The winners of the CRM Watchlist 2016 are here!! After reading thousands of pages and scoring them ruthlessly and brutally, the Elites, winners with distinction, regular winners, honorable mentions and a couple of organizations that I've singled out for other reasons, have been decided.
'Tis the season.
This year, 131 companies submitted their questionnaires. I have to admit, I made this year's scoring a couple of magnitudes tougher than last year - probably the last scoring change for a few more years. So for example there were several companies that would have won last year with the score they received who fell to honorable mention this year. There were several companies (four to be exact) who would have been Elite last year, who won this year but not as an Elite. We welcomed two new Elite winners this year. One company that was Elite last year, got the same score but this year "merely" won. So it was brutal. As nice as I am outside the Watchlist, I'm a total SOB when it comes to the scoring of the Watchlist.
Know why? I'm gonna tell you - unless you don't want to hear it? You do. GREAT! J
Let's start with this. I am fully aware of the amount of time that companies put into their Watchlist submissions. Last year I was bragging about how the prior record of 61 pages had been surpassed with a 90-page submission. This year I had 3 submissions that surpassed that with a record submission of 108 pages. I am truly honored that companies feel that this award is worthy of that effort. I don't want to humblebrag (I do actually) but I am thrilled to death that they care enough. It's also why I will never charge money to enter as others do. The effort alone is the "charge" for the Watchlist.
By the same token, though, I have to read more than 2000 pages and score them each year and then analyze companies doing dozens to hundreds of hours of external research beyond what I am reading with the submissions. I did an analysis of my hours spent and the dollar value given my consulting fees and it would be about $400,000 worth of free consulting. Each and every year. So I am working at this too - because I do think I have to provide value.
But providing value is also making the award worth something. Each and every company is evaluated according to the markets they are in, the overall business climate, the strategies and thinking of the customer-facing parts of the business world and the technology world's rather unique lens. Each year, because that changes, the weight of the questions changes - meaning how important one question is relative to the others given the market(s) and climate and thinking of that particular year. In a lot of ways, I'm preparing all year to do the Watchlist.
But make no mistake about it. What I am doing is looking at the impact a company has in the markets it addresses. I'm not doing my analyst thing - and evaluating whether or not, for example, they have the right mission and vision or whether their message is exactly on point. What I am evaluating is their marketing strategy and how well they executed it and what kind of impact it created. I might completely disagree with the message but that doesn't mean you don't win the Watchlist. It might mean that when I have my analyst, not my judge's mouth motoring, I will publicly disagree but the Watchlist is about one thing and one thing only - impact - and what you do to have it.
Think of it this way. I'm not rating the quality of the product or analyzing the messaging. I'm looking at the actual impact a company has on its market both in the year immediately past (e.g. 2015 for the 2016 CRM Watchlist) and what I can ascertain based on what I am told in the submission and what I find elsewhere for the next two to three years. That means I am looking at this with an eye on the company not its offering. Its offering is only a part of it.
What do I mean by impact?
Well, for example if your company is top of mind without prompting for a customer when they are making a vendor selection, that means you are having an impact. If your competitors set their compass by you, that's impact. If you are seen by pundits, press, and practitioners as a leading solution or provider in your field, that's impact. If you are the subject of brand buzz in external channels that's impact. If prospects routinely think of you as on the short list for vendor selection, that's impact. If you are the go-to subject matter experts in your domain, that's impact. And that's only a part of what makes impact up. As you know there are 12 questions and dozens of sub-questions within each primary question. The answers in combination (plus several other "they-will-remain-secret" things, commonly called by those with no literary skills, secret sauce) provides me with an indication of how much impact you've had and what I think you are going to have. The present and the future have to be, uh, present, for you to even be considered as a possible winner of the Watchlist.
Impact doesn't have to be global to win the CRM Watchlist. It can be geographical, for example EMEA, Latin America, or strictly North America. It can be the domination of a category of software or services if the category is more than a small niche. So dominating the sales force automation area, or customer analytics. It can be domination of a vertical industry - e.g. health services, non-profit, public sector. But one way or the other, the impact has to be obvious, both in the prior year and in the anticipated next two or three years. that there is no doubt at all that your company is making a major impression on a market and actually changing or strengthening that market by its presence.
To have an impact, the company has to be pretty much a complete company who has been doing this long enough to have established a rhythm that leads to impact. The company has to be well rounded -- it has financial stability, solid management, excellent products and services, culture, and a strong partner ecosystem to help sustain its efforts. It has to have a clear vision and mission and also clear-cut strategies to get external forces - customers, analysts, journalists, prospects, etc. - engaged.
But it also means that the outreach, the engagement with the market and those in it, the prospects, the customers, the analysts, and the journalists -- those who can influence the marketplace -- have to be there, too. That takes a complete (and complex) set of tools and activities which could include marketing, outreach to influencers (analysts, journalists), the subject matter expertise via the content produced and distributed for consumption, and the activities necessary to stay top of mind as well as capture share of wallet.
That is not an easy task. What does it take? That's the purpose of the CRM Watchlist and has been since it was created nine years ago as the Steppin' Out Awards for one of the editions of CRM at the Speed of Light.
So what are the segments that have to be considered. To understand that, let's look at both the process for this year's CRM Watchlist and the criteria for next year's - the 2017 CRM Watchlist (see the registration announcement at the end of this post - after the winners list is announced).
The CRM Watchlist 2016: the process and the surprises
I had 131 submissions out of 144 registrations this year. I thought with a submission last year of 90 pages that I had no one would ever beat that. Little did I know. I had 3 over 100 pages and three more over 90 pages. I don't know the average size but I would guess somewhere north of 45 pages. So I read over 4000 pages for this year's Watchlist, roughly. I think. Once again, no life again during the holidays and well into this year, since I gave the submitters a later submission date and more time. Poor wittle me. That is such a first world problem. But the result is, I know officially know more than Wikipedia about an astonishing number tech companies - okay, metaphorically, not officially. As I have been doing for the last several years, I had asked the registrants to let me know if they weren't submitting since the minute they registered they went onto my radar so there was a considerable investment in time, with the expectation that they were going to submit to the Watchlist. If they decided not to submit, I understood, all I asked is that they tell me by a specific date. If they did that. No harm. No foul. If they didn't tell me and didn't submit they have now one more shot at it. If they register again and don't submit, and there is no withdrawal for any reason in their case, they are given a permaban. So, that said, to those that did submit, thank you for honoring me. For those that didn't submit but told me, thank you for telling me. For those that didn't submit and didn't bother to let me know even though I had been researching them since they registered and explicitly said not to register if you aren't submitting, you have one more shot - if you register and don't submit, don't ever bother register again. I'll be letting you know who you are shortly after this post is up. Watch for an email
My process is straightforward. I put out the call for registration. I leave registration open until about a month before the submission is due. Then there is a submission date that has no individual extensions allowed. There is a single submission allowed, no updates, so it's wise to submit as close to the final date and time as the submitting company feels comfortable with.
As soon as a company registers, I start to track them. The reason for that is there is a lot of information I need to gather (it varies by company and how much I know them) prior to the submission that will help me corroborate their statements and supplement their submission when the time comes. Over the year, I spend hours with each registrant's company, gathering info. But to be honest, that's not hard, because I need to track some of them anyway (they are my clients, or part of my coverage as an analyst) and I like getting to know new companies this way. I started using a tool last year called RivalIQ, which tracks a comprehensive digital footprint of any companies that have them. They provide detailed reports that give me some insight into the use of digital communications tools. For example, Oracle's social presence continues to be greater than any other company I tracked though the gap is closing a bit this year from last year.
Once I get the submission, I go over every single word and, key to this, the submission is 85 percent of the material I use to derive the score of the particular company. The other 15 percent is the external material I need. This is a metaphorical number for the ratio. It could be 80 percent to 20 percent. The point is that the submission had better be convincing if you want to win. You'd be surprised at the number of people who give half answers to a question and, they are dinged for it. I'm not kidding when I say in the questionnaire that every question has to be answered in full. Theoretically, I should be able to have all the information that I need innate to the questionnaire. But there are a lot of companies that don't seem to believe me when I say that. Let's say I mean it, and there is one company that would have won if they had answered the specific questions within one of the primary questions. But they didn't and thus they didn't.
As I said above, the scoring is done with weighted criteria. Each year, depending on the market, the scoring weights change. For example, in years of financial uncertainty (think 2008), the financial stability of a company is weighted higher than normal, though, of course, it is always important. Some years, they are remarkably flat. This year there were a couple of more emphasized and less emphasized areas than last year. It wasn't totally flat.
Once the scoring is done, the result is "automated", meaning I have a spreadsheet that sees the score and color codes the number. The resulting color code shows me whether the company was an elite, a winner with distinction, winner, an honorable mention, or didn't place this year, based on the rules. Winner with distinction is a new category for companies that just missed (and I mean just missed) elite status but because it was so hard to even get honorable mention this year, deserved a "plus" status of some kind. This year, honorable mention is more meaningful than ever too. It means that the company that got it, while didn't win, did score enough in some places to show that they are poised for breakout.
Following the scores, there is the "and the winners of the 201X CRM Watchlist are..." announcement. That same post has the criteria used for this and next year in it, so I would carefully read it (this post in other words) if you have ANY interest in the CRM Watchlist any year. Over the next few months, I will write the reviews of each and every winner (not honorable mentions)- and for my own and your convenience I lump them into categories. But to reiterate something that I seem to have to reiterate every year, there are no categorical winners. The categories are conveniences that allow me to group winners who do similar things. That is all. This year, I had a company who claimed in their submission, they were the winners in the customer engagement category in their submission. They had been winners but they didn't win the category because there isn't any winner by category!! Get it? NONE. Let's say they lost points for that. Because it means they can't follow multiply repeated instructions - and are making a false claim.
The reviews are written with two things in mind. Describing why this amazing company won - and what they can do better. I often say that this has got to be the only award that vendors fear winning. It's basically, "Hi, you win and here's what's wrong with you!"
As always, there were some surprises. Less winners than usual. A new Elite or two. A few new winning companies - and a handful of companies that I thought would win that didn't. And a couple who had won in past years, lost and came back. You'll see that when you see the list.
One other thing and we can move on.
If you are a company that submitted your questionnaire and didn't win or dropped a notch or whatever, you have the right to ask me for time to explain why you didn't do as well as you thought you would. We'll figure out a 30-minute time slot that is amenable to both of us and we'll have that discussion. because I know that you worked hard to submit what was likely a comprehensive answer. However, the big caveats on this are that it will only happen after all the reviews are done and you'll only get the answers I can give you without exposing some of the criteria I keep to myself. And to be entirely candid, while the time will be amenable to both parties, it will be more at my discretion. Sorry for the rules, but I'm one person and I want to accommodate as many as I can who request it. So there have to be limits. Each year about 10 companies take me up on it - give or take a few. I wish that more did. I owe them.
2016 CRM Watchlist notable 'trends' and observations
As always, certain things stood out when you looked at the cumulative submissions. I'm calling them "trends" but what they really are can be classified as observations based on the content of the Watchlist. I'm not saying they are reflecting the market place. I'm saying they reflect common themes and elements that were noticeable in the Watchlist submissions. Please pay close attention here because some of these aren't market observations but common errors in the submissions - which means that you will learn what NOT to do next year - if you pay attention. I can tell you that one trend I noticed is that people didn't pay attention to what I said and the result was repeat mistakes that got them dings - negative scores this year.
Here we go:
Platform plays increase: There were a significant number of the submissions in multiple areas - customer service, CRM, customer engagement (particularly large number) and others - who claimed to be more platform than solution or application - and could at least marginally and usually robustly, justify the claim.
Real lack of top of mind re: corporate giving, again: It amazes me how when a company speaks to its culture, corporate giving in whatever format is not even mentioned. Also, the companies that tell me that their corporate giving consists of them allowing their employees to take time off without pay. That's not even as good as vacation. Step up people. Those of you who make it a prominent part of your culture. Thank you for your wonderful efforts.
Sales acceleration, optimization, enablement up dramatically: The number of submissions who provided some sort of sales adjunct service or application - something that is tied to sales force automation - were way up this year - and what makes this area interesting (I like sales optimization for it) is that they were not competitive - entirely different. The best way to define this is a service or application that supports a margin of advantage in getting a deal closed.
Customer engagement and especially customer journeys on a significant upswing: Way up this year, as opposed to last year, when it was marginally up. Customer journey related applications in particular were a big part of the Watchlist submissions.
Lots of transition: markets, management: As last year, once again there have been more major management changes, moves into new markets, and rebranding efforts than ever before, creating a lot of "impact uncertainty" in otherwise very good companies.
The outcomes based messaging increased marginally. Last year I said, "There is far too much product-dominant messaging at this stage of the game. Customers are looking for outcomes -- how what you provide provides the outcomes that they need to achieve their goals." I'd love to think I had something to do with the change, but I am not flattering myself in this area - the customers had something to do with it - but the outcomes based focus of the messaging was much better than in the past.
The long market nightmare continues: horrible RightX3 overuse - I'm just going to repeat exactly what I said this year with one additional sentence at the end. "This is just me bitching about cliché driven marketing. I don't know about you but I'm sick of RightX3. It goes something like this: 'We're giving customers the right blah for the right ugh in the right yuck.' This seems to have superseded the need to make sure that the value of your offering is expressed in words that all start with the same letter as the most obnoxious messaging trend. Too many submissions had right, right right. Far too many." Here's the additional sentence: This year, if you put it in your submission - ding!! Please rethink that. Provide the right message to the right customer without the use of the word right. OMG. I did it now!! Ahhhhh!!
Now for 2017, the criteria that will be in effect. That will be (minus the changes in the weighting of the questions) almost the same exact criteria as 2016.
The 2017 criteria
There are two sets of criteria: One embodied in the questionnaire with the 12 questions that have to be answered, and the second with many characteristics I'm looking for that are not publicly apparent. Let's start with the 12 criteria (not the questions, per se, the criteria).
Here are the 12 criteria (though not the full set of questions I asked about each):
- Corporate overview: Who are you and why should you be on the Watchlist?
- Financial overview (confidential): Tell me as much financial information as you are comfortable revealing, but make a case for your financial stability and growth.
- Management: Who runs the show there when it comes to all customer-facing things, both generally and specifically?
- Vision and mission: Not only what is your vision and what is your mission, but also how is it manifested in your business and interactions with the rest of the world?
- Technology: If you're a tech company, what are your products, services, and pricing? As a consulting/SI firm, what practices do you have and what is your expertise in those?
- Customers: Who are your customers, what is your deal size, give me some marquee names if you can?
- Partnerships: How do you think about partnering? Who are your alliance partners and why? What kind of programs do you have?
- Marketing strategy: What is the approach you will take to marketing in the upcoming time frame? What kind of actions does that lead to?
- Outreach (analyst relations; public relations): What is your outreach game plan? Who are you talking to and what kinds of interactions do you have with the analysts and journalists?
- Market impact: How top of mind are you in the marketplace? What awards have you won? How is your presence sought after and found?
- Thought leadership: What kinds of things are you doing to capture mindshare, not market share?
- Culture: How great are you to work for? Work with? (make sure you read what I said earlier about culture and giving).
These are merely paraphrased, and by no means complete descriptions of the requirements of submission. Each of these is weighted differentially each year based on real-life market forces. There are also multiple components that drive either positive or negative intangible scores that can have a serious impact on the final result, which aren't necessarily a direct answer to a specific question. Nor will you ever know more than one or two of them. AND they can change from year to year. I have given you some hints as to a couple in this post, though.
Please bear something in mind when it comes to all of this: Just because you didn't win doesn't mean you are a bad company. For example, going through a major transition in some way can have a serious effect on your score because of the uncertainty of that transition. Remember this is an impact award, and if I can't see both the impact you had in the prior year (for example, 2016 award, 2015 impact; the 2017 award, is the impact you had this year) or easily foresee the likely impact you will have in the next three years, your chances of winning are diminished. Transitions make that clear line of sight foggier. There are an enormous number of factors at play in winning the CRM Watchlist.
Another thing, just to be entirely candid and perfectly clear, this is geared to established companies, so the larger ones have a better chance (though no guarantee) of winning the award. They have the resources that a lot of smaller companies don't have to execute on the things they need to do to have an effect on a market. They have a longer-standing history typically, and they have a lot more money. They have a much greater reach and market recognition. They are mature and can invest not only the money, but also the manpower in the specialized activities that can be required to impact a market. In smaller companies, the resources just often aren't there, but that by no means negates smaller companies from having an impact. There are a few smaller companies that won this year, as in every year that I've run this - and it happened again this year.
Addendum on the 2017 CRM Watchlist registration
As of today, the 2017 CRM Watchlist is now open for registration. In order to register, please send me a request for a CRM Watchlist registration form. The email to send me the request is firstname.lastname@example.org. No other email or channel. I will send you the form, you then send it back to me at the same address after you fill it out completely. Then when the questionnaire for 2017 is ready, I'll send you the Watchlist questionnaire with instructions including the 2017 due date.
If you are a small company with no revenue or just a beta product with no active customers, really, don't bother to submit. You won't win. This is an IMPACT award that means you need to have presence in a market. Several companies this year were missing multiple FUNDAMENTAL components that are needed to have an impact - and of course - had little or nothing to show. This year, one company earned the lowest score in the history of the Watchlist.
If you register, please register with the idea that you are going to submit a questionnaire. Don't register to just get on my radar and then not submit. I am a human being. Thus, I am limited by time in what I do with my life. Consequently, I don't want to waste time. If you just want to get on my radar, there are other ways to do it than register for the Watchlist.
To win this, you have to be a formidable presence in the market. You are a company that has a great value, not just to the customers you serve, but also to the market you reside in. You are a company that has a sustainable impact on the actual direction that your market takes, and thus, for a company considering the purchase of products or services, a more than viable candidate for being the top choice in their arsenal (with all the caveats attendant on that statement).
Okay before the good stuff, my disclaimer - same one as always.
- Some of the winners are my clients; some are not
- Some of the honorable mentions are my clients; some are not
- Some of those that didn't win are my clients; some are not
- Some of the companies that didn't enter the Watchlist at all are my clients; some are not.
Really, finally, the winners
The 2016 CRM Watchlist Winners
Lifetime achievement award
NONE THIS YEAR - I'm going to open this up to public nomination starting with the 2017 Watchlist. Stay tuned here for that one.
Vendors (in alphabetical order)
Elite - These reached a score level that was astronomically difficult to reach. Elite indeed.
3. Salesforce.com - Highest score in 2016. Congrats, Salesforce
Winners with distinction - Fell just short of Elite, but cream of the crop of winners
Winners - Tougher than ever, whoever got this level - bravo.
4. Callidus Cloud
15. Pitney Bowes
Honorable Mention - Only a little bit stood in the way. Breakout on the cusp.
Note: This year, not only am I adding links to honorable mention, but there will be a post devoted to the honorable mention winners sometime during the year. This wasn't an easy title to attain. You had to be good. Several of the HMs would have been winners under last year's scoring system.
Consulting groups/systems integrators (in alphabetical order)
2. Ernst and Young Advisory
1. The Pedowitz Group
There were none in the Consulting groups/systems integrators this year
These are companies that with some tweaks are good bets to win next year, though of course, it all depends on them (and whether or not they enter the Watchlist)
That's about it folks. Please congratulate all those who won the CRM Watchlist for 2016!!!
CLAP CLAP CLAP CLAP!!
On to 2017
Remember, if you want to register for CRM Watchlist 2017, registration has now officially begun as of this post. Send me an email at email@example.com requesting a registration form and we'll take it from there.