CRM Watchlist 2013 winners: Social is as social does the mainstream, part 2
Keep one thing in the forefront as you read what are my fairly tough love reviews of my 2013 social platform winners. These are maturing companies, not mature for the most part. They are newer to the enterprise world than, say, Oracle, or even Salesforce.com, which is a relative newcomer. They have, for the most part, been successful in the enterprise, even as they need to scale up to sustain their success and expand their opportunities in that always competitive space. It's never a technology question — all of the ones that are focused on the enterprise can scale. When they aren't aimed at that market, like Nimble, it's still broadly about the same question — how sustainable they are in the markets that they target. The CRM Watchlist is an impact award that is based on their ability to sustain that impact over years, and that means to sustain the success of their company over years. Or, at least, my belief in their ability to that based on the evidence I have.
Since I said a lot of what I wanted about the social platforms last Thursday, I won't repeat it here; but there are a couple more things to chat about.
That's why I'm kind of tough on them. I think they are great companies, but they are teens about to graduate college or even in the case of the most mature of these six (I'm not telling you who that I think that is), they are newly graduated from college. This of course is relative to the industry giants — veteran companies with mature models that have their own issues, but sustainability isn't one of them.
So, forgive me in advance if I sound too tough. I bop because I love.
Let's do the housekeeping first.
The 2014 CRM Watchlist registration is now open
On Wednesday, February 20, 2013 at 7.00am ET, the CRM Watchlist 2014 registration process began. Yep, right in the middle of the 2013 reviews. Progress (and time) wait for no man (or woman). What this means is that if you are a technology company or consulting/systems integrator business that does "customer-facing" things, which means software or services products/solutions, you become a candidate for the CRM Watchlist 2014. That means:
You can request a 2014 registration form from me at paul-greenberg3@the56group.com.
When you receive it, fill it out exactly according to instructions and in return you will get the questionnaire for 2014 — either the vendor questionnaire or the consulting/SI questionnaire, which are slightly different.
You have until November 30, 2013, to fill out the questionnaire.
If you send in the registration form to me, I will presume that you are going to fill out the questionnaire by the due date and will start tracking you as soon send the registration back to me. Please don't waste my time and request the questionnaire and then not fill it out. I'm tracking you for the better part of a year if you do send it.
Get Satisfaction
When you run across Get Satisfaction, several things immediately stand out. It has a mature management team led by Wendy Lea and Jeff Nolan — both long-time industry veterans with enormously successful track records. It has a strong platform and a big customer base that has been built on the platform, but also helped build the platform. That customer base is strong — over 3,000 paying customers who pay on a subscription model that is a scalable one that customers actually appreciate. It has a vision of being the online customer engagement platform — not just a service community platform — a very ambitious vision. But at least it has a vision.
Then again, talk is cheap. But unlike others, it isn't just talking. Get Satisfaction is actually doing most of what it has to do to build the foundation for the realization of that vision.
I met these guys back in 2008, I think, when they were pretty much a landing strip for business' customer service communities. In fact, the apparent competition was sites like Planet Feedback. My attention was attracted by what I thought when I first heard it, a strange business model built around the idea that (take a deep breath and exhale slowly as you read this run-on explanation) if companies didn't want to answer customer queries officially on the Get Satisfaction community site, then employees of that company could "represent" those non-participant companies with an unofficial customer service site run by those employees of the company who chose to be involved. Do you get that?
Whew.
But in 2010, given that despite its spectacular growth, there really wasn't much of a revenue model, it wisely began to shift the model to something that was more sustainable — a cloud-based customer community platform that could OEM or at least architect private firewalled communities, and still managed to hold in tow the literally 63,000 communities that it already had. You heard me. There are 63,000 communities by Get Satisfaction's reckoning.
In a way, this is an architectural marvel, because, on the one hand, it has an agnostic platform that is highly configurable and allows its customers to build and run communities on the Get Satisfaction platform. On the other hand, it, in effect, migrated 63,000 communities of both the official and unofficial sort to the new platform (though it was on it already technically) without losing any of its 63,000 pre-existing assets. Luckily, it has a 27-year veteran CTO, David Rowley, to handle this, and you have to like the chances of the platform succeeding as a result.
The company is characterized by careful thinking about the steps it takes — which for the most part works — when focus is prolonged and there are no distractions, though, at times there are (I'll leave it at that because it's not entirely germane to the discussion). For example, it has very carefully considered and well crafted thought leadership documents that focus around concepts that have measurable return. Here's one that typifies the care taken: It's called To Drive Revenue from Your Social Strategy, Invite Customers to be More than Friends, While the name is terrible, the content is exceptional — with definable ROI a part of the document, not just wildly speculative thinking. Often times, there is a confusion between what thought leadership is and speculative fiction is. Not here.
As carefully crafted as its thought leadership is, its partnerships and integrations are opportunistic. I'm sure you hear this said all the time. It merely means that when something comes along that makes sense, and you look to the success in its future and are satisfied, you act on the opportunity. It's done this with its technology integrations. It is integrated with Salesforce, Magneto, Zendesk, HootSuite, JIRA, Good Data, Badgeville, desk.com, and several others. Each of these is designed to be complementary, and, one would have to presume, to drive market presence and revenue. What might be interesting for it is to start pursuing a company like NetSuite who could sorely use its capabilities and in a market — the upper end of the midmarket — that Get Satisfaction could shine.
The platform itself is characterized not by its depth, though it is deep, but by the power that the consistency of the user experience regardless of channel — desktop, mobile etc — brings. It is highly navigable, and remarkably easy to configure. The key to that is a widget architecture that it calls the Engage Widget. The concept is stunning in its simplicity. It goes like this:
You have a community.
You want your customers to be able to involve themselves with the community no matter where they are and what device they are using
You want them to have a consistent and easy user experience where they decide to engage.
You create this widget, which you embed in whatever environment you want to — Facebook, search engines, websites, mobile devices, you name it.
This widget is secure, configured to limit or expand whatever form of conversation you want and whatever conversations you want to expose.
It is a branded widget so that your corporate presence is always clearly there.
It works for both public and private communities.
Sound easy? It kind of is, though of course, there has to be serious though given to #5 and how you want to set that up. But it is a unique and valuable differentiator for Get Satisfaction that also shows there is power in simplicity — sometimes.
So, clearly, Get Satisfaction plays on a big stage, or, as I'd like to say so I can sound erudite, plays at the Globe Theatre. But 2013 is also a key nodal point for it. Like a few of the winners, there are things that involve it getting off the stick and moving ahead right away, or 2013 can be less than expected. However, this company, which won CRM Idol 2011 — the very first American winner — and the Watchlist this year on its own merits — is one that's in my sights because I see it doing exactly what I expect. And that means, win.
What it needs to do
Thought leadership needs to get beyond personalities: Right now, there is no doubt about the presence of Get Satisfaction's two charismatic leading personalities, CEO Wendy Lea and VP of Product Marketing, Jeff Nolan, who is an independent thought leader in addition to the work that he does for Get Satisfaction. They have strong analyst relationships due to their longstanding status in the customer-facing technology industry. But that's not enough. What they don't have is a strong body of work that's out there for all to see when it comes to mindshare. They are competing with Lithium and Jive, with Lithium arguably making the strongest case for mindshare (see below). Get Satisfaction's leaders need to step up their game and provide a consistent and solid body of knowledge to the business world so that they are seen as leaders when it comes to community platforms.
It needs to stop standing still: This is a little more nebulous, but, in the last year or so, if you look at things at a surface level — it seems to be standing still or moving more slowly in the past. That wasn't and isn't necessarily bad; it has been filling out its platform and "maturing" the company. But the problem is that it hasn't shown the level of innovation that it did back in the days before it was a platform and while it was a service community with a provocative business model. It needs to become provocative again. In this case, in the broadest sense, it needs to start creating alliances with some of the big boys and make its value proposition so blatantly obvious that the Accentures, Deloittes, etc, all say, "of course". It needs to be perceived as "provocative, interesting and business sensible" too. It has the perspective to do that. The provocative behavior for it comes from scaling up to the enterprise but in conjunction (and in a go-to market alliance) with some of the marquee big boys. It doesn't have to be intellectually provocative. It has to show to those who need to see that it has a provocative value proposition. Right now, its corporate body language reads good value proposition. Not provocative.
Make the story clear: It is clear that it is transitioning out of pure customer service — always a difficult and highly risky move. But, assuming it does that, then it comes obvious: It has to participate in the forums and discussions around the areas that it is moving to. That would be marketing at this juncture. If it doesn't establish a beachhead quickly in marketing, given that this is the hottest area of all in customer-facing universes — this one and all alternative ones, too — it will flounder. If its story is on the congruence of marketing and customer service, tell the story. If it is doing a pure play in marketing as well as its more historic service-based community platform — tell that story. Whatever it strategically decides, it needs to knit together and make it work — both in execution, but also the public face has to be clean shaven, not scratchy. This is another area for it to be provocative about its value proposition — by telling a new story.
Get Satisfaction made what promised to be its most difficult transition about three years ago from customer service all-purpose community to community platform provider. It was a big deal. But the bread on the table is only there so long before it gets stale. Get Satisfaction is ready to make moves that can make it a serious impact player in 2013 and beyond. I know it has to. I know it wants to. I'm thinking it can.
Lithium
Lithium has been a force in the social software and services world for several years now — meeting the Watchlist "sustain impact over time" criterion easily. It has bobbed and weaved a bit with its focus, moving from service communities to a broader attempt at being both external social and, to a much lesser degree, internal collaboration communities, and then finally cemented with the excellent acquisition of Social Dynamx, refocused on service communities again — its core offering — but with a twist.
From its founding in 2001 by Lyle and Dennis Fong, two major league entrepreneurs and gamers, Lithium has been a company in the headlines. It had enterprise customers for its strong community platform from the beginning; it had a gamers' interface due to the background of the founders — and it stood apart from any other platform of its type. It has had dynamic chief marketing officers from Sanjay Dholakia, now the CMO of Marketo to its current CMO, Katy Keim. It has spent a great deal of time putting itself out in the market — highly visible — but making sure that its campaigns and positioning are carefully crafted before it exposes them to the larger market. It understood and understands the idea of what I call "company ambiance", which is the subtle image that a company presents with the intent to evoke a specific feeling about the company in the marketplace. If you study its imagery, it's high quality and vivid. Very colorful (look at its landing page). It does kind of a modified Windows 8 thing — though to Lithium's credit, this predated the release of Windows 8). The presentation of this subtle ambiance is an important differentiator for companies because the ambiance colors the look and feel of the company. Vivid means vibrant. Live tiles mean motion, action. You think about it for second. You see vivid, vibrant, live, action, motion, and what do you think? What's the picture that gets painted in the mind's eye? Lithium has made an art of this.
But it hasn't ignored substance, either. It's not all imagery. It has arguably some of the best thought leadership material in the entire industry — material that directly impacts customers and the industry as a whole. That's largely due to the work of its chief scientist Michael Wu, who is a leading authority on areas such as big data, influence, social networks, and gamification, among other things. Wisely, Lithium leaves Michael, for the most part, to his own research and writing and doesn't give him trouble about the information and concepts he presents being agnostic. This leads to an impressive body of thought leadership from Michael. However, there is a caveat. As it grows, the internal thought leadership needs to expand beyond just Michael, even with his brilliance. There is a real value in leaving him independent, but also there needs to be others who are emerging in this domain.
Lithium has a solid analyst relations program that, with a few glitches here and there, has been smart and effective. Given that it is not a Big 4 company, it doesn't have unlimited funds to spend, so it is fairly highly targeted to the analysts — institutional, boutique, and independent — that it engages with. But it does engage. Plus, it has an understanding that the world of AR has changed in the last several years, and that smaller entities and individuals carry as much influence as the long-established institutions — albeit in different forms.
The area that it has made the most progress in over the last two years is in its partnerships, thanks to channel veteran Ed Van Siclen, who is doing a great job at Lithium. It has the integration partners that fit its social customer service thrust quite well with companies like Salesforce and a surprising, strong, and valuable strategic partnership with SAP and another one with Microsoft along with smaller but important players like IPSOS and Aspect. But equally as important are the partners who will help it expand its market reach and bring it directly into deals — some big names like Deloitte and PwC.
Even more on the partner side, it is cognizant of the most recent trends that can drive business for it. There is a growing involvement by the agencies — meaning advertising and PR agencies — in what we now are calling CRM, formerly known as SCRM. The agencies are not only looking to implement marketing and customer strategies for their clients, but are getting very involved in the technology selections needed to support the strategies. The most representative and powerful example of this is that Anthony Lye, the former head of Oracle's CRM practice and an industry thought leader, left Oracle at the end of last year and went to major digital agency LBi (a Lithium partner) as the president of Digital Platforms and Channel — a huge catch by LBi and an indicator of the trends. Lithium partners with LBI and SapientNitro among others — an agency strategy that will serve it well.
Finally, it has spent the last three years growing up in a manner of speaking, adding a very senior management team with lots of enterprise experience — something that it sorely lacked in the early days. It had enterprise clients and an enterprise-ready platform, but was not an enterprise-ready company. It lacked veteran presence in several areas that it has now made up, and, with a few minor moves, will be well positioned to win more enterprise deals for a long time to come.
But, but, but. It has a fair amount to do to make sure that it stays competitive and a market leader. It is doing most things right. Some things need to be, uh, tweaked.
What it needs to do
Analytics powuh!: It needs to kick up its analytics offerings several notches. It acquired Scout Labs back in the day for monitoring and analytics, but honestly, that acquisition, which had some value, is still more "meh" than "wow". Its potential enterprise customers are looking to differentiate themselves by being able to anticipate customer behaviors, not only by demographic, but down to the individual level. In fact, in a just-released study by Accenture, it found that in the last three years, the use of analytics as a predictive tool tripled from 12 percent in 2009 to 33 percent in 2012. But the ability to anticipate individual customer behavior takes insight. Insight takes knowledge. Knowledge takes information. Information takes data. Analytics is needed to organize that data so that it ultimately leads to insight. There is a lot of data residing in the communities that Lithium creates. It doesn't currently have the predictive capabilities to support the requirements of larger enterprises. It needs to get it.
Continue building out partnerships/integrations: This one doesn't need much, because it is on the right track. It needs to work to expand the go-to market partnerships to expand the size and amount of deals that are in its pipeline. Partners of PwC, Deloitte, and larger agencies hold the key to this. Grab the agencies in particular, because it's fertile ground that hasn't been raked much yet.
Build up a body of work around customer experience: Its current positioning is around the social customer experience economy, which, without a body of work to support that, sounds like a series of somewhat shop-worn phrases — social customer, customer experience, experience economy — cobbled together without much more than the phrases for substance. In effect, it needs to build up the thought leadership assets to prove the social customer experience economy. But I think it can do this. Hell, this was the company that convinced the industry that it was a Social CRM platform without a single traditional CRM component and won a leadership position in the 2011 and 2012 Gartner Social CRM Magic Quadrant. So building up an "evidentiary" and conceptual set of assets shouldn't be that daunting for this agile company. However, this might be its most important effort in 2013. Either prove it or lose it. Chris Carfi originated social customers about 10 years ago; customer experience is about 60 years old; the experience economy was the name of the seminal work by Joe Pine and James Gilmore in 1999. So "social customer experience economy" is other people's stuff and old terminology. Make it Lithium's via thought leadership around it. The idea is good, but it needs explanation, not a long phrase by itself.
Ratchet down conversation around "social": As I (and many others) have been saying for a year now, social is no longer the conversation. It's a mainstream business requirement. Even the most ardent social companies, like Salesforce, are dropping it as a differentiator per se. It's time for Lithium to do the same. Social is just table stakes. You need it; you need to let people know you have it; but you shouldn't emphasize it.
Lithium is a company that has had continuous impact for the last four to five years. It is a marketing machine with knowledge of the subtleties, and it has a rapidly maturing company that is readying itself to be a permanent player in the business firmament. 2013 is its "year of the debutante's ball". It is coming out to stand and stay on the big stage, where it has been tentatively for the last several years. If it solidifies in the areas that I think it needs to. I've said my piece. Lithium now needs to do it.
Nimble
A two-anecdote start to this one:
Jon Ferrara, the CEO and founder of Nimble, long-time CRM industry pioneer, took the stage at Social Business Atlanta in February 2013 and made an offer to the 250 attendees: "I'd like to offer you Nimble Premium free for one year." The audience went home happy.
This press release hit the wires on March 4, 2013: "Nimble offer[s] free year of social relationship software to over 50 leading startup accelerators." The story went on to say that Nimble was willing to provide a complimentary two-user premium version with 100GB of additional storage for a year to young startups — with an initial list of over 50 who had already said yes.
In a certain way, these two stories typify Nimble — both through its generous nature and industry involvement of its management, especially Jon Ferrara, and a strategy to build up the customer base with a bit of a dependence on conversions — which has its strengths and weaknesses.
To its credit, Nimble almost built a category — social contact management, which it calls social relationship management. It has become a seriously visible recognized presence in small business CRM. Note that I didn't say social CRM, even though it is all about "social". I didn't say it because social CRM is CRM now, and there is no longer a distinction. Social infrastructure, components, and features are built into all CRM systems either from scratch, with retro wiring of the applications or through integrations. It is de rigueur, and SCRM is just plain CRM from now on.
Make no mistake about it: Nimble to a certain extent is still a product in development — a work in progress — as all good products are. But in the last two years, it has added significant functionality — with a strong nod to contemporary business reality — a lot of business information resides on social networks, and small businesses need to be able to surface that information and use it in their daily business lives to think better, sell better, market better, and serve better. To that end, Nimble provides a solid useful product for the small business market in particular — one that is fairly priced at $15 per user per month.
I could go into the features, but what makes Nimble a Watchlist winner in 2013 is its well-executed strategy — one that has been in place for several years. It is a strategy that extends from the partner/channel program to the involvement in social and traditional networks, events, and activities to the analyst relations to the strategy to a well-crafted agenda to building out the customer data it needs to both seed its monetization and to gather intelligence for product development. Let's briefly look at each piece. And I do mean briefly.
Partner strategy: This is a combination of resellers (VARs) and integration partners. Jon, modeling the VAR channel after his success with a similar strategy for Goldmine, which he sold for zillions of dollars years ago, has about 250 VARs that resell Nimble, half of which are outside the US. They focus on the 10-25 user markets. His technology partners are all precisely aimed at providing functionality for that same 10-25 user market, with significant scalability possible if Nimble chooses to do so. So he's integrated with HootSuite, FreshDesk, MailChimp, HubSpot, and several others of the "two words run together" type. What makes this fascinating is that its contact API provides significant extensibility and widens the possibility for a much larger number of technology partners.
Social and traditional outreach: Between Jon Ferrara's constant involvement on social channels, personal one-to-one meetings, on the phone, in the press, at events on the web, and live and anywhere else that Nimble can be evangelized, and PR maven Brenda Christensen's alternative involvement in the same channels, it has done a pretty superb job of insinuating Nimble into the pores of discussion in the industry. It has many relationships at the personal and business levels, with dozens of influencers that have on the balance been beneficial in getting the Nimble message out and respect for what it's trying to do. All in all, the constancy of the campaign, the usually well-crafted messages, the usually non-abrasive cadence, and the level of discussion has worked to give it some genuinely impressive top of mind when it comes to the SMB world technology companies being discussed. The number of write-ups about Nimble in both the traditional and digital press is mind blowing.
Freemium model for leads and data: Nimble has 45,000 registered users and a growing four-figure paid customer base. It has been building the free subscriber model up for a long time, and has used it to generate a good but non-disclosed conversion rate, and has been able to use the data that it has from the free users to improve the product.
All in all, its tightly designed and well-executed strategy is what gets it the impact it has. But it is also at a crossroads in 2013. This is the make-it-or-break-it year, as far as I see it. It has a shot at being wildly successful, but it has one of the tougher roads to travel to be that.
What it needs to do
Revenue, revenue, and, oh yeah, revenue: There is nothing more important in 2013 than revenue for it. It has to date done OK, but it has to step it up by multiples to both give itself the opportunity to exponentially grow and to continue the momentum it has built over the past few years. It has a pretty strong reliance on the conversions, which are great, but I think that there are a number of things to do that will get it to the revenue level that it has to achieve — aside from the conversions. First, its VARS need to step it up. As far as I can tell, and this is just supposition, but I think a reasonable one, its 250 VAR channel isn't pulling its weight, and that means some pressure and reassessment if need be. Revenue is the key. I'll say it 100 times. In my head. 2013 is the year for revenue growth big time for Nimble.
More thought leadership assets: Oddly, given the brilliance of the outreach, Nimble hasn't done much in the way of producing original assets either from internal sources or external subject matter experts. I suspect this is due to not much of a budget for it. Time to bite a little bullet and invest a bit in building up the thought leadership assets — webinars, videos, whitepapers, web apps, and podcasts that define the market it wants to lead. It doesn't have to be a huge investment, but it's a prudent one in 2013 for it.
More integrations, please: This goes hand in hand with the revenue plea. Integrations like HubSpot are perfect because they are integrating with mature companies in a complimentary way that expand its footprint in areas that both flesh out its offering to a more complete CRM offering and at the same time open up Nimble to whole other markets that it otherwise wouldn't be involved with. For example, it makes sense to consider a possible alliance and integration with Infusionsoft. That integration would be with a company that focuses on the same market size roughly, has a huge channel of its own, has complementary functionality (though some overlaps), and has a revenue stream in the tens of millions. It has advocates all over the place. Just see my review here. This opens up opportunity. There are others. It also needs to grow its Apps Marketplace. It has integrations there with NetSuite and others, but one or two partners are building them. More developers on the marketplace should be a priority, though I'd personally try to focus more on added functionality and less on integrations that might be strategic (like the NetSuite one).
Back when I first had it on the Watchlist (2011) it was a matter of faith, and I said that. It's no longer that. It got here because of performance. Its strategy to have an impact has been successful so far. It has reached a crossroads in 2013. If it crosses that road, not only will it continue to impact the market, it can possibly also be known as the market maker, in the same way Radian6 did it several years ago. We'll have to see, but I hope that I can see it with even my 20/20 eyes (without glasses on). That's the potential it has.
That's it for the social, guys and gals. Next up are the Eclectics — top scorer Blackbaud, Coveo, and Thunderhead.
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