Nonprofit-Cloud-Consultant pdf - Salesforce Certified Nonprofit Cloud Consultant Updated: 2024

In today’s business world, using a top CRM software is no longer optional; it’s critical for success. A good customer relationship management (CRM) software will help you expedite your business growth by streamlining your workflows, boosting sales and improving customer engagement.

However, given the plethora of options available, choosing the right tool can be hard. In this article, we will dive into a detailed comparison of two popular CRM platforms, which we’ve covered extensively in our Salesforce CRM review and monday Sales CRM review. This guide offers helpful insights so you can make an informed choice that best suits your business needs.

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This year did not start off great for Salesforce, with an unusual level of turbulence and uncertainty surrounding the company. But as the year comes to a close, Salesforce finds itself in surprisingly good shape financially: Its stock is up over 96% year-to-date. Earlier this year, such an outcome would have seemed impossible to imagine.

The bad news started rolling in even before the new year began, when co-CEO Bret Taylor, who many speculated was being groomed to be heir apparent to Marc Benioff, quite suddenly announced he was leaving the company at the end of November. A week later, Slack CEO and co-founder Stewart Butterfield announced he, too, was stepping down. Losing two key executives in less than a week would be a huge hit to any company, but it would be just the start of an onslaught of bad news for the CRM giant.

As the year began, we learned that activist investors were, well, quite active inside the company. This included Elliott Management, Starboard Value, ValueAct Capital, Inclusive Capital and Third Point. When activists show up, they usually have a strong opinion on how to “fix” a company, and this would be no different.

First, we learned that Salesforce was bringing in three new board members, which felt like a way to appease the activists — especially because one of them was Mason Morfit, CEO and chief investment officer of ValueAct, one of those very same activists.

Activists typically pressure the company to cut costs, and in corporate terms, that usually means cutting staff. Sure enough, Salesforce soon announced that it was cutting 10% of its workforce, or 7,000 people, on January 4, 2023. The excuse was that it had overhired during the pandemic and this was a correction, but it could also have been throwing the activists a cost-cutting bone.

Either way, reports suggested the company didn’t handle the layoffs well, engineers were being pressured, and Benioff began preaching about going back to the office after embracing work from home, and what Salesforce called the “Digital HQ,” during the pandemic. The company’s reputation as a progressive, employee-friendly organization took a big hit.

While Salesforce has many different products with pricing structures that often require a quote from the company, we’ve compiled the basic pricing for their sales CRM only.

It should be noted that the pricing is the same no matter how large your business is, but Salesforce markets a small business plan for each of its three main products of Sales, Service and Pardot. The prices are listed by Salesforce as being the same as they are listed for larger businesses. Their small business offering is more of a summary of what they recommend for businesses with smaller teams and less-needed accounts.

As you can see in the table above, as you scale up your pricing plan you’ll be able to get access to more rich features meant for larger or scaling businesses. The Starter Suite plan should be great for most small businesses with fewer than five sales team members, unless you are looking for something with accurate sales forecasting.

Features of Salesforce CRM

As you grow your business, you’ll be able to take advantage of the more advanced features like workflow automation. All businesses will have sales team members with a lot to juggle who can benefit from this. But more importantly, the larger your team is, the more automation you’ll need to make sure all processes are the same and tie back into your analytics correctly.

Your team will get access to the Salesforce mobile app no matter what plan you choose, which allows you to input data on any lead right from your phone. You’ll also be able to check any information you need as you’re on the go attempting to sell in person. It’s a great time-saver to help your sales team take their customer relationships to the next level.

If you’re looking for advanced developer tools, such as a sandbox or the ability to add custom applications, then you’ll want to check with your dev team for their specific needs. Some of these tools are unlocked with the Professional plan but most do not become available until you pay for Enterprise.

Finally, no matter what plan you choose, you can use Salesforce with any major email provider as you’ll be able to integrate your Gmail or Outlook service directly into the platform. This is a huge time-saver as you’re communicating either via cold reach out or a back-and-forth with your leads.

Featured Partners

Starting Price

Free; $8 per user per month for basic features

Starting Price

Free; $20 per user per month (billed annually)

Starting Price

$14.90 per user per month

Salesforce offers a full suite of add-ons available mainly on the SalesForce AppExchange. These optional Salesforce programs include tools to support different needs and industries. Depending on the complexity of those needs, you’ll pay anywhere from nothing to hundreds of dollars for one (or multiple) apps. You can also find add-ons under the “products” tab on the Salesforce website.

Salesforce’s apps come from both first- and third-party providers. They also vary in pricing, often including new tiers that differ from what Salesforce offers. Simple apps, like 360 SMS, start at $7 per month but might cost more depending on how many texts you send. Other apps, like the Salesforce Adoption Dashboard, are entirely free. You also have freemium apps, like JotForm, which are free for the first five forms. 

Each app is different, requiring another knowledge base to learn this optional system. Much like shopping for CRM systems, you must go through testing and adoption phases. Thankfully, Salesforce is a cloud-based SaaS system, meaning you can easily customize it according to your needs. Below, you’ll learn more about some of the most popular add-ons you might consider. 

Pardot Pricing

Salesforce Pardot is a popular marketing automation platform that comes in four tiers. Here’s a breakdown of what those tiers provide:

• Growth: $1,250/mo; focuses on marketing automation 
• Plus: $2,750/mo; provides deeper analytics and personalization features
• Advanced: $4,400/mo; AI support and developer sandbox features
• Premium: $15,000/mo; offers predictive analytics and personalized product support

Pardot supports up to 10,000 contacts, with its higher tier supporting 75,000.

Service Cloud

Service Cloud focuses on the customer support side of Salesforce. It also has identical pricing compared to Sales Cloud (Salesforce’s primary offering). Here’s a breakdown of pricing:

• Starter: $25/user/mo; provides a simple customer case management dashboard
• Professional: $80/user/mo; provides case swarming and computer telephony integration (CTI)
• Enterprise: $165/user/mo; provides AI features and a self-service system for your customer support staff
• Unlimited: $330/user/mo; 24/7 support alongside AI-powered chatbots
• Unlimited+: $500/user/mo; advanced AI support and the ability to better integrate data across Tableau Analytics and Data Cloud

Sales Cloud does not come with Service Cloud. However, you can discuss discounts for integrating both when talking with an account executive. 

CPQ and Billing

Both CPQ and Billing are features you can find under Salesforce’s Revenue Cloud service. 

CPQ (Configuration, Pricing and Quoting) is a flexible pricing system that changes price depending on usage level or optional features. When selling software with add-ons, it can help you simplify billing customers. It comes in two forms:

• CPQ: $75/user/mo; provides limited customization options
• CPQ Plus: $150/user/mo; provides more process control and automated features

Billing is another feature of Revenue Cloud which comes in two forms, although the pricing requires you to call in:

• Growth: Has a built-in invoicing system for scheduling and merging multiple invoices
• Plus: Advanced billing systems based on usage ratings; supports automatic payments

If purchasing the complete sales CRM, some of these features are integrated with advanced plans, meaning you don’t need to pay extra. 

Einstein Analytics

Einstein Analytics is the AI-driven analytics software from Salesforce that comes with the Unlimited plan. Enterprise customers might choose to pay separately, selecting one of the four plans below:

• Einstein Predictions: $75/user/mo; provides simple, automated insights
• CRM Analytics Growth: $140/user/mo; more advanced analytics platform without AI features
• CRM Analytics Plus: $165/user/mo; combines features from Predictions and Analytics Growth
• Revenue Intelligence: $220/user/mo; provides revenue insights as well other features

MuleSoft

MuleSoft is an integration-based platform that connects multiple apps, helps integrate numerous APIs and provides automated systems between those softwares. Another way to look at it: it’s a complex version of Zapier with way more power for programmers. 

MuleSoft’s pricing varies heavily but can cost up to $250,000 per year. You’ll need to call and discuss your unique needs for a quote. 

Salesforce, Inc. (NYSE:CRM) stock has maintained gains from its latest post-earnings surge following delivery of an impressive cost-cutting campaign without compromising significantly on its business growth prospects. The consistent fundamental improvements observed in accurate quarters imply that Salesforce is establishing a value proposition to its AI strategy. While we had previously feared that AI democratization would dilute Salesforce’s market share in customer relationship management (“CRM”) software, the company has instead continued to reinforce its grip in the industry by ramping deployment of newly introduced value-add features. These include the Einstein Trust Layer and an integrated Data Cloud to better facilitate customers’ existing CRM needs in the AI era. The effectiveness of Salesforce’s emerging AI strategy is corroborated by stabilizing growth in the low double-digit percentage range during accurate quarters following a period of steep deceleration last year due to the cyclical downturn in enterprise IT spending.

The company’s increasing utilization of self-service sales channels where application, as observed through its accurate partnership with Amazon Web Services Marketplace (AMZN), also marks a key approach for reducing marketing and sales costs – the largest portion of its operating expenses. This permits the reallocation of resources to funding growth investments, particularly Salesforce’s AI CRM strategy, which management views as the priority to stay economically and technologically competitive.

Looking ahead, we would expect further cost improvements at Salesforce heading into fiscal 2025, as new developments introduced in the current year – including Einstein GPT, Einstein Trust Layer, and other features/bundles associated with the ramp of Data Cloud offerings – continues to scale. And this will likely become the key compensating factor to Salesforce’s new normal of maturing growth in its core Sales and Service Cloud offerings.

Value Proposition in AI CRM

The deceleration in Salesforce’s core Sales and Service Cloud sales have stabilized in accurate quarters, which corroborates increasing uptake in recently introduced AI CRM features, including Einstein. The incremental advancements made to the Data Cloud in accurate quarters is likely bolstering adjacent demand as well by addressing customers’ increasing need for an integrated data strategy supportive of their respective AI strategies.

As discussed in our previous coverage, Salesforce’s newly introduced slate of Einstein GPT solutions integrated across its key analytics, productivity, and PaaS offerings have been key to its AI CRM strategy. While Einstein GPT-enabled applications offered by Salesforce primarily relies on third-party technology (i.e., OpenAI’s GPT model), the company has sought to boast its unique value proposition through the Einstein GPT Trust Layer. The Trust Layer effectively addresses enterprise data security needs in the process of adopting emerging generative AI technologies, while also catering to industry’s ongoing cost and performance optimization demands.

Specifically, the company’s proprietary Einstein Trust Layer allows customers to build their respective generative AI-enabled CRM solutions on Salesforce’s platforms without the need to move or store their data within the model, thus enabling a “secure and trusted” experience critical to the enterprise environment. With the Einstein Trust Layer having only recently entered general availability (“GA”) in October, we expect ensuing demand to have an improved impact in sustaining the company’s overall sales growth heading into fiscal 2025.

And to better Strengthen user experience and cost effectiveness in customers’ transition to AI CRM software, Salesforce has introduced a slate of advancements to its Data Cloud and Einstein offerings, including the latest “Einstein 1 Platform.” The Einstein 1 Platform essentially takes Data Cloud integration to AI-enabled CRM solutions offered through Sales and Service Cloud to the next mile by allowing integration of customers’ data into models for building generative AI applications via a simplified low-code process. This feature is realized through the unification of disparate data sources within the Data Cloud for customers, enabling a “common language” that allows different applications built on Salesforce Platforms to communicate and interact with one another, and create value for customers.

The introduction of Einstein 1 Platform and its integration with Data Cloud effectively enhances workplace productivity, while also improving costs and reducing time to deployment for customers. The value proposition directly addresses the ongoing call for cloud spend optimization in the industry, while also catering to customers’ increasingly urgent need for the scalable adoption of AI solutions to maintain economic and technical competence, thus reinforcing demand for Salesforce’s CRM solutions.

In addition to the Einstein 1 Platform, the recently introduced Einstein Copilot AI assistant and Einstein Copilot Studio AI app builder offerings currently in pilot phase are also experiencing strong uptake amongst customers, which is corroborative of growing momentum in Salesforce’s AI CRM strategy. In the latest earnings call, management has reported a 17% adoption rate for Einstein Copilot amongst the Fortune 100 during the current pilot go-to-market phase, which underscores significant headroom for incremental adoption. Both features are also reliant on integration with Data Cloud, underscoring the critical role of the platform’s advancements in supporting CRM experiences in the AI-first environment.

More importantly, the Data Cloud is now offered at no additional charge for all Enterprise Edition+ customers, which helps to Strengthen the exposure of Salesforce’s growing slate of AI CRM offerings to customers, and reinforces its prospects in capturing related opportunities. This is consistent with progress made in Salesforce’s improved product bundling strategy in accurate quarters following the announcement of price increases during the summer, which management expects to impact new and upcoming contract renewals that will have a gradual impact on growth over the next three years.

In addition to Data Cloud’s availability through Enterprise Edition+ (“EE+”), Salesforce has also included its Einstein GPT-enabled CRM apps through its priciest Unlimited Enterprise+ (“UE+”) premium tier. With the rolling GA of recently introduced Einstein GPT apps, management has specified improved adoption rates on the UE+ tier during the fiscal third quarter. This effectively reinforces prospects of growth in multi-cloud deals and longer-term pricing gains at Salesforce, as up-tiered UE+ customers have already been observed to increase their spend on the platform by more than 70%. Taken together, Salesforce’s AI CRM strategy continues to deliver consistent positive progress supportive of sustaining normalized growth in the double-digit percentage range over the longer term, even as cost-cutting efforts continue.

Cutting Where it Matters Most

Meanwhile, Salesforce has also continued to deliver on its commitment to reducing costs and enabling a sustained pace of profitable growth. Management’s raised guidance for full year operating margins – even after an 800 bps y/y improvement – and cash flows, while maintaining a stabilizing pace of growth in accurate quarters, effectively assuages investors’ concerns that ongoing cost-cutting efforts will “come at the expense of revenue growth.” The nimble balance between cost reductions and sustained growth is further observed through Salesforce’s revamped go-to-market strategy. In addition to significant headcount reductions across the board this year, Salesforce is further drilling into reducing marketing and sales expenses – its largest operating cost center – through the reliance on channel sales partners.

This includes the company’s recently announced availability of its CRM applications, as well as data analytics and productivity solutions like Tableau and MuleSoft on AWS Marketplace. Salesforce’s newly announced go-to-market strategy through AWS Marketplace will be key to further reducing its marketing and sales costs, as it encourages a greater volume of self-serve deployments of its offerings across customers. It will also help to address customers’ cost and time to deployment optimization needs by allowing seamless integration of AWS data into Salesforce products purchased through Marketplace.

Meanwhile, the partnership is expected to reinforce Salesforce’s exposure to AI CRM opportunities by leveraging AWS’ massive reach into the enterprise segment. Specifically, AWS is currently the leading primary cloud service provider, commanding about a third of the market share. Approximately 30% of large enterprises generating annual revenue of more than $5 billion, and about 60% of cloud needs across medium-sized enterprises with annual revenue between $1 billion and $5 billion uses AWS as their primary cloud service provider, which complements Salesforce’s aspirations to further its reach into AI CRM opportunities.

The combination of reduced sales and marketing outlays and expanded market reach enabled by the partnership with AWS Marketplace underscores an effective strategy for Salesforce to further Strengthen profit margins without compromising on revenue growth. It also paves way for additional channel sales partnerships with other major hyperscalers, including Microsoft Azure (MSFT) and Google Cloud Platform (GOOG, GOOGL), in the future, which would reinforce Salesforce’s market share gains in AI CRM opportunities ahead.

Fundamental and Valuation Considerations

The combination of a unique value proposition in enterprise CRM software through Salesforce’s proprietary Einstein AI offerings, alongside seamless integration of Data Cloud continues to reinforce the company’s moat in the industry. Meanwhile, increasing reliance on a self-serve go-to-market strategy via hyperscaler partnerships where applicable also mitigates Salesforce’s exposure to both macroeconomic and optimization headwinds by addressing customers’ efficiency needs, while also optimizing its marketing and sales efforts. The combination will be key to sustaining Salesforce’s current pace of likely normalized, albeit slower, growth going forward, and complement the growing impact of accurate price hikes on services provided over the next three-year horizon as expected by management.

Meanwhile, the stabilizing growth set-up will likely compel a continued market focus on Salesforce’s margin expansion and cash flow prospects. We believe there is incremental room for further reduction in Salesforce’s marketing and sales costs, particularly as management expects greater reliance on channel sales. The newly introduced AI CRM offerings are also expected to scale and Strengthen overall operating leverage.

However, we remain cautious of execution risks over the longer term – specifically, Salesforce’s aggressive cost-cutting efforts need to be a balanced endeavor to prevent erosion of its future growth prospects. Despite secular tailwinds to its AI CRM strategy, and Salesforce’s increasing role as the standardized enterprise CRM solution provider, the company has yet to demonstrate an ability in driving value accretive gains supportive of growth reacceleration, nor structural advantages in preserving its market share leadership against disruption from competitors – including Microsoft’s accurate deployment of generative AI-enabled Sales Copilot software aimed at taking share from the CRM market.

Taken together, our forecast expects Salesforce’s growth prospects to stabilize at a 12% five-year CAGR, with limited room for significant growth reacceleration in subscription and support revenues. Specifically, anticipated momentum in Data Cloud uptake is expected to complement demand for AI CRM solutions offered across the Sales and Service Clouds, and offset maturing growth in legacy solutions within Salesforce’s “highest grossing” segments.

Meanwhile, our forecast estimates further expansion of GAAP operating margin over the next five years. In the upcoming quarter alone, even based on Salesforce's lower range revenue guidance, the company is well-positioned for another EPS beat of as much as $0.20 like it did in Q3. This is expected to be primarily driven by the continued scale of rolling GA on recently introduced AI CRM solutions, as well as incremental cost reductions stemming from greater reliance on self-service purchases and other sales optimizing efforts. The undertakes are expected to at least maintain the cost structure and profit margins observed in Q3 and potentially take Salesforce's EPS beyond $1.40 in the current quarter, compared to management's guide at the $1.20-level.

Salesforce_-_Forecasted_Financial_Information.pdf

As a result of our latest adjustments to Salesforce’s fundamental forecast based on its accurate performance and forward prospects as discussed in the foregoing analysis, we are upping our price target for the stock to $249.

The price target is derived using the discounted cash flow (“DCF”) approach, which considers cash flow projections taken in conjunction with the foregoing fundamental analysis on Salesforce. The upward revised price target is primarily the result of Salesforce’s continued cash flow growth outperformance realized through its sustained pace of profitable growth observed in accurate quarters, which offsets conservatism over the forward normalized risk-free rate environment.

Specifically, our analysis applies an estimated perpetual growth rate of 7% on projected fiscal 2028 EBITDA. The perpetual growth assumption applied is equivalent to 2% on projected fiscal 2033 EBITDA when Salesforce’s growth profile is expected to normalize in line with the pace of estimated economic expansion across its core operating regions.

Our analysis also assumes an 11% WACC in line with Salesforce’s risk profile and capital structure relative to the anticipated normalized risk-free rate of 4.5% considering the “higher for longer” monetary policy stance. Despite our optimism for another round of earnings beat in Q4, we remain cautious of the uncertain interest rate backdrop in the near-term, which continues to serve as a key roadblock to unlocking pent-up value in the Salesforce stock.

Final Thoughts

Salesforce’s continued realization of cost-savings without compromising on its accurate growth trajectory remains a bright spot. The achievement continues to bolster returning market confidence in Salesforce’s ability to sustain a normalized pace of growth at current levels, supported by improving demand for its proprietary AI CRM offerings. The results have also demonstrated Salesforce’s ability to effectively mitigate against market share dilution risks given the increasing democratization of AI access across the broader software industry, which helps to preserve its moat as the standard enterprise CRM solution provider.

Despite significant growth deceleration from its heyday, Salesforce’s continued margin expansion and cash flow growth efforts will remain a key focus area for investors and upside driver for the stock. However, from a valuation perspective, we believe the stock's fundamental-driven upsides continue to be impacted from broader market risks in the near-term. We believe this could potentially harbinger a compelling buy opportunity in the next 12 months to optimize participation in Salesforce's longer-term upside potential realizable through its improving cash flows.