Managing Growth How Salesforce.com Won a 1,500-Seat CRM Contract with Staples
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The - List
Managing Growth
How Salesforce.com Won a 1,500-Seat
CRM Contract with Staples
By Ronald Sathoff • Research conducted by Nancy Solt
Founded in 1985, Staples has grown to become the largest office supply super-
store company in the United States. The Company’s 1,662 Staples and Staples
Express stores sell office products, furniture, and computers, as well as printing
and photocopying services. Although Staples operates primarily in the United
States and Canada, the Company has stores in Belgium, Germany, Portugal, the
Netherlands, and the U.K. Staples operates three business segments: North
American Retail, North American Delivery, and European Operations.
The - List: STAPLES, INC. February 2005
Respondent’s Information Company Staples, Inc.
Name: James Dorman Headquarters 500 Staples Drive
Title: Vice President of Marketing and Sales Framingham, MA 01702
Phone 508-253-5000
For this profile, Primary Intelligence, Inc. interviewed James Dor- Web site www.staples.com
man, Staples’ vice president of marketing and sales. Dorman was in Annual revenue $13.2 billion
charge of the selection and evaluation process, including determining Ownership Public
the specific requirements and specifications of the project, evaluating Stock symbol SPLS (NASDAQ)
the solutions, and selecting the winning vendor. Primary industry Office products retail
Year founded 1985
Employees 60,633
Opportunity Profile Leadership Ronald L. Sargent—President, CEO, and Director
According to Dorman, Staples’ decision to implement a new CRM
Vendor selected Salesforce.com, Inc.
solution was based on feedback that the Company received at an
annual organizational meeting:
We gather our sales organization once a year for a training and net-
working session, which is basically our sales conference. We do town
meetings there, so we poll the organization about what’s going on,
operational issues, and things that can make their jobs and lives easier
so they can spend more time with our customers and prospects. Our
[CRM] application was the hot topic of the day. We discussed perfor-
mance, speed, technical support, and functionality.
Since the CRM application was such a significant topic in the minds
of the sales force, Staples decided to investigate to see if migrating to
a new solution would lead to greater effectiveness, faster user adop-
tion, and greater satisfaction with the sales personnel.
Staples initially looked at a number of solutions, including appli-
cations from Salesforce.com, Siebel Systems, and the incumbent
provider, Salesnet. After preliminary evaluations, the choice was
to either remain with Salesnet or migrate over to Salesforce.com’s
solution. In the end, Staples chose the latter, signing a three-year
contract involving 1,300 subscribers, with an additional 200 to
cover future growth, which Dolman estimated would likely be 20 to
30 percent annually.
Evaluation Analysis
Staples began its evaluation of CRM solutions in June 2004 and had
made its final decision within two months, choosing Salesforce.com in
August and signing the contract in September. According to Dorman,
the Company decided early that it would compare only one competitor
against the incumbent, so the first step was to evaluate all the potential
replacements and choose the best offering among them:
We said, “If we’re going to make the change, we’re going to hone in on
one application,” and we cut [the short] list over the summer down to
Salesforce.com last July. Then we said, ‘”Let’s measure this solution
against what we have currently,” because if you try and do too many
tests, meaning if you have three or four applications in the hopper that
you’re trying to compare, it’s very hard. Everyone’s going to like some-
thing different and that makes it difficult to do an honest evaluation.
All figures in U.S. dollars.
Page 2 • © 2005 Primary Intelligence, Inc.The - List: STAPLES, INC. February 2005
During this initial winnowing of the short list, and in the subsequent Table 1
evaluation of Salesforce.com and Salesnet, Staples performed what
Most Important Criteria
Dorman described as “speed traps,” or tests of the client speeds of the
Criteria set First Second Third
different functionalities within the solutions. Dorman also evaluated
Vendor Cost of Future direction Technology
the flexibility of the solution and the level of technical support that implementation
the Company would receive from the vendor. Solution Scalability Solution flexibility Technical
Many of these factors were reiterated when Dorman was asked to architecture
identify the specific criteria that were the most important in the deci- Sales team Integrity Product Understanding
knowledge compelling
sion process (see table 1). event and
When asked to rate the importance of different vendor char- business needs
acteristics during Staples’ evaluation, Dorman identified cost of
implementation, future direction, and technology as being the most
important. Salesnet, being the incumbent, had the highest rating
for cost of implementation (see chart 1). For future direction and
technology, however, Salesforce.com had significantly higher ratings
than Salesnet. Other than cost of implementation, price did not play
a major role in this evaluation. Dorman explained that Staples opted
for Salesforce.com even though its price was higher:
The reality of it is, Salesforce isn’t cheap, but in the implementation Chart 1
and integration expenses it is cheaper than some of the other com- Vendor Performance
petitors. We chose the more expensive solution. As an ASP model it’s
expensive—not something to capitalize. So, all of a sudden you have to
Cost of implementation
hit the bottom line pretty quickly.
For solution performance, Dorman identified scalability, solution Future direction
flexibility, and technical architecture as the most important factors
in the evaluation. For all three criteria, Dorman rated Salesforce.com
higher than Salesnet (see chart 2). Technology
0 2 4 6 8 10
Sales Representatives Salesforce.com
According to Dorman, the three most important criteria for sales Salesnet
representatives were integrity, product knowledge, and understand- 1 = Poor, 10 = Excellent
ing the customer’s compelling event and business needs. Salesforce- 5 = Neither poor nor excellent
.com received the highest ratings for all three areas, although the
gap was not as significant as in some of the criteria for the vendor
Chart 2
and solution categories (see chart 3). This indicates that the primary
Solution Performance
distinguishing factors were based on the product, rather than the
performance of the sales teams. Dorman did say, however, that
Salesforce.com had a similar selling approach to that of Staples: Scalability
Don’t tell me what the competition doesn’t have; everybody can mud-
Solution flexibility
sling. However, if you believe in your product, you know your product,
and it’s a good product, then if someone’s going to make a switch, you’ll
win 70 percent of the time. And that’s the key. We sell that way; from Technical architecture
a selling process and a selling approach, that’s how Staples sells in our
space. Salesforce’s [sales approach] was very similar. 0 2 4 6 8 10
Salesforce.com
Salesnet
Final Selection Analysis 1 = Poor, 10 = Excellent
The main determining factor in this evaluation, according to Dorman, 5 = Neither poor nor excellent
was the fact that Salesforce.com gave Staples the tools and perfor-
Page 3 • © 2005 Primary Intelligence, Inc.The - List: STAPLES, INC. February 2005
mance it needed to match the large number of sales representatives Chart 3
who would be using it. More specifically, Staples selected Salesforce- Sales Team Performance
.com for its speed, technical support, and the flexibility of its archi-
tecture. Much of the decision came from the “speed traps” and user Integrity
testing the Company performed:
We started running both applications through site usability and speed Product knowledge
across the country. We took some of our best-connected branches, from
a speed standpoint, and some of our worst branches, as well as remote
Understanding
users, and asked them to take a look at them. We also had Salesforce- business needs
.com do a “prove it” to us, where they took our sales methodology and
0 2 4 6 8 10
our sales processes, translated them into what they would look like
from a Salesforce.com perspective, and then asked the users, “How do Salesforce.com
Salesnet
you like using the tool? What do you like about this versus the current
solution?” We found that Salesforce.com was more flexible. 1 = Poor, 10 = Excellent
5 = Neither poor nor excellent
In terms of flexibility, Dorman was especially impressed with the fact
that the Salesforce.com solution allowed for variances in the sales
process. He said, “Sometimes you close deals quicker than you think
and you’re actually able to skip some steps, and [the solution] was
intuitive enough to be flexible in those steps.”
Dorman explained that the flexibility of the architecture was also
important to gaining user acceptance, because Staples could intro-
duce features and functions of the technology as needed:
You have certain degrees of technical knowledge or technical comfort in
a sales organization. Change in a sales organization is the worst thing
you can do to them, ever. They are creatures of habit: how they sell,
what they sell. You want to make it as smooth as possible. If you want
high adoption and you throw too much at them, you’re going to get
low adoption as a result of that, because people are going to be looking
for excuses to not use the tool. The big thing was being able to control
functionality rollout. With Salesforce, you buy the whole application
but you can spoon-feed your sales organization different function-
alities over time. Instead of shocking them with everything and just
overwhelming them, we’re spoon-feeding the functionality to them.
We’re making the transition to the tool and then we’ll start turning
on the things like campaign management and some of the other great
functionality it has.
Dorman was also impressed with Salesforce.com’s technical support,
especially during the implementation. He described the service as “A-
class,” saying that Salesforce.com made sure that it achieved the dates
and timelines that Staples needed to meet. Dorman also mentioned
that he liked the vendor’s “willingness to challenge the customer
versus rolling over and [doing] whatever the customer says.” Over-
all, Staples has been highly satisfied with its decision and considers
Salesforce.com to be “best of breed.”
Overview
Based on concerns voiced by sales representatives, executives at
Staples decided to reassess the Company’s CRM solution and look at
Page 4 • © 2005 Primary Intelligence, Inc.The - List: STAPLES, INC. February 2005
possible alternative solutions. Staples began by creating a short
list of competitors that included Salesforce.com and Siebel
Systems. According to Vice President of Marketing and Sales
James Dorman, Staples performed speed and functionality
tests to narrow the list down to just one alternative: Salesforce-
.com. The Company then evaluated this solution against that
of Salesnet, the incumbent provider. After sending out the
Salesforce.com solution to users and performing real-time
speed and usability tests, Staples decided to migrate its CRM
functions to Salesforce.com.
Staples based its decision on the speed, technical support,
and flexibility of the solutions. In these three areas, Salesforce-
.com proved that it could meet the Company’s needs, even
in such a large and complex implementation. Specifically,
Staples was impressed with the solution’s ability to manage a
nonlinear sales process and the fact that the architecture was
flexible enough to allow for functionality to be introduced
to the users a little at a time. The main determining factor,
however, was the fact that the Company saw Salesforce.com as
having the technology and resources to handle all 1,500 users
that would be using the system—something that Staples was
concerned Salesnet would not be capable of managing. As
Dorman explained, “[Salesnet is] a good application; we’ve just
outgrown it.”
About Primary Intelligence:
Primary Intelligence, Inc., based in Salt Lake City, Utah, is a leading provider of
predictive sales analytics, sales intelligence, and competitive intelligence solu-
tions for managing and servicing sales infrastructure to the world’s leading
companies. Through win loss analysis, Primary Intelligence provides clients with
concise, actionable intelligence that allows them to make correct decisions
about their target markets, products, and strategies. For more information
about Primary Intelligence, visit www.primary-intel.com.
12244 South Business Park Drive, Suite 115, Draper, UT 84020
Toll free: (800) 400-2174
Local: (801) 838-9600
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Web site: www.primary-intel.com
Page 5 • © 2005
All figures in Primary Intelligence, Inc.
U.S. dollars.
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