CRM leadership: Buying, managing and running a system
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As companies strive to cut costs and operate more efficiently, some are hacking into traditional models for business...
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Consider Atlassian, based in Sydney, Australia, which launched as collaboration software for developers and has expanded to tools for all kinds of teams.
Atlassian has 40,000 customers, but no dedicated sales team. Its philosophy is that if a product is high-quality, well-designed and easy to use, a company doesn't need a sales team. Instead, it can develop online channels of service and build self-service into the product itself to help customers make educated purchases. The idea is to make the business model "automated and low touch," President Jay Simons said. Simons also discussed the importance of putting the customer first, which the company has translated into number three of its five key "values": "Don't f--k the customer."
To that end, Atlassian has fewer than 10 sales roles but more than 500 developers who work on developing and improving the product -- more than half its number of total employees. "An engineer scales better than a quota carrier [a salesperson]," said Simons, who noted that he started his career in sales.
Self-service models may be about more than cost cutting, too. They may just make sense. According to the Harvard Business Review piece "The End of Solution Sales," companies do 60% of product research before ever engaging a vendor. So a self-service model may simply support the future of B2B IT purchasing.
Simons talked with SearchCRM about how his company is hacking into the traditional sales force model, why cloud has become an either/or choice for some software vendors and creating a new way of selling -- and working.
Tell me about your self-service business model.
Jay Simons: Our business model is very automated and low touch. We have 40,000 customers and we don't have a direct sales force. We're the most extreme example of what I refer to as 'inbound sales,' a tweak on HubSpot's 'inbound marketing.'
We focus on generating demand and converting that demand into customers without needing to call customers and sell to them. We do that by being transparent with product, pricing -- we don't discount -- all prices are up on the Web and keep products affordable. And then we focus on self-service at almost every turn, whereas most organizations with a traditional sales force work against self-service. If you have a salesperson, you don't want the customer to be able to buy [the product on his own]. You want to talk to them and create a conversation; you don't share pricing so they have to call you and ask, 'How much does this cost?' That's what you want; more customers calling and asking you questions, and the sales process begins.
We focus on the extreme in enabling customers to buy business software online without having to engage with a human being. We believe more companies should pursue self-service instead of empowering a huge sales force.
Are you self-service only?
Simons: We have a small group of what we call 'enterprise advocates,' who focus on expanding customers that have more than 1,000 active users. Once you use our software in a mission-critical capacity, that group will call into those existing customers and explain that product to them. We just started that in July.
But still, we want to test the human sales model: Is there a way where that doesn't need a human-powered sales effort? We have a control group that we don't allow that team to call into. Instead, we hire a marketer, engineer and say, 'Your job is to convince these customers -- without picking up the phone and talking to them -- to buy the software,' and then we measure the effect of those two.
For traditional companies with a sales organization, they're not trying to test whether there is a better way. They're just trying to scale the sales organization.
Do customers want cloud-based, on-premises or hybrid versions of your software?
Simons: The majority of customers are in the cloud. Larger customers tend to want to have software choose the firewall and smaller ones tend to go to the cloud. If you're bigger, you have an IT department and you have the option to run in your own data center, and they often choose to do so. But increasingly, companies aren't given a choice. If you want a modern CRM, there are few worth using that run behind the firewall.
My personal theory is, if you can have someone else run the software for you and maintain it and update it and that's their specialty, why would you want anything else? I believe that cloud is the future. But the cloud companies spin rhetoric that is skewed. When Salesforce.com first built momentum, they were competing against Siebel. Their pitch was, 'Here is our brand-new, modern CRM, or you can stick with clunky last-generation Siebel technology.'
But there was no slick, behind-the-firewall tech alterative to Salesforce. So it was a false choice; it was, 'I want this new modern thing, and the only way to have it is in the cloud,' so companies went to the cloud.
But for our large customers, there's still a lot of adoption behind the firewall. Source code is something that customers are sensitive about putting beyond their own firewalls.
It's also much easier to customize the software behind the firewall, so they can tweak the products more than in the cloud. But predominantly, it's privacy and security that keeps companies on-premises.
What is your vision for doing business in a different way?
Simons: Everything is open. If you look up our principles, our first principle is 'Open company; no bulls--t.' All our work is open and available. You can meander around our Web and learn how parts of our business are operating. If you work in silos -- where most of your work products are documents sitting in email or secured drives and you work from a 'secure first, then share,' mentality -- I think that is a disadvantage.
Our founders sprang out of the open source movement; it's all about open, collaborative contributions. That's not the way most companies work, but there's an advantage to discovering how to work that way.
How do your products sell themselves to customers?
Simons: The product can walk you through and show you how to use it and accomplish different tasks. And along the way, it will say, 'Hey, Lauren. Let me show you how awesome I am.' By the way, that's what salespeople do. The demo does the same thing.
[The software is] smart enough to ask some basic questions and give you a solid onboarding experience so you get the lay of the land. And then it gets out of your way and lets you decide whether it can do what you need. The product can't spin. It just has to show you what it can do. It can't slick anything up. It either can do what you want or it can't. That's way more convincing for potential buyers.