Salesforce launches Starter to ward off competition in the SMB segment

Salesforce has made its customer relationship management (CRM) suite, dubbed Starter, generally available in an effort to garner more market share in the small and medium businesses (SMBs) segment as it faces stiff competition from rivals such as Zoho.

Starter made its first appearance in June when the company launched it specifically in India, targeting one of the largest SMB markets in the world before it made the new offering available for the other markets.

“As the company has grown and its portfolio matured, the focus of many of Salesforce’s success stories has been on the larger mid-sized fast movers. With all the tools, solutions, and cloud offerings, the classic SMB got confused, lost, and possibly overlooked in the Salesforce ecosystem,” said Liz Miller, principal analyst at Constellation Research.

The new CRM offering packages all the necessary components of a CRM suite in a simplified manner and this will make it easier for SMBs to adopt, Miller added.

Salesforce itself admits that SMBs often face issues with integrating CRM software and that Starter was designed specifically to counter these issues.

So, what is Salesforce Starter?

Starter, according to the company, combines Salesforce’s key offerings across its sales, marketing, and service portfolio into one suite with a simplified user interface on the back of its Data Cloud.  

“With Starter, we rethought everything — from how people use the product to how they buy and get started. We improved the user experience to help enterprises move fast, adding in-app guidance and ready-to-use, pre-built tools and templates,” Kris Billmaier, general manager of Salesforce Starter, said in a statement.

Sales capabilities added to Starter include features such as homepage, easy email integration, out-of-the-box sales, and default dashboards for reporting. While the homepage feature provides a digest of contacts, leads, and opportunities in one place, the easy email integration feature can be used to connect an inbox to Starter with the help of Einstein Activity Capture, the company said.

Salesforce has also added service capabilities, such as case management, knowledge management, automating repetitive tasks, and connecting email support to Starter.

Starter also comes with marketing capabilities such as building campaign templates, audience creation, e-mail builder, content personalization, and campaign analytics capabilities.  

Stiff competition in the SMB market

Salesforce’s move to launch Starter can be attributed to the stiff competition the company faces in the SMB market from rival CRM software providers who rapidly gained customers and market share while Salesforce focused on larger enterprises, according to Miller.

“All-in-one business operations platforms like Zoho offer packages that fit the ‘solo-preneur’ all the way up to tools for enterprises,” Miller said. Other CRM packages such as Keap also offer easy-to-use sales and marketing growth tools attracting, Miller added.

Continued pressure for growth from investors could also be a reason behind the launch of Starter, according to Maribel Lopez, chief analyst at Lopez Research.

“The SMB market, while not as lucrative on the top line, can be very profitable if a vendor understands how to control its cost of acquisition and service,” Lopez said, adding that Salesforce’s recent growth has mostly been related to acquisitions of new lines of businesses, including Slack, Tableau, and MuleSoft.

The decision to make Starter more widely available could result in long-term revenue gains for Salesforce, at least in the next 5-10 years as today’s small businesses could become bigger in the coming years, said Hyoun Park, chief analyst at Amalgam Insights.

Salesforce itself views the Starter offering as an entry-level product that any enterprise could use to get a taste of its offerings. Earlier, the same product with lesser capabilities was released as Salesforce Easy in 2022, according to market research firm Valoir.

Will the pricing work for SMBs?

Salesforce Starter’s pricing of $25 per user per month, according to analysts, will be attractive for most SMBs.

However, the pricing also reflects that Salesforce’s prior Professional and Essentials offerings were not in line with the market for SMB functional demands in the CRM market, Park said, adding that Starter’s pricing eliminates the barrier to adopting Salesforce offerings.

Starter’s pricing can also play spoilsport for most rival CRM providers in the SMB segment, analysts said, adding that vendors such as Hubspot, Zoho, Monday.com, and Pipeline will be under pressure. Salesforce is also offering a trial period of 30 days for Starter.