In the enterprise software industry, Tzuo talks about how there has been a shift from the "field-sales" model, where traditional sales representatives win deals from big customers, to a "two-tier-sales" model. This is fueled by customers coming to the website rather than the sales representatives approaching them, creating a need for another tier of sales people to serve as telesales representatives.
Tzuo talks about a methodology used for designing complex products. It involves creating a layered application with dummy samples. The first layer is intuitive and simple. As the layers are peeled, functionality and complexity increase. The customers can choose the degree to which they remove the peels.
With increasingly demanding 21st century customers, Tzuo believes that it is important to provide them with a free trial of the product. This implies that one has to serve the customers even before they have committed, despite resistance from the sales representatives.
Tien Tzuo, Chief Strategy Officer for Salesforce.com, believes that investments are shifting from direct-marketing campaigns to online marketing. Customer awareness is created through buzz, PR and dialogues in the marketplace rather than spending a great deal on advertising.
In the internet business, the threat from competitors for small and mid-sized organizations is very high, says Tzuo. For this reason, companies like Salesforce.com define the battlefield by not competing with big names. Instead, they cooperate with them to build barriers to entry by investing in technology. Acquiring the right talent from the industry further strengthens these barriers, he adds.
Tzuo believes that as a company grows in revenue and complexity, it is important to have a metrics driven sales model. Factors such as the number of people visiting the company's website, effectiveness of search engine marketing, qualification rates, close rates and average size of deals are all important metrics which help in building a baseline. Tweaking these metrics can improve results and lead to a deeper understanding of the market, he adds.
Tzuo explains that with a free trial product model, a high percentage of customers don't end up buying the product. However, it is still important to provide post sales service. A good point of sustainability is when customers have been using the product for some time and it is difficult to unplug them from it, he says.
Tzuo talks about how despite the importance of traditional events diminishing with the creation of an online experience, there is still a human factor involved in the customer's decision-making process. They want to see the product, interact with sales reps and talk to other customers. Creating this experience is important for any software company, he adds.