content

The Looming Implosion Of Sales/Marketing Automation Apps

by David Brock on November 27th, 2015
Smartphone with scattered app icons on white

The other day, I was sitting in the airport and had a few idle minutes.  For some reason, I started playing with my IPhone.  I started moving some of the apps around to make them easier to find, based on my utilization.  Business, Social Media, Conferencing,  and Travel on the first page. Mapping, “Yelp-like,” and my fitness apps on the second.  News, Reading, Entertainment, Music apps on the third.  Camera/Photo and miscellaneous apps on the fourth.

At some point I looked at the number of apps on my phone–215.  I was blown away.  I had no idea I had so many apps, I didn’t know how I accumulated them.  I started looking at them, slowly recalling, “This app had this one neat thing.”  “That app had another….”  Each of the apps had something that was attractive for a moment, I supposed I used the app a few times, but then forgot about it.

So I decided to reduce the apps on my phone.  Arbitrarily, I deleted all the apps I hadn’t used in the last 60 days.  I’ve gotten down to about 50.     In reality, I think I can get down to 30.  But there’s that fitness app I’ve been meaning to use when I travel–I’ll keep that a few others.

I’ve done the same thing with my IPad.  It’s interesting, the one’s I’m keeping on the IPad are very different than those I keep on the IPhone.

I think we are experiencing much of the same thing in the sales and marketing automation markets.

The sales and marketing automation markets are booming.  There are literally 1000’s of new apps being introduced every year.  The market is very crowded and confused with many, though useful, very “niched” or “nuanced” applications.

There are apps that enable sales or marketing people to do one specific thing very well and perhaps pass data to a common CRM or other app.  That thing is very important, so the app becomes very important.  After a while we find our organizations have dozens of specialized apps, each helping us do one or two things very well.

But, we sit back and start to take notice, how many are we really using, is everyone using them or just a few people, how do we keep people trained, how do we support the continued integration between these apps.

A new set of terminology has started creeping into the vocabularies of sale and marketing operations execs:  The Sales Stack and the Marketing Stack.  This is the complete set of applications being inflicted on sales and marketing people.  Each one, no doubt has some value to at least one person, otherwise it wouldn’t be in our “stacks.”

It’s not unusual to see a sales stack of $15K per year per person–or larger.  That’s $15K we are paying for apps for each sales person–not including all the services and support around them.  Using Salesforce’ SalesCloud as the “mothership” base application, a fully blown out version of Salesforce, at full retail, costs roughly $3K per year. This leaves another $12K for my prospecting, research, presentation, content, learning, expense, collaboration, messaging, proposal, account planning, call planning, reporting, analysis, and 1000’s of other apps.

As I talk to sales ops/enablement leaders, they struggle with getting people to use all of these apps.  Each is optimized to something different, each has a different user interface.  There are inevitable overlaps, particularly as the vendors try to grow their solutions, so which app do we use, when several enable us to do the same thing?

The business cases for each are becoming increasingly difficult to make on a standalone basis.  Or the justifications overlap, with each app claiming credit of the improvement, but none, on it’s own is justified.  Perhaps, in isolation, we understand the business case for each, but in the reality of how the organization uses the apps, much of the real justification seems to be disappearing.

I look at my own team.  We leverage as many tools as we can.  We’ve invested in a number of apps to support our work, we also have been fortunate to be granted some “free licenses” of a number of other apps.  We use all of them for a while, but over time, the patterns keep coming back to a small number of core–go to apps.

These core apps tend to be the platform or system of record apps.  Think of these as your base CRM or Marketing Automation systems.  A way of thinking about them is, “What are the apps that all the other apps integrate to?”

These core apps and the ones that we use everyday, 365 days a year, critical to the business.

More and more execs we speak with are questioning their tool strategies, focusing on the platforms and systems of record.  Of course there are also those that are struggling to get utilization, compliance, and value from some of these core systems.

On the vendor side, we are seeing interesting things, reflecting what both they and their customers are discovering about the sales and marketing stacks.

There’s a huge amount of consolidation.  The long term winners are those that offer a platform or a system of record.

Those vendors or those that are borderline are acquiring many of the other players to consolidate their platform strength.

Likewise, those applications that will never achieve platform or system of record status are consolidating, trying to become platforms or near platforms–all while still hundreds of other niche apps come to the market.

Private conversations with the exec teams of many of these SaaS based apps, show their concerns.  They are seeing declining retention/renewal rates.  This decline is not due to customer dissatisfaction with the products, but more due to the fact that not everyone needs the app or the app isn’t used everyday.

Inevitably, there will be huge fall out in the sales and marketing app world.

It’s also an opportunity for clever people to rethink their business models.  Why do we need to base our SaaS models on seat/user based monthly subscriptions?  What if we looked at models based on utilization?

Perhaps it’s not important to have everyone in the organization paying $20/month (or whatever your subscription is), but having those few people who really need the app paying $100/month?

What if we developed business models that look at how people actually use the product or the return they get, rather than flat monthly subscriptions?

Over the next few years, 1000’s of vendors will disappear, not because their products weren’t useful products, but because their business models aren’t aligned with how and who uses the products.  More will pop up in their place, only to disappear a few years later.

We tend to think the big winners will fall into two camps, those that are core platforms/systems of record, and those niche apps that have moved beyond the classical SaaS model and have discovered new business models, more aligned with actual utilization in organizations.

What do you think?

Book CoverFor a free peek at Sales Manager Survival Guide, click the picture or link.  You’ll get the Table of Contents, Foreword, and 2 free Chapters.  Free Sample

Be Sociable, Share!
No comments yet

Leave a Reply

Note: XHTML is allowed. Your email address will never be published.

Subscribe to this comment feed via RSS