In Living Proof, I explore real life examples of tech providers who are adapting to the changes we’re observing in technology buyer behaviour and becoming customer-driven organizations.
Is Atlassian the ideal “customer-driven” sales organization? There has been a lot of talk about Atlassian, “the great Australian hope” of technology IPOs and the fact that they have managed to grow to several hundred million in revenues and a customer base of 50,000 organizations without hiring a single sales person. And…they’ve been profitable for the last ten years. That’s pretty impressive when you consider that according to a recent filing with the SEC, Atlassian spent around 25% of revenues on sales and marketing in FY15. Compare that to around 52% by Zendesk (not profitable) and 51% by Salesforce.com (also not profitable) and other “born in the cloud” providers.
So, how does that work? There’s got to be more to it than their infamous “Don’t #@!% The Customer” motto, right?
The reality is more positive than the motto. Atlassian are a great example of the Connected Model at work (Tech Go-to-Market: The Connected Model Is the Key to Sales Success). The idea is that to remain competitive, vendors must connect customers to the products and buying experience they want. That the customer experience is integral to the product.
The Gartner Connected Model
Atlassian get this. In the same filing, they explain, ““Traditional enterprise software distribution models, with their focus on quota-driven sales representatives and reliance on large deals, are not well suited to reach, influence or meet the needs of teams, who are increasingly driving technology purchasing decisions.” Which is a lot like what we’ve been saying in our Future of IT Sales research. Atlassian have adopted a consumer-style approach to sales. It is all online, extremely easy to demo – to try for free. Their products also have a familiar, consumer-like pricing model, and their terms are clear and transparent – and all available on the website. They keep it simple. One of the founders, Scott Farquhar has been quoted as saying that they purposefully decline to make exceptions to the contracting terms or price, so as not to waste money on legal.[i]
But they also say “We founded our company on the premise that great products could sell themselves”. In my mind, just as there is “a great woman behind every great man” (replace genders as you will), behind every successful “build it and they will come” story there is a broader, more “connected” view of product. So, in other words, you’ve got to do more than just build it.
Atlassian have done well early on selling a strong product that addressed a gap in the market to a very specific target audience, who if not born in the cloud, certainly live in it now. In reality, while they have done well with their “viral sales” approach, they have also invested smartly to understand the market, to create a thriving community of user/advocates, and they still spend a lot on marketing. In fact, their investments in marketing have ramped up considerably in the last year or so. To make their approach work, the customer’s whole experience of Atlassian has to be flawless through every stage of their customer journey with them – exploration (discoverable through networks, on the web, in communities), evaluation (advisors, demos), engagement (easy to contract) and most importantly in experience (life after the sale). From that perspective, Atlassian seems to have a deep understanding of what it is to be a customer-driven sales organization – they are all in sales.
[i] Forbes.com (June 14, 2011) http://www.forbes.com/sites/tomtaulli/2011/06/14/atlassian-100m-business-with-no-sales-people/
Note: This is not in any way intended to be taken as investment advice, and I don’t have any financial interest in or relationship with Atlassian.