Image Courtesy Ron Mader of Flickr under Creative Commons
Peruse the job listings page
of a Series B enterprise start-up and you will see that a majority of the
listings are ear-marked towards building out the direct sales team. And why
not? The conventional and classic thinking such as in the timeless "Crossing the Chasm" advocates for a direct sales model as there is a need to
explain the benefits of the new technology to customers.
Recently, the success of enterprise customer acquisition at Slack without an apparently traditional direct
salesforce has caused jaws to drop and has fueled much discussion. Is this a
new low cost pathway to market for a new technology company selling to the
enterprise? Atlassian is another company called out as another proof point for enterprise
traction without a direct sales team. Certainly, even for Slack, there is a
deal size and complexity of deployment where an enterprise specific offering
and sales team is necessary. But can this base level of low cost customer
acquisition success be replicated? What are the ingredients of Slack's success?
Established
User Preference There needs to be a support base of users familiar
with the technology already present in the target customer base. These are
usually in Line of Business or individual users rather than Central IT. Preference can be achieved through two experiential
mechanisms. One, through free trials and freemium versions of the product. Another
way to establish this user preference is through consumerization - Where users
can experience a version of the product in their personal lives as consumers.
From there, this familiarity with the consumer version is translated into
preference for the enterprise version or for bringing the consumer product into
the workplace for its proven utility. These users inside the target customer
base are a powerful influencer to the
Central IT function through their word-of-mouth activity. In effect, the familiar users are acting as 'internal'
sales and thus deferring the need for sales until the product is needed for more
complex needs.
Pricing The
price point needs to be low enough to be 'under the radar' as larger deals invoke budgetary commitments,
approval cycles and multiple stakeholder involvement. The pricing should also
have a level of assurance around being able to detach from the product if the
value is not perceived by the customer. Slack has taken this one level further
by offering pricing relief for inactive users which removes a barrier to adoption - yet another incentive to get started. Last, pricing should also be easy to find and
understand. Too often, enterprise sales pricing requires a custom and high touch engagement with sales.
Ease
of product acquisition and usage The product should be easy
to acquire such as through a web channel and it should fit the buyer's process
needs for vendor qualification, IP protection, security reviews etc. The
product should be easy to use. No manuals, no on-boarding steps, no detailed training.
Marketing In
the absence of a direct sales team calling on the customer, how will customers
find you and how will they learn about your product? Content marketing, inbound marketing are some manifestations of this important need.
Usage Insights Without a direct sales team engaging with the customer to gather insights on usage, the product should have the capability to gather usage insights through instrumentation, call-home, self-healing, telemetry and other similar methods.
Time
pattern of customer acquisition Without a direct sales team
to pull in end of quarter sales, the time pattern of customer acquisition won't
allow for easily meeting the pressures of quarterly revenue targets and the
rigors of quarterly reporting that public companies go through. Promotions and
other approaches can help but this model is more ideal for private companies.
It is not the case that a
sales team is redundant in the context of this new 'Slack' model. Rather, the efforts of an
enterprise sales team are being shared by a number of other entities such as
users who take on the role of advocacy, marketing that drives an increasing
amount of education, customer service advocates who drive absorption and resolution
of customer issues.
Putting these ingredients
together - especially the established user base - is a tall order. Few
companies can replicate this model. However, given the impressive gains Slack
has demonstrated, it is well worth the effort to re-create the magic.
