Friday, January 21st, 2005
Since I hope soon to hire a salesman/consultant to help us connect bloggers and advertisers, taking some pressure off Miklos, Peter and me, it’s time to stop relying on our inhouse wiki and notebooks to keep track of our customer universe. Ben, Dana and I were talking about the need for a product that is simpler and cheaper than Salesforce.com, which we used five years ago for Pressflex sales when we dreamed of 5000 clients and $5 million in VC. Idiots we.
The reason there are so few CRM vendors is not because it’s costly to build great CRM applications, but because of the costs required to market and sell CRM applications. Take a look at the financials of any of the established CRM players, both hosted and on-premise. What you will see is that less than 15% of a CRM vendor’s revenue is applied to product development and easily 50-70% of revenue is allocated to sales and marketing expenditures. This has been the norm for traditional software companies, but is it the right model for today?
A similar analysis applies to advertising, BTW.