Salesforce relies on “boomerangs” and lures back former executives to stimulate growth again
Salesforce.com Inc. CEO Marc Benioff, right, greets attendees after a keynote address at the company's Dreamforce conference on September 12, 2023 in San Francisco. Benioff said new product features, including those based on artificial intelligence, will be demonstrated at the company's annual conference in September.
Marlena Sloss | Bloomberg | Getty Images
Ariel Kelman was over a decade removed from Salesforce when he received a direct message on Twitter from CEO Marc Benioff in early April. Benioff wanted to know if the marketing director who held leadership positions at Amazon Web services and oracle After leaving Salesforce, he was ready to come back.
“I just thought it was good timing,” Kelman said in an interview at Salesforce’s Dreamforce conference in San Francisco last week. A few months earlier, Kelman led marketing at a startup called Fireblocks before returning to Salesforce as chief marketing officer in June.
“This is a company I had a great time with,” he said.
Miguel Milano, who led sales in key international markets for Salesforce for more than a decade, also returned in June with the title of chief revenue officer. Milano was lured back by Salesforce operations manager Brian Millham, who spent part of his vacation in Madrid and persuaded his former colleague to rejoin the startup Celonis after three years.
“It took a few swipes,” Millham said at Dreamforce.
Kelman and Milano are among at least eight former Salesforce executives who have rejoined the gang in 2023, as the company celebrates its 25th anniversary. Benioff, who saw co-CEO Bret Taylor depart this year after just a year at the helm, is turning to the old guard to help get Salesforce through a tough economy and a period of slowing growth.
Before the tech downturn that began in 2022, Salesforce enjoyed major acquisitions, spending a total of around $50 billion on MuleSoft, Tableau and Slack between 2018 and 2021.
After making these big bets to drive revenue growth and expansion into new markets, Salesforce is trying to make the most of what it has by refining its sales approach and relying more heavily on its own products.
During Dreamforce, which drew over 40,000 people to its hometown, the company hosted an event for 50 former employees who were given specific spots at the show and customized giveaways, such as: B. a, were assigned stuffed animal wears a yellow shirt with an image of a colorful boomerang. Current executives were there to greet them, a spokesman said.
On Salesforce's August 30 conference call, Benioff said it was great to welcome back his former colleagues. Millham told CNBC that it was easy to get to know her again.
“You don’t have to be there every day to make sure they get the job done,” he said. “One of the advantages of boomerangs is that they can take off immediately.”
The Salesforce Tower (left) and the Salesforce West office building in San Francisco, California, USA, on Tuesday, February 23, 2021.
David Paul Morris | Bloomberg | Getty Images
Your tasks will not be easy. In January, Salesforce said it would cut 10% of its workforce, or more than 7,000 jobs, as part of a restructuring plan. Benioff acknowledged that given the jump in sales during the pandemic, “we hired too many people, which led to this economic downturn.”
Benioff has been under pressure to report results as the stock has lost nearly half its value over the past year. Starting in late 2022, activist investors flocked to the stock, demanding more robust growth and profits and a more thoughtful approach to doing business.
In March, Benioff said Salesforce had disbanded its board of directors' mergers and acquisitions committee.
Inventory has increased, but growth is still slow
Bain then conducted an operational review between March and May. Consultants provided data to help executives compare Salesforce with other companies. The analysis resulted in more employees reporting to each manager, fewer salespeople visiting a particular customer and a more direct connection between salespeople and Benioff, Millham said.
In the July quarter, Salesforce's sales and marketing expenses totaled $3.1 billion, down 9%, the largest decline since the company went public in 2004.
That's one reason investors are back on board, with the stock up 62% this year, double the Nasdaq's gains.
Amy Weaver, Salesforce's chief financial officer, said the company reached its 30% adjusted operating margin target three quarters ahead of schedule.
Sales growth has not yet recovered, hovering around 11% over the last two quarters. But it is still early for the returnees.
Kelman, who returned in June, said that to boost marketing performance, among other things, the company uses its data cloud tool to quickly send messages to sales reps in Slack whenever a customer views a product page.
“We’re trying to grow all of our metrics very aggressively,” he said.
At the same time, Salesforce is looking for ways to increase efficiency. The company will increasingly make its products available to potential customers for use without involving salespeople, Millham said, a transition that will likely take years.
In an alternate reality, Millham could be one of the booming executives. In 2021, he received “an exceptionally good offer for a high-profile leadership position at a high-growth company,” according to Salesforce. Power of attorney form. Millham decided to stick around, and Salesforce rewarded him with a multimillion-dollar retention bonus in addition to other compensation.
Last year, Millham was promoted from chief customer success officer to COO, taking responsibility for much of the company. After Taylor resigned a few months later, he took on additional responsibilities.
“When you grow up here — I’ve been here 24 years now — you have a certain commitment to the company,” Millham said. “I wanted to make sure I stayed here and probably finished my career here. There is no doubt about that.”
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