Best practice: Salesforce.com Arsenio Otero VP Sales Strategy & Operations @arseotero

Ricardo Gundin Sr. Analyst, Sales Strategy

Safe harbor statement under the Private Securities Litigation Reform Act of 1995:

This presentation may contain forward-looking statements that involve risks, uncertainties, and assumptions. If any such uncertainties materialize or if any of the assumptions proves incorrect, the results of salesforce.com, inc. could differ materially from the results expressed or implied by the forward-looking statements we make. All statements other than statements of historical fact could be deemed forward-looking, including any projections of product or service availability, subscriber growth, earnings, revenues, or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief, any statements concerning new, planned, or upgraded services or technology developments and customer contracts or use of our services.

The risks and uncertainties referred to above include – but are not limited to – risks associated with developing and delivering new functionality for our service, new products and services, our new business model, our past operating losses, possible fluctuations in our operating results and rate of growth, interruptions or delays in our Web hosting, breach of our security measures, the outcome of any litigation, risks associated with completed and any possible mergers and acquisitions, the immature market in which we operate, our relatively limited operating history, our ability to expand, retain, and motivate our employees and manage our growth, new releases of our service and successful customer deployment, our limited history reselling non-salesforce.com products, and utilization and selling to larger enterprise customers. Further information on potential factors that could affect the financial results of salesforce.com, inc. is included in our annual report on Form 10-K for the most recent fiscal year and in our quarterly report on Form 10-Q for the most recent fiscal quarter. These documents and others containing important disclosures are available on the SEC Filings section of the Investor Information section of our Web site.

Any unreleased services or features referenced in this or other presentations, press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements.

Safe Harbor

Objectives of this session

Share the framework salesforce.com uses to segment and prioritize market

opportunities. Then provide a first hand look at how we manage aggressive

growth within a >$10B company

$16.9B

$16.9B

2014 CRM and AppDev Market for Europe Source: Gartner Enterprise Software Markets Forecast WW 2010 to 2017 Q3 2013 Update.

~150,000

Number of accounts in Europe in our instance of Salesforce.com

~150,000

Just Another Operational Problem?

Sub-Optimal Market Coverage

Leaky Talent Bucket Impaired

Performance Visibility

What Happens if You Get it Wrong?

Material $$ Impact to Your Business

Product + GTM + Rigor + Enablement = Growth Sa

les

Enab

lem

ent:

Del

iver

Exc

elle

nce

On boarding

Development

Tools

Product Strategy: Expand the Addressable Market

GTM Strategy: Accelerate Penetration via Focus

Segment Balance Hire

Operations: Rigorous Iteration Drives Growth

Measure Inspect Adjust

Product + GTM + Rigor + Enablement = Growth Sa

les

Enab

lem

ent:

Del

iver

Exc

elle

nce

On boarding

Development

Tools

Product Strategy: Expand the Addressable Market

GTM Strategy: Accelerate Penetration via Focus

Segment Balance Hire

Operations: Rigorous Iteration Drives Growth

Measure Inspect Adjust

GTM #1: Segment the Market  How segmenting the opportunity creates focus

Segment

# Companies

$ O

ppor

tuni

ty Sales teams naturally focus on the

most concentrated opportunity Big Investment… Big ROI

But, most of the opportunity is left untapped

GTM #1: Segment the Market  How segmenting the opportunity creates focus

# Companies

$ O

ppor

tuni

ty Segmenting differentiates investments in

teams, products and channel to create focus and accelerate revenue

Segment

 The Promised Land

•  AE Skill sets match acct complexity

•  Align resources with strategic market objectives

•  Logical career path

•  Maximize high quality touches

 Sales Strategy Levers

•  AE headcount allocation

•  Segment lines

•  Coverage programs (e.g. verticals, hunters)

•  Quotas

GTM #1: Segment the Market  Thoughtful segmentation gives an 80/20

Segment

GTM #1: Salesforce Segments by FTE Band  # FTE’s serves as a proxy for deal complexity, AE skill sets & resource investments

Segment

ENTERPRISE

MID-SIZED BUSINESS

SMALL BUSINESS

# FTE’s

Objective Avg Age # Trx/AE Cadence

Enterprise Solution Sale ~5 Months Low Annual

Hybrid ~3 Months Med Qtrly

Reach & Repeatability <1 Month High Monthly

GTM #1: Resource Prioritization Framework  Selection metrics refined based on experience

Market Size & Growth

Business Environment

Salesforce.com Momentum

Current Investment

• CRM & App Dev Spend Forecast by Cloud

• Economic Census Data

•  Industry Dynamics

• Employment Law

• Tax Burden

• Data Privacy

• Exec Insight

•  Investments to date in Sales & Supporting HC

• Leadership

• Bookings Trends

• Bookings by Cloud Mix

• Productivity

High Weighting

Medium Include / Exclude

Medium Weighting

Low Weighting

Segment

# Accts per AE Bookings Productivity

($ / AE / mo)

Pipe Gen

($ / AE)

Coverage % (% Accts w/

Oppty)

% AE # Growth

Quota Change

Enterprise <10

Mid-Size <500

SMB >500

GTM #1: Refine Segmentation Annually  Increase focus & productivity by adjusting lines, #AE’s and quota

Example Segmentation Analysis

Segment

GTM #2: Balanced Territories

 Coverage balance & workload •  Avoid coverage gaps by balancing

capacity

•  Maintain reps morale and optimism

 Measurement & rewards •  Merit drives rep performance •  Pay for performance, not territory

potential

 Customers & revenue •  Maintain focus on existing customers •  Spread revenue “risk” evenly

 The company benefits from a fair and level playing field

Seg

men

t Rev

enue

# of Sales People

Spreading territory potential evenly across sales people actually increases revenue!

Revenue Potential Revenue Performance

Balance

 SMB:  “Score” the Opportunity

•  Backward looking (based on historical performance) •  Predictor of ACV by acct type •  Oriented geographically

(zips) •  Volume of accts enables

a more statistical approach

 ENTERPRISE / COMMERCIAL:  Account-level Bookings Potential

•  Forward looking •  Account level detail

enables granular carving •  Accessible CRM Seats x

Propensity to Buy

GTM #2: Carving Algorithms  One Size does NOT fit all

Balance

GTM #2: Enterprise Balanced on Potential  Estimate of near term revenue by Account helps prioritize coverage resources

CRM Market Potential

Industry Propensity

Customer Status

Penetration Rate

# Employees

Estimated CRM % Per Industry

ASP

Close rate TTM for defined Industry

CRM License / CRM Employee

Existing Customer

Seeded Customer

Prospect

CRM Bookings Potential per Account* =

Momentum

FY Pipe Gen

Bookings potential informs territory assignment & enables inspection

Propensity to Buy

Balance

•  # of Customers by Type •  # of Prospects •  Business Density •  Add-On vs. New Logos

•  Top down carving of Areas, regions, territories

•  Mapping tool optimizes territories by zip codes

•  Managers adjust based on local knowledge

•  Must maintain score balance +/- 10%

•  Proposed territories inspected for equity

Regression Scoring Mapping Optimization Manager Judgment

GTM #2: SMB Balanced on Trends  Postal code scoring and mapping technology ensures balanced territories

Balance

GTM #3: Buffer for Growth & Hire Aggressively  Take hiring as seriously as revenue growth

Late Hiring

Early Hiring

Minimize the Disruption of Sales Growth • Set hiring expectations early • Carve buffer territories to avoid disruption

Reward Managers for early Hiring

Policies • Managers split un-assigned territories among

current reps • Give hold outs on open opportunities when

new rep joins…with an expiration • Managers get a quota buffer for performance

management

Rep HC 6 6 7 7 8 8 9 9 10 10 10 10

Hire

Align with CEO Priorities

GTM #3: Retain Top Talent

Align with CEO Priorities

Align with CEO Priorities

•  3 Phase Onboarding •  Skills Training •  Product Certification •  Education Credits

•  Up Market •  From AE to Manager

•  Chatter Recognition •  Contests & SPIFFs

TRAIN PROMOTE CELEBRATE

Hire

Product + GTM + Rigor + Enablement = Growth Sa

les

Enab

lem

ent:

Del

iver

Exc

elle

nce

On boarding

Development

Tools

Product Strategy: Expand the Addressable Market

GTM Strategy: Accelerate Penetration via Focus

Segment Balance Hire

Operations: Rigorous Iteration Drives Growth

Measure Inspect Adjust

If it’s not in the App, it does not exist

Standard definitions

Marc, Keith, Tony & Brian can inspect anything

Chatter makes inspection easy

Rigor #1: Single Source of Truth  Forcing a single source of truth boosts decision-making  confidence

Measure

Inbound Traffic •  Web traffic # •  Event

Attendance •  Response Rate

Visit/Lead Ratio •  By Offer •  AB testing

Qualification •  Conversion rate •  Avg Deal Size •  Pipe Gen / AE

Sales Cycle •  Length •  Leaks in Funnel •  Competition

ACV & Coverage •  ACV per AE per month

(Productivity) •  Transaction Volume •  Avg Deal Size •  Close Rates •  ACV mix by Product •  Account Coverage %

Rigor #1: Standardize Metrics

 Success should be transparent to everybody Measure

Rigor #2: Inspect Performance

 Set Goals:  Inspect Performance   •  Senior Execs define objectives

•  Public inspection via Chatter •  Cross-functional teams have

skin in the game

 Objects Chatter: Easy Inspection

 Senior executives, cross-functional teams and peers drive accountability

Gordon McCance changed Close Date from 9/30/2011 to 7/29/2011. July 19, 2011 at 1:42 PM · Comment · Like

Patrick @Kris Is this real for the month July 20, 2011 at 7:55 AM · Comment · Like

Gordon changed Close Date from 9/30/2011 to 7/29/2011. July 19, 2011 at 1:42 PM · Comment · Like

Patrick @Kris Is this real for the month July 20, 2011 at 7:55 AM · Comment · Like

Kris We have a written confirmation from the buyer that they need these licenses. Just got it yesterday. However, we need to validate before we put it in Commit. July 20, 2011 at 8:38 AM

Gordon changed Close Date from 9/30/2011 to 7/29/2011. July 19, 2011 at 1:42 PM · Comment · Like

Patrick @Kris Is this real for the month? July 20, 2014 at 7:55 AM · Comment · Like

Kris We have a written confirmation from the buyer that they need these licenses. Just got it yesterday. However, we need to validate before we put it in Commit. July 20, 2014 at 8:38 AM

Gordon Coming in now! July 21, 2014 at 2:37 PM

Gordon changed Close Date from 9/30/2014 to 7/29/2014. July 19, 2014 at 1:42 PM · Comment · Like

Inspect

AdjustRigor #3: Make Change Happen

 Rapid iteration requires clear expectations & constant communication

FREQUENCY OF CHANGE

High

Low

Mktg Programs

Promotions / Performance mgmt

Segment Lines

Quota Levels

Incremental Investment (ie #AE’s; Mktg Budget)

New Roles

Leadership Focus

Sales Tactics

Product + GTM + Rigor + Enablement = Growth Sa

les

Enab

lem

ent:

Del

iver

Exc

elle

nce

On boarding

Development

Tools

Product Strategy: Expand the Addressable Market

GTM Strategy: Accelerate Penetration via Focus

Segment Balance Hire

Operations: Rigorous Iteration Drives Growth

Measure Inspect Adjust

Sales Enablement is a Cross Company Initiative

It All Starts With Sales Values

Align with CEO Priorities

Build Coaching Culture & Reporting Cadence Deliver Tools & Training

Reps Company Management

Transformation Never Stops

iPad Powered

Business is Social

Sales Process

Social Collaboration

2009 2010 2011 2013

Drive Skills & Product Learning

2012

Comprehensive development program

Months 6 - 9 Months 9 - 12

SR Pre-work (Week 1&2)

SR Do My Job (Week 4-8)

Essentials: On the Job Experience and Coaching Fundamentals Week 1 – 8

Ready for Customers

Boot Camp (Week 3) Months 3 - 6 Pre-work (Week 1&2)

Level 1 Onboarding Level 2 Ramping Level 3 Certified Level 4 Mastery

Journey to Success

Product knowledge

Skills Training

#1 On boarding

Months 6 - 9 Months 9 - 12

SR Pre-work (Week 1&2)

SR Do My Job (Week 4-8)

Essentials: On the Job Experience and Coaching Fundamentals Week 1 – 8

Ready for Customers

Boot Camp (Week 3) Months 3 - 6 Pre-work (Week 1&2)

Level 1 Onboarding Level 2 Ramping Level 3 Certified Level 4 Mastery

Journey to Success

Product knowledge

Skills Training

Enablement #1: Why We Use Chatter

•  Collaborative •  Productive Faster •  Real-Time •  Contextual

•  Speed To Answers •  Many-to-Many •  Searchable “Archive”

On boarding

Enablement #1: Chatter Groups On boarding

Enablement #1: Onboarding Plans On boarding

Enablement #1: Prerequisites for Bootcamp On boarding

Enablement #1: Sales Enablement Group  Training & 1:1s

Leveraging your extended team Org62 Quiz

Social & Mobile Productivity

Opportunities & Activities

Reports & Dashboards

Pricing, Quoting & Legal

On boarding

#2 Development

Months 6 - 9 Months 9 - 12

SR Pre-work (Week 1&2)

SR Do My Job (Week 4-8)

Essentials: On the Job Experience and Coaching Fundamentals Week 1 – 8

Ready for Customers

Boot Camp (Week 3) Months 3 - 6 Pre-work (Week 1&2)

Level 1 Onboarding Level 2 Ramping Level 3 Certified Level 4 Mastery

Journey to Success

Product knowledge

Skills Training

As a manager, this format gave me a first hand view into my team’s strengths and weaknesses.

– Salesforce Sales Manager

Enablement #2: On going Badging Process

“The badging process has given me the keys to differentiate my speech. I’ve got now the methodology and tips to bring my customer on an innovative journey!” - Yannis D., Account Executive, France

Development

Enablement #2: Corporate Pitch “Badge” Development

Enablement #2: Badge Scoring

COACHING & GLOBAL

ALIGNMENT

Development

Enablement #2: Badging Report & Badging Feedback

Management Reporting & Dashboards

100% Transparency

Accountability

Coaching Opportunity

Development

Enablement #3: Consistent Process is the Heart of Transformation

5 Step Sales Transformation

1.  Crowd-source best practices

2.  Use events to build momentum

3.  Empower managers with tools

4.  Reinforce with technology

5.  Celebrate success

Research Innovate Share Vision Value Sell Discovery

Development

Enablement #3: Reporting/Dashboard Kit Created for Managers

Dashboard Library Crowdsourced

Every manager

is trained

Used for coaching

Revenue Performance Pipeline

Forecasting Activity

Tools

Enablement #3: Playbooks Tools

Enablement #3: Salesforce1 App for Sales

Today & Productivity Tools Get a view of your schedule for the day. View meeting attendees & dial directly

into meetings

CRM Data & Analytics Access all the CRM records, custom objects, and dashboards that you’d

have access to on your desktop

Custom Actions & Apps Use Publisher actions to move business forward while you’re

away from your desk

Tools

Product + GTM + Rigor + Enablement = Growth Sa

les

Enab

lem

ent:

Del

iver

Exc

elle

nce

On boarding

Development

Tools

Product Strategy: Expand the Addressable Market

GTM Strategy: Accelerate Penetration via Focus

Segment Balance Hire

Operations: Rigorous Iteration Drives Growth

Measure Inspect Adjust

Thank you