I had dinner recently with someone who used to run an ERP company. He told me a story about losing a large potential deal to a competitor whose product was less suited and whose price was astronomically higher.
They went to the buyer and asked them why they’d done it.
“Well, you guys are too small,” was the answer.
At this point, the company was turning over about a billion SEK ($100m US) a year and had offices in twenty countries. So, the answer didn’t feel right.
Ultimately, my friend concluded, some buyers purchase IT systems the way some consumers purchase a luxury brand watch or purse. Not because it’s the better option or has more features or is more beautiful, but simply because it caters to their ego. It makes them feel like they have a higher status. And it signals to the world that they are successful and wealthy, whether that’s true or not.
This conversation got me thinking about why people might choose a CRM that’s overpriced (like Salesforce), and why they might not leave it even when there are better solutions. Here’s what I came up with.
- It’s the “luxury model”
I agree with my friend that sometimes IT buyers purchase a platform for the same reasons, consciously or unconsciously, that drive people to purchase overpriced luxury items. Choosing the “name brand” that everybody knows makes them feel important and successful.
Of course, that’s a silly reason, but I do think it’s a real one sometimes.
- It’s the popular (hence safe?) option
A related reason people might not leave Salesforce is that it’s what everyone else is using. A cognitive bias called the bandwagon effect often makes the most popular option look like the best, and safe, one, even when it’s not.
But I think there are some other reasons that are more rational, and probably more common, than these first two.
- The competing solution isn’t powerful enough
Salesforce is a huge, sprawling platform with a lot of clout in the industry. It makes sense that companies using it might feel that it’s the only solution powerful enough to handle their business.
Sometimes, being the huge, sprawling platform can cause more problems than it solves. But it’s understandable that a large organization might feel that they need all the bells and whistles that a large platform comes with.
- They already spent the money
Most people don’t like to have to start over once they’ve invested in something. And Salesforce is a big investment. Not only is there the per seat price, but there’s also the cost of all the plug-ins, add-ons, customizations, and the maintenance required to keep everything running.
But even when the math doesn’t add up, humans can fall prey to the sunk cost fallacy and keep investing in the wrong solution way past its expiration date.
On that note, here’s an article about a former FBI agent turned private investigator focused on helping companies negotiate their Salesforce agreement.
- It will take too long to change
Few companies can afford to slack off on sales activities while they implement a whole new CRM platform. It makes sense that sales organizations want to maintain momentum, and avoid the risk of a long, invasive implementation process.
The good news is that switching from Salesforce to a platform like Membrain isn’t as hard as you think. In fact, with the Clearpath Promise, it can be pretty straightforward.
- Their salespeople are used to it
We hear this one a lot. Naturally, people like to stick with what’s familiar. So “our salespeople are used to it” sounds like a valid reason not to switch.
And it’s true they’re used to it. It’s also true that they hate it.
Switching to something new that they love beats sticking to something they’re used to and hate.
- It’s connected to all our other systems
Once you’re on the Salesforce platform, they encourage you to connect their platform to all your other systems. They are proud of their integrations. And rightly so. After all, the more you connect to their platform, the stickier they become, and the harder it is to leave them.
And on the surface this seems like a good deal for you too: Your CRM talking to your ERP, talking to your customer service platform, talking to everything else.
Paradise.
Sadly, it rarely works like that. Some integrations can be extremely helpful, but more often the integrations are glitchy, and the out-of-the-box connections rarely work like they’re advertised. Companies end up spending more and more time and money trying to get everything to update accurately and efficiently and often failing.
Ultimately, they end up with a Frankenstack they no longer know how to control.
And what about you? If your company is still on Salesforce, why? Do you absolutely love it? Or are you being held captive? Are you thinking about leaving Salesforce and haven’t decided yet? I’d love to hear your stories.
