Trailblazer

by Marc Benioff

  Ever since Bernie Marcus and Arthur Blank dreamed up the idea for a one-stop shop for home improvement supplies at a Los Angeles coffee shop in 1978, the company had been a high-flying and highly profitable phenomenon. Its big-box stores with bright orange signs brought convenience and order to the disparate, sclerotic supply chain that had long frustrated contractors and homeowners. It also harnessed, and likely accelerated, a major socioeconomic shift: The strong economy, combined with easy credit, not only fueled a massive housing boom, it also turned millions of Americans into home-improvement junkies. TV shows about buying, renovating, and flipping houses began dominating the ratings, earning Home Depot an enviable position at the center of the zeitgeist.

  Home Depot was hardly the only Salesforce customer popping champagne as the housing bubble kept on growing. But the Great Recession left it with a hangover that was worse than most. Plunging home prices, tightening credit markets, and disappearing jobs brought its expansion to a screeching halt. People had lost all enthusiasm for renovating their homes. They just hoped to hold on to them.

  After Lehman Brothers collapsed in September 2008, triggering a massive stock market dive, Home Depot’s chief financial officer ordered its store managers to transfer all of their cash—every crinkled bill in every register and safe across the country—to Atlanta headquarters. Over the next several months, the company did everything it could to make that cash last: slashing all capital spending, freezing plans to open new stores, halting its stock buy-back program, closing three major divisions, and laying off seven thousand employees.

  Home Depot’s sprawling stores and giant inventory, once their greatest competitive advantage, suddenly became their biggest liability. The aisles and parking lots that had once been bustling were now virtually empty. Sales suffered double-digit drops, and thousands of orange-aproned sales associates who’d built up years of expertise and close customer relationships were rendered expensively idle. Worse yet, Home Depot could hear the ominous footsteps of online retail giants like Amazon challenging them with their impossibly low prices. Like many brick-and-mortar retailers, Home Depot began to suspect that some customers were using their stores as product showrooms and their employees as consultants, then driving home and buying what they needed online.

  At Salesforce, Home Depot’s predicament was a source of grave concern. Since the company became a customer in 2007, we’d worked with them with some smaller projects at the margins while suggesting grander ones. We wanted to help Home Depot prepare for the wave of digital disruption that was about to upend retail. Now was not the time, executives told us. The company wanted nothing to do with any new spending.

  In 2011, the market had finally begun to come up for air, but it was clear that the economic recovery wouldn’t compensate for all the sales migrating online. We knew that if Home Depot was to have a strong future, it needed to embrace a digital strategy.

  Even before the Merrill debacle, we’d believed that it’s every Salesforce employee’s job to listen to our customers—to try to understand what they actually need, rather than pitching them our latest products and trying to maximize sales. To do this well, we’re often forced to step away from our desks and walk in a customer’s shoes. That goes for the CEO, too.

  So in 2011, I decided to get involved personally on Home Depot. I worked with our Salesforce office in Atlanta to hammer out a plan, then flew out to present it to Home Depot’s executives. My goal was to inspire a mindset shift. I wanted to convince them that technology could be a savior, rather than a death sentence.

  As we rode to the meeting, Warren Wick, the head of Salesforce’s big accounts in Atlanta, felt optimistic. Home Depot’s defensive plays had started to pay off, he said. Finally, they were ready to go on offense. As we pulled past security in the parking lot, however, we both fell silent when the guard referred to the corporate headquarters as the “Store Support Center.” That told me everything I needed to know. Clearly, Home Depot still thought its future rested with just its physical big-box stores, when it should have been embracing a digital strategy where customer support could occur online.

  “At Home Depot,” Warren explained, confirming my worst fear, “the mindset is all about the stores.”

  “Do they realize Amazon has no stores?” I replied.

  We had to convince Home Depot to put its community—not physical stores—at the center of its culture.

  Technology can be disruptive. Thousands of companies live in fear of being “Ubered” or “Amazoned,” and in many cases, rightly so. But at the same time, technology has incredible value to connect and empower your customers. That was exactly what Home Depot needed to do, and I believed that Salesforce’s engineers could deliver the perfect software for the job.

  The challenge was bigger than we thought. The company didn’t even have a customer database. “We still need a whole lot of help in the technology area,” Matt Carey, the chief information officer, told me. Yet the problem wasn’t the technology per se. It was missing the opportunity for a multifaceted relationship with their customer.

  We proposed that Home Depot invest in the success of the homeowners and contractors it serves. That meant providing them a way to get the tools, materials, and advice they needed to complete a job, not just by visiting the orange-aproned representative in the store, but also by logging in online from the comfort of their home or job site.

  It was a pretty simple idea, really, I told Matt: “What you need is a new way to build a deep connection at every possible level.”

  We built a software application that linked up its hyper-knowledgeable orange-aproned associates all over the country, allowing them to consult one another instantly on mobile devices. If a customer had a question they couldn’t answer or an item they couldn’t find, or if an associate wanted to consult with or offer guidance to colleagues, they could type a few lines and voilà!

  Home Depot’s new Warehouse application grew rapidly. By 2018, this hive mind had 190,000 active users and 2 million posts per month. When a customer walked inside one of the company’s cavernous stores, they knew they were almost certain to get the answers they needed to fulfill whatever vision they had for their project. Over time, contractors and homeowners stopped treating Home Depot as a glorified showroom and began to see it as a welcoming community of knowledgeable associates willing and able to help them pick out the perfect paint color, the best washing machine, or the right power tools to get a job done.

  Eventually Salesforce helped Home Depot establish one-stop resources for customers embarking on DIY projects like remodeling their kitchen, as well as a system for placing orders with contractors to oversee renovations like gutting an old home or installing a new toilet.

  In 2014, Home Depot finally stopped treading water. The company defied all expectations, not to mention the trajectories of most big-box retailers, by undergoing a serious growth spurt. Thanks largely to its burgeoning online retail business, the company’s share price more than doubled over the next four years. In 2017, Fast Company named the retailer one of the world’s most innovative companies.

  The secret to Home Depot’s success was combining its physical locations with its online services to create the community experience that customers really wanted.

  Home Depot’s business used to hinge on how many drill bits and sheets of drywall it pushed through the checkout lanes. By linking its far-flung associates wirelessly, and connecting consumers and contractors as well, Home Depot realized that technology was not the enemy.

  I can’t put a dollar value on the pride a customer feels opening a bottle of wine inside the beautiful new gazebo she built, or the sigh of relief a contractor breathes when he gets a tough job done not only on time, but under budget. What I can tell you is that Home Depot changed the narrative. It stopped viewing technology as a threat but rather, as Matt described it, as a tool to help its own custome
rs feel understood, connected, cared for. And when it succeeded, so did we.

  Success, Redefined

  Over the years, Salesforce has benefited from some favorable, well-timed tailwinds. One of them, undoubtedly, is the shift to online commerce and the increasing emphasis companies are placing on the digital customer experience.

  By 2013, the fledgling industry we’d gambled on back in 1999—customer relationship management, or CRM—had become the largest and fastest-growing software segment in the industry. After all, every company with products to sell saw the need to take friction out of their online customer interactions, and this necessity had rippled outwards up from sales departments and IT to just about every business unit.

  At the time, though, I couldn’t have known that the customer success philosophy would soon be a boardroom topic. And it’s not only relevant in industries like ours that are primarily devoted to serving other businesses. “Customer success” has become a buzzword in every sector, from transportation and entertainment to retail and financial services.

  Nothing a company does is more essential than how it engages with customers. In a world where online portals are replacing customer service centers and algorithms are replacing humans on the front lines, companies like ours continually need to show that the personal connections our customers craved were still—and always would be—there. I don’t just mean connections with our sales reps or customer success managers, but with the CEO, too.

  Even now that I run a company of more than forty thousand employees, I’ve never forgotten what I learned from my dad: Nothing can take the place of human relationships, the bedrock of any business. In 2013, we realized that as we were gaining more and more business around the world, I would need to bring on another executive—someone who shared the company’s values and who could work with me to connect with customers on that human level.

  For years, I’d been trying to bring Keith Block to Salesforce. And now I decided it was time to pursue him with everything I had. Keith and I got hired at Oracle around the same time, but we worked on different coasts and didn’t know each other well. He had stayed for more than two decades, most recently as a top executive building up their enterprise business. I knew that he was the rare sort of person who could “speak the language of the customer” and help us in the next phase of growth.

  Around the time we were working on our Merrill Lynch “Get Well” program, I asked Keith to breakfast in San Francisco. Keith hails from Boston, so naturally we kicked off our meeting with an impassioned discussion of our respective hometown teams: his Patriots and Red Sox and my Golden State Warriors and Giants. Then, for the next two hours, we exchanged our views on innovation, company culture, and of course, customer success.

  Keith had studied information systems and management science at Carnegie Mellon, and his perspective on these subjects was deep, and eye-opening. I could also tell that his East Coast professionalism and measured demeanor would be a nice complement to my California vibe and outgoing personality. Once I discovered that he owned a Hawaiian shirt (a sartorial favorite of mine), I knew the stars had aligned.

  Shortly thereafter, Keith became our new president and then chief operating officer. It’s hardly a secret that talent is the foundation that any great company is built upon, but it’s hard to overstate how strong a pillar this one particular hire would turn out to be. As Salesforce expanded its portfolio of products beyond sales and service to include marketing, analytics, AI, and more, Keith helped us expand our footprint into financial services, healthcare, retail, and other kinds of diverse businesses all over the world.

  I now know that adding Keith to the team made our customers more successful because it helped the entire company better meet their needs. Turns out that customer success isn’t just a virtuous cycle; it’s also a two-way street.

  A Mile in Their Shoes

  When I think back to our near disaster with Merrill Lynch, I can’t forget something Ulrik Nehammer, the former chief executive of Coca-Cola Germany, once told me, shortly before he came to work at Salesforce. “The most dangerous place to make decisions is in the office,” he said. “You need to make decisions where the customer is.”

  Which is why, for the final phase of our “Get Well” campaign, Simon’s army of engineers basically moved into Merrill’s offices and camped out next to the advisers as they worked. This extremely close proximity allowed them to address the deeper software problems we’d already uncovered and root out new gremlins. It also enabled them to tinker with solutions on the spot, and then gauge the advisers’ reactions.

  In September 2014, roughly a year after the first alarm bells were sounded, we rolled out a new console to all of Merrill Lynch’s advisers, who by then numbered twenty-five thousand. We gave them a whole new way of calendaring and scheduling, we simplified how they captured notes and created tasks, we even introduced a new search paradigm. Within months, adoption of our platform inside the company climbed from 60 percent to 90 percent. Soon we were out of “containment” and back in their good graces.

  It’s possible that we could have saved our Merrill account by micromanaging the problem and doing just enough to quell their frustration. That certainly would have been easier. Instead, we attacked the problem by remembering what we aspire to become and being unafraid to reconsider the methods that worked for us in the past.

  It felt great to win back their business, but for me, what felt even better was the perfect synergy our values had created: prioritizing “customer success” won us back Merrill’s trust, while also fostering new solutions and innovations. The crisis also gave us a new blueprint for how to troubleshoot with our customers, and a useful reminder that success is not a matter of doing just enough to keep a customer’s business, it’s about giving customers the tools they need to succeed—both now and in the years ahead.

  * * *

  These learnings would prove useful when a new customer soon came to us with a problem of a different kind.

  It was Kasper Rørsted, CEO of Adidas, who told us that his multinational sportswear brand was trying to get a handle on the emerging generation of shoe buyers. These people were digital natives who expected “instant gratification,” he explained, and Adidas was facing considerable pressure to ensure they received it. Too often, online customers were seeing the words “come back later,” or worse, “site down,” flash across their screens when they visited the Adidas site. When the company offered a limited number of pairs of its wildly popular Kanye West “Yeezy” shoes for sale online, for one day only, the volume of traffic crashed the site, embarrassing the company, alienating its customers, and even straining its relationship with Kanye. Adidas needed to transform its entire customer experience, eliminating the kind of friction that turned people into critics rather than evangelists.

  Adidas knew the next Yeezy shoe would be huge. The demand was already there. Success, as Adidas defined it, was a matter of providing a transaction experience that would live up to customer expectations and build personalized connections with hundreds of millions of fans.

  We worked with Adidas to make sure the platform could handle a high number of simultaneous visitors, as well as weed out the hacker bots that manipulated the system to buy Yeezys and other hot items in bulk for resale. We were able to handle the technical issues pretty quickly, helping Adidas achieve a record holiday season’s one-day sale, while creating a digital community around the brand.

  The larger strategic challenge Adidas faced, however, was parlaying product demand into more lasting relationships with its customers. The company needed a better way to keep sneaker fanatics engaged with its website more frequently, in higher numbers, flash sale or no flash sale.

  Before writing a single line of code, we all ordered sneakers with Adidas’s signature three-stripes logo. We’d always talked about the importance of walking a mile in a customer’s shoes, so here was our
chance to actually do so. With my size-14 Pharrell Williams Adidas sneakers on my feet, I rounded up some of our best engineers and data scientists and told them all that they were going to be embedded at Adidas headquarters. It wasn’t long before Salesforce’s then chief product officer, Alex Dayon, pulled into Adidas headquarters with an eighteen-wheeler filled with demos and robots to demonstrate how artificial intelligence could help the company get to know its customers better and engage with them like never before.

  An AI-powered website could analyze the data stored on past purchases and use it to personalize every customer interaction by predicting which styles each shopper would want and directing them to special offers. These intelligent product recommendations would help customers find exactly what they wanted.

  In November 2017, Adidas launched an AI-powered app built with Salesforce that by spring 2019 had been downloaded more than seven million times in more than twenty-five countries. In 2018, the company’s online revenue skyrocketed 36 percent.

  The success Adidas achieved was our success as well. We listened to them, absorbed their culture, and understood what they really needed. That’s how we partnered with them to achieve it.

  * * *

  As I write this, I know there are countless mysteries about the future of business that we’ve yet to unravel. That’s a process that will never end. When it comes to customer success, however, I have achieved absolute clarity on four points.

  First, technology will never stop evolving. In the years to come, machine learning and artificial intelligence will probably make or break your business. Success will involve using these tools to understand your customers like never before so that you can deliver more intelligent, personalized experiences.