Earlier this week we reported that Zoho CRM has launced Zwitch, an aggressive marketing campaign directed at Salesforce.com’s clients to encourage them to migrate to Zoho CRM’s platform, promising them 80% savings in CRM-costs.

To follow up the story, we asked Zoho Director of Marketing Rodrigo Vaca (follow him on Twitter) to shed some light on the background of Zwitch. Although he refused to give us the exact number of customers Zoho has successfully lured since the campaign went live on July 21, the director assured us that Zoho has “aggressive investment and growth plans for the CRM arena”.

• What makes Salesforce clients so special that a dedicated program was designed to lure them to Zoho’s platform?
  
• From our point of view, two things make Salesforce customers ’special’ for this kind of a program. Firstly that they are already familiar with the SaaS model, and most importantly that they are paying an exorbitant amount of money for functionality they could get at a much better value.
  When you look at Salesforce’s installed base, their customers spend on average north of $18,000 a year on their CRM with Salesforce. In these uncertain financial times, we know they can get a much better deal: not only get a better price, but the same functionality and even more.

• Do you plan to go on designing similar programs targeting other CRM providers’ client base? If public, who’s next?
• Sure, we plan to do this in the future as well – not only Salesforce in the CRM space and not only for CRM – but for other Zoho products in general as well.

• How many new clients do you expect from the Zwitch program? Now that the program is live for more than a week, does Zwitch seem to meet the expectations?
• We are so far pleased with the performance. But remember our Zwitch program is of course a means to the end, not the end itself.

• The comparison highlighted in the press release compares Zoho’s Professional Edition with Salesforce’s Professional package. Are the two packages 100% equal in functionality?
• We believe that for the most part, both editions equally address the CRM needs customers have.

• Is Zoho CRM able to provide all the functionality offered by higher level Salesforce packages? Is Zoho’s Enterprise package equal to Salesforce’s Enterprise package? What about Salesforce.com’s Unlimited package?
• It is dangerous to compare based solely on names. That’s why we invite our customers to make a list of the current, and potential future requirements, and then see what edition fits them the best. But perhaps the most important part is: what good is it to have the most obscure CRM report, when you’re not covering in the basics?
  The recent Zoho CRM + Mail integration demonstrates this well. Not every salesperson has the need for complex bells and whistles that high-end (read: expensive) CRM providers offer to justify their prices, but every salesperson out there needs to have a easy-to-use CRM+Mail integration story.

• Do you consider individual pricing, individual product development or customization when talking to potential new clients, who came from Salesforce?
• Our CRM product directly addresses the needs that most customers have when “zwitching” from Salesforce.com. We also have a network of CRM professionals who provide customization services for those customers that might need some help. That said, we pride ourselves in being flexible and striving to meet our customers’ needs.

• How high is Zoho CRM priorized among other Zoho products concerning development?
• Right at the top. CRM is a very important space for us. Zoho CRM is one of our products with the most history and where we have invested the most for a long time. It also generates a big percentage of our revenue. You can be sure we are fully committed to the CRM space.
  

Earlier: Zwitch: Zoho luring Salesforce clients full throttle

Although the CRM sector, and, hosted CRM services are reported to grow for the fifth consecutive years, despite all financial difficulties elsewhere (well, almost everywhere), competition amongst CRM service providers appear to get harsher and harsher as time goes by.

The above is especially true for smaller companies, as they need rather aggressive marketing (dynamic, and to the point as they usually put it), to stay in the ring. With its latest, Zwitch campaign, Zoho appears to be a poster child of aggressively expanding and rapidly growing companies, albeit Zoho is not so tiny anymore: its office suit has reached its landmark one millionth user more than a year ago.

Although Zoho might not be a newbie with its office suite applications, its ~380k unique visitors in May, 2009 make Salesforce look like a real CRM behemoth with its ~1.1m uniques (both figures are based on compete.com data). Especially considering that, CRM is just a very tiny part of Zoho’s application package, which includes a project manager, a calendar, an email, a wiki interface and many other features.

Okay, so, what’s the juicy offer Zoho is trying to lure Salesforce clients with?

Free, no-obligation assessment with a Zoho CRM specialist to evaluate needs and confirm Zoho CRM will provide benefits and functionality that are equal, or superior, to what they currently have with Salesforce.com;

Free data migration services;

A free, no-commitment, 15-day trial period for new users to try Zoho CRM with the data migrated from Salesforce.com, in order to confirm their decision to switch to Zoho CRM; and

Once a customer decides to switch to Zoho, a credit on their account for their time remaining on the Salesforce.com contract (up to six months).

A free data migration service seems pretty basic when you plan to lay your hands on your competitors’ clients: other than that there’s not much plus to it: services are equal, a trial period is usually offered to new customers as well (Salesforce, for that matter is offering a 30-day free trial for all new members), and offsetting the costs for the remainder of the Salesforce.com contract is also a minimum requirement if you are so directly targeting someone else’s loyal customers.

So finally, it all boils down to the question of price.

80%+ Savings of your CRM expenses, Zoho claims.

Which is true. Well, almost precisely.

It is pretty clear that, Zoho is a lot cheaper than Salesforce is. The 80% calculation is based on comparing two (almost random) packages: The cheaper package of Zoho ($12 per user per month) and the second chepest (Professional) package of Salesforce ($65 per user per month).

While Salesforce’s costs can be much higher than that (its Unlimited package costs $250 per user per month), and Zoho’s Enterprise Edition costs also twice as much as the one in the example, it is really difficult to match the exact functionality that are included in these packages to see the real difference in pricing.

And, another question remains: all CRM providers claim that the investment in their CRM applications, systems and strategies will pay off if used correctly. I was wondering that if this is the case, it may be worth investing a little more.
What do you think? Please share your thoughts in the comments!