Remember To Make It Easy To Buy: oh, yes, I agree with the points Rob Di Marco raised in his recent article – but I’m also surprised. Rob discusses Atlassian, makers of the excellent bug tracking software Jira and the enterprise wiki software Confluence as a company not easy to buy from. I’ve often been citing Atlassian as a showcase for making lightweight software, that’s easy to understand, use and buy – what have I missed?
For one, Rob would like Atlassian’s help with ROI calculations to justify the purchase, and he my not have to wait long, as in a comment to his post, Atlassian embraced the idea. Kudos to them, that’s the level of responsiveness they are known for. But Rob has another concern: payment method. Atlassian’s preferred payment is by credit card: they really want customers to find them, try the products, then just pull out the card an purchase it. Works very well at a certain price range, as one of their former competitors said: expensable, not approvable. (Rod Boothby calls it taxi fare pricing.)
Confluence, Atlassian’s wiki may just borderline fit this range, but their other popular product, Jira starts at $$250/ months for 5 developers, or 1200 a year license – certainly outside the taxi-fare range. At that point approvals are required, and once it’s in purchasing channels, most companies prefer purchase orders:
The point is that Atlassian has done a great job in getting users aware of their quality product, but they ignore the organizational process by which their customers buy. I am confident that Atlassian is losing sales not because of their product but because it is such a pain in the ass for a developer to figure out how to justify and how to actually purchase their product.
Scott Farquhar, Atlassian’s Co-Founder, Co-CEO explains:
In order to keep our pricing down, we do a number of things that aren’t traditional… We sell our products into 106 countries (at last count), and offering POs to all our customers would mean that we would have to chase payment in 106 countries.
POs would mean we would have to employ someone in each timezone to chase payments around the world. This isn’t a particularly fulfilling job, and we strive to have all our staff in fulfilling jobs.
So Atlassian wants to be a cool company with great products (Scott actually uses the term kick-ass products) and happy customers. Their employees are mostly developers, customer advocates, marketing types .. in that order. What’s missing? General business administration – and the try to keep it that way. Do they lose potential customers? Possibly…but is that a problem? They essentially picked their ideal customer profile, serve them, and don’t worry about others. Is this arrogance, or just doing smart business?
Let’s look at another case study.
The CEO of a very successful company that provides Web based tools to small businesses told me how he plans to re-allocate his marketing spend. They’ve made all the right moves to establish a good brand, have a fairly large, growing and loyal user base. However, their key target market is not the TechCrunch 53,651 (even if it’s 1M now), but the tens of millions of small businesses in the real world, outside the Tech echo-chamber. This much larger customer base can be reached via more traditional methods, through trade associations, vertical trade shows, magazine (paper!!!) ads, printed brochures, partnerships. Printed Brochures… OMG – the last time I touched those was in the 80’s
But joke apart, while the CEO clearly sees where the bulk of his potential market is, I disagree with the more traditional (and expensive) approach. Who says he has to cover the entire market all at once? By virtue of what he offers, the initial customers will be the more web-savvy small businesses, and there are a few millions of them. Why not just go for the low-hanging fruit first, that are easier to reach directly via the Internet (one of the beauties of the SaaS model), strengthen their brand and reputation, turn happy customers into advocates, and leave the hard-to-reach prospects for a much later stage in the company’s development?
I’ve presented two cases, one for internal reasons, the other for market realities, but they have one thing in common: they both have to decide if they are on a mission to serve their entire potential target market, or whether they cater for those that are convenient to reach for one reason or another.
What do you think? Is choosing your customers a sign of arrogance, or smart business?