Welcome to the "Steve reads his posts podcast". For those of you who are too busy, or too lazy, to actually read my posts, I have taken on the huge effort of reading them to you. Enjoy.
Steve has yet another Chat with Charles
I have had my head down working on some big things since RapidStart CRM growth exploded, and it has been a while since you heard from me. Well, I'm getting back to it with a follow-up chat with Charles Lamanna who recently took over for James Phillips as head of Business Applications for Microsoft. This was my fourth chat with Charles, and it was interesting to back listen to them in order. It really gives you a sense of where Microsoft has come. I managed to catch him in his office having just wrapped up their year-end. Enjoy!
If you want to listen to my chats with Charles in order, The first one was October of 2018, the second one was September of 2019, the third one was March of 2020.
Welcome to the Steve Has a Chat Podcast. Where I call someone out of the blue with a record button on, and hope to have an unscripted conversation about Microsoft business applications. Let's see how it goes. Enjoy.
Hey, this is Charles Lamanna.
Charles. Steve Mordue. How are you doing?
Good. Great to hear from you, Steve. It's been a long time.
It has been a while. Have you got some time for a chat?
For you, anytime.
I appreciate it. Well, I guess the big news for you obviously is putting on the big boy hat, huh?
Yes. I moved up an extra floor in the Advanta building in the Microsoft Campus.
Oh did you?
No, I'm just kidding. But metaphorically speaking at least. Because for folks that don't know, James Phillips leaving in March of this year, I kinda stepped in across all aspects of business applications of Microsoft. And, over the last four years, I've gotten to know the place, know the people, know the business and I'm super excited about the opportunity. And I think the future has never been brighter for business at Microsoft.
Well, I never got the feeling that James held you back, or any of the folks on your team back, but he certainly, we have to give him a lot of credit for really taking this thing to a whole nother level. You weren't here before, I don't think, at least with the business apps, but it was really run by morons before he took over. And he completely turned that thing around and turned it in a whole nother business. And now with you taking over, I'm expecting that to continue. I don't know if there's been some things that have been in your bag that you've wanted to do that James was keeping you from, that you're going to pull out, or if you're just going to continue the path, or what's your thinking now that you've got that gavel?
So definitely not held back. I would say I was super fortunate I worked for James for, I think seven, eight years in total. So I was able to learn a bunch and he was without a doubt, the most supportive manager I've ever had in my career, in terms of both enabling and clearing paths for what we wanted to do from a vision and dreaming perspective. And if it weren't for his support, things like Power Apps would have never gotten off the ground. So, definitely. And I think as we go to the future, we have this amazing foundation. I mean, BizApps is a major and key component and pillar of the Microsoft Cloud.
10 years ago, you probably would've thought that impossible. Right. To have Dynamics and Power Platform alongside Azure and Office. Now that we're here, let's go take it to the next level. And that's the push, and it's continuing a lot of the great innovation we've already done from a data-first, AI-first approach. Kind of sprinkling in some more collaboration with teams, and really revisiting the end-user experience, the platform, to go increasingly modernize and scale it and make sure that all our components from CRM, to ERP, to Power Platform work great together.
I don't think it could have achieved that status with Dynamics 365 alone. It really took the Power Platform coming into being, I think, to give it the breadth that it nee
Let's Talk About Funnels
In my 20-plus years in this CRM business, I have seen my share of "Funnels". Lead Funnels, Sales Funnels, Delivery Funnels, every kind of business-related funnel you can think of, I have probably seen it. From what I have witnessed, most businesses have no idea how to use them effectively. So, let's talk about Funnels.
The Numbers Game One of the most significant areas I see where customers are consistently missing the mark is in their Sales Funnels. While at the same time tripling their investment in Lead Funnels. The logic seems to go like this; if we currently convert 5% of our Leads into Sales, we just need 10X more Leads. As if somehow, by dramatically increasing the size of a pile of crap, the smell will improve. But, logical as their argument may be, the math does not hold up in execution. If your sales process is working as hard as possible to convert 5% of your Leads, multiplying what gets thrown into that process by ten will not result in a 10X sales increase; more likely, your conversion rate will plummet. And, by the way, multiplying your leads by ten is not cheap or easy to do either.
Fixing the Right Problem Don't get me wrong; Leads are vitally important to any business. But creating a waterfall that you are only capturing a bucket from is more than a waste of money and energy; it could actually be hurting you. If 95% of your Leads are not buying, then something is broken, and shoving more people down a broken path is like shooting a bullet into the head of each of those missed opportunities because they are now dead forever. Today you seldom get a second chance.
What is a Healthy Conversion Rate? That depends on many factors, varies widely by industry, and actually starts with your Lead Funnel. Wide funnels will capture a large number of non-prospects. Why do they click or call when they are not valid candidates? Who knows, boredom, bots, etc.? Either way, they are a waste of your resources. This is a common technique employed by many marketing/SEO agencies, creating a wide funnel so they can point to how many leads they generated to justify the continuation of their services. But the number is not important if you only convert a small percentage of them. There are three possible reasons that you are not converting more. Either a) your value proposition is crap, b) your leads are the wrong people, c) your sales funnel sucks, or a combination of these.
Your Value Proposition Your perception of your Value Proposition is irrelevant, it is something seen through the eyes of your Prospects, and even highly qualified Prospects will each view it differently. How hard is it to sell your product or services to a qualified lead? If it is too hard, there is something wrong with your value proposition. If it is too easy... there is also something wrong with your value proposition. I am not a buyer of whatever you sell, so having the right value proposition is on you to figure out.
Your Leads are the Wrong People Congratulations, if how much money you throw away was the measure... you're winning! Unfortunately, no amount of unqualified Leads will fix a Conversion problem; instead, it compounds it. This leads us to the real issue.
Your Sales Funnel Sucks The good news is that you are not alone; the bad news is that you are failing to convert 95% of your leads. Effective Sales Funnels are elusive things. This is probably why so much money is shoveled into increasingly wider lead funnels in an attempt to overcome the real problem, but it just masks it at best. Too many people think that their Lead Funnel IS their Sales Funnel, which means they are missing a Funnel.
In most businesses, Marketing, whose job is to create leads, and Sales, whose job is to close them, are related but completely different things. Sure, one thing "should" feed into the other, but the skill to get someone to click on a Google ad, for example, is a different skill than getting that someone to buy. But they are directly related in that the pe
It's Time for a New Services Model for Dynamics 365 and the Power Platform
About seven years ago we pioneered the "Support by Blocks" model, and it has served our Forceworks clients and us well. But thanks to Microsoft, it is time for a whole new model for Dynamics 365 and Power Platform Support and Services. Let's unpack this one.
The Challenge Let's be honest, no business application you can buy will serve your needs as delivered. Any of them will require some modifications to fit your goals. Fortunately, you have many Microsoft Business Applications partners to assist you with this, including my company Forceworks. This is not new; customizing business applications has been around as long as business applications have been around.
For a small organization, you may only have to invest a few bucks to get things where you want; enterprise customers often invest six or seven figures to get things right. It is not a small industry that I am in. It is precisely this high cost that has led Microsoft to invest so much into low-no-code technologies. How many more customers could Microsoft have if this "startup cost" was significantly reduced? More on that in a minute.
Models There are quite a few engagement models available from different partners. The old "Fixed-Price based on your Requirements" has fallen out of favor, and for good reasons. Scope creep is a common one, but customers, thinking that competitive bidding got them the best price were often surprised at how much the bids came in at—typically ranging from 25-50% higher than what Time and Materials may have cost.
Partner risk padding has probably run off many customers, But as I said, few partners even offer this model today. The most prevalent model is the Time and Materials model, which may be based on an estimate. But Scope Creep rears its head just as often there, the difference being that the customer assumes the risk. Still, this usually works out cheaper than what a "Risk-Adjusted" Fixed Price would have been.
Blocks Several years ago, we pioneered a variation on the Time and Materials model called "Support by Blocks". In that model, the customer pre-purchased blocks of time, like 80 hours, for example, for a single blended rate that was discounted for their pre-payment. These hours would be consumed by anyone on our team, developers, analysts, consultants, etc., to meet customer requests until the block was depleted. It was a better model for both the customer and us than traditional Time and Materials and has served us well for many years.
The downside was that some customers became too focused on the hours, often hoarding them to stave off having to buy more. This also meant that they would never reach the full potential of what these solutions could achieve for them. It was understandable but frustrating for me to know what "could be". It often triggered their "we'll take it from here" reflex when a block was depleted. This always meant the end of the line for any hope of exploiting the full potential for their business. They were obliviously missing out on dollars to save pennies.
Is it Time? I have had this idea in my head for many years about an "All-You-Can-Eat" subscription model to eliminate scope and hours from the equation. But to not go broke, you would have to either charge an astronomical amount or exclude the development work. And each time I had looked in the past, there was still way too much development work, relegating any Subscription to just Support. But in the meantime, Microsoft has continued to advance the low-no-code platform, and I was noticing the utilization of our code-writing developers was falling, and developers are some of the highest paid people in a partner organization.
To confirm my thinking, we analyzed our customers over the last 18 months, and sure enough, the level of actual code development had continued to drop. In fact, in the previous 12 months, less than five percent of our customers needed any actual code development at all. Bingo!
"The Works from Forceworks" I could not wait
The Myth of Single Version of the Truth
I've heard this term bandied about for many years now, "Single Version of the Truth". As Jack Nicholson once said, "You can't handle the Truth!" I would paraphrase that as, "You can't afford a Single version of the Truth, and you wouldn't want it anyway!". So, let's see how many of you I can get to agree on this one :).
What is Implied? From a business standpoint, "Single Version of the Truth" or SVT, is often pimped as this utopian idea that all of your data, about everything to do with your customers and your business is in one place. providing the coveted 360-degree customer view. First, no such Utopian application can be subscribed to from anyone on this planet today. However, you can subscribe to several applications and potentially spend an enormous sum of money and time to wire them all together, giving the illusion of a SVT. While some of you might be sad to hear that SVT is not "push-button", I will try to cheer you up by saying you would not want it anyway.
Silos are Bad! Yes, if you read back on my blog, you will see me also preaching that data silos are bad. In fact, I used the same post image for this post. But that was then, and this is now. Back in the days before the Power Platform, when all we had was Dynamics 365, we also sang Microsoft's tune of the time that "You want all of your data in one place", meaning in a Dynamics 365 database.
This was a strong argument for a customer who was considering multiple point solutions made by vendors other than Microsoft. And we had a great deal of success consolidating those multiple point solutions under a single Dynamics 365 umbrella. But to call that a SVT was a stretch. Maybe "Fewer Versions of the Truth" with a 245-degree view of the customer was a more realistic goal, as that was typically the outcome.
Dynamics Silos Even under the Dynamics 365 brand there were, and still are, silos. Dynamics 365 Sales runs on top of Dataverse, while Dynamics 365 Business Central or Dynamics 365 Finance run on their own databases. Dual-write is an ongoing effort to create the SVT illusion.
Power Platform The Power Platform arrived and blew up the whole concept of SVT. Even Microsoft started singing a different tune, promoting their Center of Excellence "COE", so you could more easily manage the possibly thousands of environments (aka Data Silos) that users could now create in your enterprise tenant.
So, is SVT dead? The problem was never with "Point Solutions" and their siloed data, it was with "Point Solutions" and silos from other vendors. With the Power Platform, Microsoft created a rocket engine to crank out "Point Solutions"... but these would be "inside the wall".
Silos are Good! So now let me be my own devil's advocate. I will take our own organization, Forceworks for example.
The Sales side of our business watches over AppSource prospects and website prospects etc. You can probably imagine that with over 50K users of our RapidStartCRM app, that means there were way more prospects than that, who did not move forward. So, we have thousands of prospects and most of these will never amount to anything, of course. Not unlike any other business where the number of prospects is typically exponentially higher than the number of actual customers.
The Services side of our business works with our actual customers, not every RapidStartCRM user becomes a customer. Our customers are organizations who have engaged us to support or customize not only RapidStartCRM, but also Dynamics 365 or anything Power Platform related. So, our Service database is a fraction of the size of our Sales database.
In our case, Sales runs on a customized version of RapidStartCRM in one environment, and Service runs on another customized version of RapidStartCRM in another environment. The rationale? Why should the service team have to navigate around thousands of irrelevant records? If they are not customers, they don't need to be in the Service silo.
But what about Synchronization! Much of "S
Pay as you Go, Go, Go
Microsoft just announced, and released in the next breath, a new Pay as You Go model for Power Apps. This has huge implications for all organizations and also for users of our free RapidStartCRM solution. Let's unpack what it means.
Pay as you go Who doesn't like the idea of only paying for what you use? I wish it applied to more things: "I only ate half of this hamburger, so I'll just you pay half the price", "I only drove my car three days last month, so I'll just pay 10% of my car payment". "I didn't need to see doctor last year, so I won't pay that health insurance bill." Sadly, most things don't work that way, but some do, like gas for your car, electricity in your home, and now... your critical business applications!
What does this mean? This is a new option, in addition to the previous option of licenses. Before, when thinking about users for your applications, you may have pondered whether Sally would use the app often enough to justify paying for a license for her every month. Or those seasonal staffers, or volunteers who use your app sporadically. With this new model, you don't have to think about any of that anymore. You also don't have to worry about getting and assigning new licenses for newly onboarded staff. You just "Share" the app with them.
Cost impacts Basically, in the background Microsoft is watching your app. When Bob signs in and uses it, "cha-ching", Bob is added to your monthly bill. If Bob did not use your app next month, he is not added to your bill for that month. Brilliant! So your monthly bill will go up and down based on how many users used your app in the month. For seasonal staff, maybe you see a cost spike in November, but the cost plummets back down in December for example.
How do you get it? Well... it depends. Many organizations use Azure for various things and have an existing Azure subscription. Many do not. An Azure subscription is required as that is where the Pay as you go mechanics are located. If you do not have one, you can go here and create one with a credit card. Once you have an Azure Pay as you Go subscription established, you won't necessarily need to go back there, it is kind of a one-time step. It should take about 10 minutes.
Environments The next thing you will need to do is decide which environments you want to utilize Pay as you Go for. Then connect those environments to the Azure Pay as you Go subscription. After that you can just share your apps with any users as you do today. But only pay when the apps are used by those users.
Questions Yes this begs more questions than it answers, and some of those details are filtering out as I write this. But I have a feeling this will be a game-changer both for Microsoft and RapidStartCRM customers!
Hit 50K Users? Get ready for the knock-offs.
Shortly after we launched RapidStartCRM back in 2015, a couple of competitors followed us into the emerging space we identified. They are gone now, but new ones occasionally pop up. I hear "imitation is the sincerest form of flattery".
First Mover Advantage As the very first simple-to-use CRM solution built on Microsoft's Business Applications platform, we did have an early advantage. We brought a lot of SMB knowledge to the offering, and SMBs were eating it up. My assumption that there was a market hungry for CRM, but turned off by the complexity of Dynamics 365 or Salesforce.com, proved correct. Even Microsoft was a promotor of RapidStartCRM, seeing it as a path to capture a segment of the market they were never very good at. But the first mover advantage won't carry you forever. While we may be able to forever claim we were the first, it requires ongoing work to continue to claim we are the best.
First Users Advantage Being the first to market is important, but having the first users of a new product, is much more valuable. As an SMB ourselves, we could anticipate many needs for a simple CRM, and we incorporated them into the very first version. But our ability to anticipate needs pales in comparison to actual user feedback. While largely the same application (in appearance) that we launched in 2015, there have been over 25 version updates over those years. Every one of those updates was a direct result of feedback from our growing user base.
I see what you did there When we launched, there was no "AppSource", the best our potential competitors could do was watch one of our videos to try and reverse-engineer what we were doing. A few tried, some even copying and pasting our web copy. I was mostly annoyed at the sheer laziness of their efforts. It's a little different today, our app is now available to anyone via AppSource, and not surprisingly of the competitors I am aware of today, each of them had installed RapidStartCRM in advance of launching their copies. Some have at least attempted to take a slightly different approach, yet others simply came up with a catchy name and are basically trying to replicate what they think we are doing. One even pretended to be a customer and reached out with questions! Even Microsoft closely dissected and reviewed RapidStartCRM as they were developing the "Business Edition", the "never launched" predecessor to the Dynamics 365 Professional offers.
The Missing Link The primary reason we have had so many updates, while our competition seldom gets past their first one, is the over 50,000 users we have on our app. You don't get that many users launching a knockoff with your fingers crossed. Sure our brand recognition for RapidStartCRM is high, but that would not mean anything if the app was not excellent, and continuously updated as new capabilities come out and features are requested, as long as both of those items fit within our mantra of "Simple-to-Use". We closely evaluate any changes, to ensure we don't trip the touchy complexity wire. This is a lesson some of our aspiring competitors should learn as they replicate our concept, but then proceed to add a bunch of crap to it.
Simple isn't Easy You would think that building something simple should be easier than building something advanced... it's not. Even with Microsoft's vast resources, the Dynamics 365 Professional apps that they positioned for SMB, missed the simplicity mark by a mile. The fact that so many SMBs are using the professional apps is a testament more to Microsoft's marketing might, than the apps being appropriate for most of their SMB customers. It's funny how our roles have reversed. When they were first promoting RapidStartCRM it was with an eye towards eventually moving those new customers to Dynamics 365. Instead, many Dynamics 365 customers are moving to RapidStartCRM. Of course I knew this would happen, but I continued to smile as they told me about "their" plans for RapidStartCRM.
It's about the Churn In
Thoughtful and Honest
Steve talks with leaders from industry and adds his his experience to provide a real perspective on what’s upcoming in the industry. I never miss an episode.