Businesses face increasing pressures to adapt and thrive amid intense competition and technological advancements. The integration of AI into customer relationship management (CRM) and the broader digital market is reshaping how companies engage with customers and drive growth.
In conversation with BrandWagon Online, Prashanth Krishnaswami, global head of strategy and thought leadership, CX, Zoho, explains the company’s strategic responses to the shifting market dynamics. From unique approaches to AI integration and commitment to privacy and data security to their plans for tapping into emerging markets and adapting to future trends, Zoho is attempting to chart a distinctive path in a competitive market. We delve into how Zoho plans to maintain its competitive edge internationally, the benefits of its privacy-focused business model, and its strategies for addressing the significant market potential in India. (Edited Excerpts)
Given the high level of competition in international markets, what strategy is Zoho planning to adopt in the coming years to stay competitive?
To stay competitive in the international markets, Zoho has been focusing on regional expansion since around 2017. Our strategy involves setting up a regional headquarters first and then expanding into various countries within that region one by one. This approach helps us support and manage our growth efforts more effectively. We’ve found significant success by targeting underserved markets. While we do face intense competition in markets like the US and parts of Western Europe, we also make substantial gains in regions like Central America, Latin America, East Asia, and Africa. These areas often have fewer software and technology vendors, allowing us to grow rapidly by meeting their needs.
Zoho’s VP of Marketing stated that the company’s edge is not running ads or selling customer data. What does this mean for businesses using Zoho, and what are the challenges and benefits of this business model?
Over the last decade, the definitions and policies surrounding advertising have evolved significantly, making it a complex area to navigate. At Zoho, we’ve made a conscious decision to completely steer clear of advertising. We don’t use third-party trackers on our website, nor do we sell or share customer data, including cookie information, outside of what is permitted by our licensing agreements. We even developed a browser to ensure safer browsing experiences for users, underscoring our commitment to privacy and security.
Instead of relying on advertising, we focus on generating revenue by delivering software that provides genuine value to our customers, helping them grow and succeed. Our approach is simple: we make money when our customers make money. This direct value exchange pushes us to continuously improve our software and remain focused on providing excellent service, rather than seeking additional revenue streams through data sales. Since we don’t sell data, we must ensure our software consistently delivers outstanding value.
Zoho’s CEO recently stated that the company prefers contextually integrating AI tools into its CRM suite rather than fully embracing AI like many in the market. How does Zoho plan to compete in an AI-driven market with this minimal AI intervention?
Zoho’s CEO recently shed light on the company’s unique approach to AI integration. There are generally two ways to implement AI. The first is a generic platform approach, where AI is developed as a broad tool that customers need to integrate into their systems. This method offers extensive capabilities but requires a lot of effort from the customer to figure out how to apply it effectively. It’s typically more suited for large organisations with robust IT teams and deep technical expertise.
The second approach, which Zoho prefers, is contextual integration. In this model, AI is seamlessly embedded into the software, performing complex tasks behind the scenes without the user having to notice or manage it actively. This approach minimises the effort required from customers, making AI readily usable and immediately valuable. Instead of offering a generic AI platform that demands significant customer involvement for integration, Zoho aims to deliver AI that works effortlessly within its software, ensuring that users benefit from advanced capabilities without needing to dive into the technical details.
Zoho recently released a report titled -The State of Digital and Customer Operations in Indian MSMEs, which highlighted that 90% of MSMEs are not currently using a CRM solution but plan to adopt one by 2026. How is Zoho planning to tap into this emerging market opportunity?
Zoho’s strong presence in India, being an Indian company with deep roots and significant brand recall, naturally helps attract interest from MSMEs. Many businesses feel inclined to explore Zoho’s CRM offerings, especially Bigin by Zoho CRM, which is tailored for first-time users. This beginner-level CRM provides key functionalities without the added complexity of traditional systems, making it ideal for businesses just starting with CRM. For companies with larger sales teams and more complex processes, Zoho’s full-fledged CRM offers a more comprehensive solution.
To further capture the MSME market, Zoho partners with SME and startup accelerators, industry bodies, and networks to spread awareness about its products. Additionally, the company invests in advertising, both online and offline, including billboards, to strengthen its presence, particularly in smaller towns and cities where the brand may not be as well-known as in major hubs like Chennai or Bangalore.
What future trends do you anticipate in the digital market, particularly in terms of customer experience and CRM?
We’re expecting to see significant AI adoption across several areas. For instance, AI will greatly reduce turnaround times by processing large volumes of emails much faster than a human could and generating summaries. This will be particularly useful in customer service. In marketing, AI will enhance customer segmentation by analysing customer data and creating targeted segments for more accurate messaging and promotional campaigns. It will also help identify the best channels and times to communicate with specific customers. Additionally, AI can analyse customer interactions to provide insights into how you’re performing compared to competitors and redact sensitive information from emails for internal use.
Another trend we expect is a balance between personalisation and privacy. With the combination of legislation and social awareness, there will likely be a baseline of expectations ensuring that privacy isn’t compromised for personalisation, and vice versa. We also foresee a shift in how organisations use software. Instead of relying on 50 different tools from various vendors, companies will likely consolidate to a few core suites of software, filling any gaps with specialised tools as needed. We hope to be one of the key vendors in this more streamlined approach.