Zoom is one of the leading videoconferencing platforms in the market — and one of the most successful. But it recently made a decision that could significantly damage sales going forward.
Zoom publicly indicated that work-from-home is not working for the company (hat tip to Business Insider for the initial report), which is pretty much like a car company telling its employees to take public transportation. It is a clear indicator that the company’s software not only doesn’t make work-from-home viable, it never will. That’s likely to reduce the total available market (TAM) significantly, given that work-from-home-policies have been fueling videoconferencing sales in recent years.
It seems as if videoconferencing systems are faltering again, and Zoom’s decision to force employees back to the office might well doom the company in the long term.
How a CEO’s decisions can adversely hit sales
I have seen this happen before. I was at IBM working in its then-telecom division (ROLM) on pricing and discovered that IBM divisions were not buying our own product — it was too expensive. If you can’t justify the price of your own product at cost, you certainly can’t justify it at retail. Every time an IBM division deployed a non-IBM solution, IT noticed — and the decision to save a few bucks did tremendous damage to sales once customers found out IBM didn’t even buy its own products.
Another example involved GM, where the then-CEO looked out into the parking lot and discovered that most employees bought Toyotas. Rather than finding out why, he indicated that employees who continued to do so would be fired. (Steve Ballmer did something similar during the Microsoft Zune/Apple iPod rivalry.)
What both CEOs should have done is understand why these decisions were made (even though employees could buy at discounted prices) rather than ignoring the problem or, as the GM and Microsoft CEOs did, cover it up internally. GM had a massive quality problem that needed addressing Microsoft had under-executed on its stated strategy. In both cases, the decisions got out, and those who heard about them avoided both product lines.
Why would you buy something at retail that a company or its employees won’t use themselves at a cheaper price?
The same is true with Zoom. If you run a company and you want employees to be able to work remotely, why would you buy a work-from-home tool from a company that does not believe the same thing?
Tactical vs. strategic mixed messages
Having employees come back into offices might fix the tactical management problem of motivating and managing people remotely. But it creates a strategic problem: it makes what the company sells look inadequate to the work-from-home task (especially if competitors continue to support remote work). Were I still a marketing director and working for one of Zoom’s competitors, I’d build a displacement campaign around Zoom’s decision and point out that my product…
2023-08-13 00:48:02
Link from www.computerworld.com rnrn