CRM Watchlist 2013 Winners: Customer Service Served Hot

REPEAT ANNOUNCEMENT

On Wednesday February 20, 2013 at 7:00am ET, the CRM Watchlist 2014 registration process begins. Yep, right in the middle of the 2013 reviews. Progress (and time) wait for no man (or woman). What that 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 that:

1. You can request a 2014 registration form from me at paul-greenberg3@the56group.com.
2. 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
3. You have until November 30, 2013 to fill out the questionnaire.
4. 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.

Previously on CRM Watchlist 2013:

1. CRM Watchlist 2013 Lifetime Achievement: IBM Institute for Business Value
2. The Sweetest Suites: Part 1 of 3 – salesforce.com; Microsoft
3. The Sweetest Suites: Part 2 of 3 – SAP, Oracle
4. The Sweetest Suites: Part 3 of 3 – Infor, NetSuite, SugarCRM
5. Marketing Puts Itself Out There - Aprimo, Eloqua, Hubspot, Infusionsoft, Marketo, Neolane

We now return to our show in progress....

Overview

Customer service is where Social CRM – which incidentally can now be called just CRM  (no, not JCRM; CRM) – due to the pervasiveness of so called social – which now doesn’t need to be called anything but mainstream – got its start.  Unlike the more traditional operational CRM which got its start two plus decades ago in sales, customer service, because of the more demanding customers created by the communications revolutions of the last decade, triggered the need to extend CRM to new and more uncontrollable (by the company) areas. It also meant that, because peer trust became more important than the trust of the customer in the company, that the company needed to empower individuals who reflected the company in ways that were no longer confined to a contact center. Everyone (in a metaphorical sense) became a customer service rep when it came to dealings between the company and the customer – whether or not the company empowered the employee to do that. The customers decided who they trusted at the company and if possible dealt with that person – which could have been the sales guy who sold them the goods that they bought. The world had changed.

That’s why the nature of customer service has changed also.  It no longer is confined to the contact center. The contact center itself has shifted from a giant phone bank of customer service reps more of what used to be called a customer interaction center (CIC), a good name for the new function.  In fact, customer service reps job descriptions are beginning to change (slowly but steadily) with new training in facilitating customer service communities or how to handle social media specific responses or even how to be able to provide better facilitation of knowledge via the multiple places that the knowledge is being gathered from – both internal  and external. In fact, there is a new level of CSR that is actually considerably more complex and responsible that has some sales upside too – it’s called the success manager – a person who is assigned specific accounts and whose job is to service those accounts and make sure that they are getting what they need from the vendor that they are associated with – a partner manager if you will. They are almost hybrids – with service, some marketing and some sales responsibilities – but mostly service.

That said, there is still a LOT of the more traditional service centers out there but the nature of customer service is changing dramatically and whether you want to accept that or not, too bad.  It is and it has to be taken into account – as does what hasn’t changed much.

What makes this winners list particularly intriguing is that each of these companies is quite distinct from the other but they all reside in the world of customer service.  They all have had an impact in 2012 and I expect they will in 2013.  But each of them can maximize that impact if they just do a couple of things…….

KANA

KANA is an odd and fairly prominent duck of a company. Since they were founded in 1999, they appear and disappear and reappear in the market wholly reinvented every few years. Each time they would disappear, they would turn out some incredible alumni who populated the technology world with a great deal of success – and yet the company would become a ghost.  There was still a footprint but that was all that was there.

Yet about 4 years ago, when honestly, I thought that they had finally met their maker, I was proven to be totally and completely wrong. In early 2010 (for all intents and purposes), they reappeared as a healthy company with many tens of millions in the bank – the number varies depending on who you hear it from – but debt-free doesn’t - and a desire to acquire. Turns out, in turn, they had been acquired by private equity partnership Accel-KKR, easily in the A-list of private equity companies.  What a good life someone there must have been leading. J

Much as I could talk about their product suite, I want to focus on something else for these guys. (If you want to check out my thinking on their products, check the 2012 Watchlist here.) That desire to acquire. From 2010 through 2012, they made four what appear to be very intelligent and possibly brilliant acquisitions each to fill a need that would give them both increased global reach, greater vertical penetration, a richer and deeper product set and more highly experienced management teams.  These are the four:

1. Lagan Technologies – October 2010 – This gave KANA a public sector and European footprint that was dramatically expanded. Lagan brought with it some astounding customer references, excellent management and a very, very good technology.
2. Overtone – April 2011 – KANA bought the technology which gave KANA a social listening and text analytics platform to integrate across their enterprise applications.
3. Trinicom – April 2012 – A Dutch cloud services based customer interaction engine and web customer service provider that was aimed at the SMB market.
4. Sword Ciboodle – July 2012 – CRM Watchlist 2012 winner Sword Ciboodle was perhaps, in the long term, the best acquisition of all though Lagan certainly might cry foul here.  Sword Ciboodle did complex enterprise call center work adapted to the 21^st century’s business requirements. They also provided KANA with a great staff – Steven Thurlow who runs KANA’s technology development, Paul White who runs EMEA sales, Kenny Bain who is the GM for EMEA and Clare Dorrian, an analyst relations superstar. They also benefited from a marquee customer list and expanded scope in EMEA and to some extent, in the U.S.

These acquisitions for the most part, at least on paper and in the case of Lagan in execution have or will turn out remarkably well for KANA. Wise moves.

But what they need to do to have a true impact in 2013 is pretty extensive.

What they need to do

1. Improve their thought leadership –KANA has changed their messaging from service experience to all in on customer experience – as have many firms. But they have little beyond the link I sent you to that backs up the claim. Plus this is the positioning du jour for so many vendors, the time and effort that will go into seizing some of the mindshare around this subject is a big enough decision to bring pause. But KANA has to invest. There is a lot at stake with them. They don’t have is thought leadership in the service space. They have a lot of documents and videos but for the most part, they follow the standard product marketing stuff that is no longer the way to capture hearts and minds.
2. Use Clare Dorrian well – That might sound kinda creepy, but it isn’t. Clare is a genuine star when it comes to handling analyst/influencer relations – trusted by those that know her and she knows how the world has changed. I can’t say the same for KANA. They have operated for the last several years on the old school model that still can be used but leaves missed opportunities and mindshare on tables everywhere. Just dealing with Forrester and Gartner and the other institutional analyst organization is not sufficient though it is necessary. Want the best example of KANA’s outlook – take a look at what they think of analyst comments here.  Time to move on and let Clare do what she does.
3. Regain the confidence of the market – KANA’s here today, gone several days later, back in a week kind of existence has kept a lot of the market watchers and even customers at bay because of never exactly knowing what is going to happen next. KANA has to both prove their stability and create the atmosphere of a stable company to boost the confidence again of the market that has seen them come and go more than once.
4. Rejigger the message a bit – If you read KANA’s messaging, while it is very much experience-focused as its theme, it is product-centric at its core. Perhaps the best example is the way that experience is handled on their site. Here it is – a breakout of each facet of experience without any real indication that the interactions on the different channels and media are all in all what comprise the customer’s actual experience.  The pieces that they describe are facets. They should be thinking more in light of the customer journey not the agent needs per se. The agents need to succeed to provide value to customer who in return provides value to the company. Thus the overall impression, the feeling that the customer has about the company has a great deal to do with how they interact with that company. Each descriptive piece they have is a potential touchpoint for that customer in their personal journey with the company. They have nothing to provide a unifying view of that journey. Plus, though there is no time or space to go into here, I think they use the word “experience” loosely.  They need to make this message around experience just a lot tighter and better.

This year is a watershed year for KANA. Their excellent acquisitions are absorbed (Lagan) or in the process of being absorbed (Sword Ciboodle) into the company.  But they also have migrated their message and positioning to all in on customer experience. This in combination with the need to regain market confidence makes 2013 a make it or break it year for them.  I’m betting on “make it.”

Moxie

Years ago, when they were nGenera (yes, that was Moxie’s name in prehistoric times), I remember that they got my attention because as I defined it at the time (2008), they were the first social company to acquire a CRM company – Talisma.  As it turns out, I was probably slightly misspeaking when I said “social” because they weren’t really that exactly – and they acquired Talisma for its interaction engine, not its CRM capabilities. They sold those to Campus Management later that same year.  BUT, they got my attention and have had it ever since.

Since that time I remember they made the name change from nGenera to Moxie – which was something of a gutsy move since moxie has been associated with two other concepts – a soft drink that’s been around since 1876 (and is now the state soft drink of Maine)  and a definition that means something on the order of “determination and gutsiness” or an “energetic courage.”  Yet, to their credit, (and I was skeptical) they’ve made it their own. They’ve shown a lot of moxie, actually, though I doubt they’ve drunk the stuff. I have. Ugh.

When I first met them in the nGenera days, they were essentially an aggregation of a number of companies that had been acquired for about $100 million and were rolled up under the nGenera banner. While they were an early on formidable agglomeration of entities they had a lot of trouble determining who they were and I questioned them directly as to their constant change in messaging and positioning and their mix of products.

But again, Moxie showed itself. Now their positioning and messaging is clear; they are a strong part of the customer service world who have a world class knowledge management platform.  They’ve been smart enough to have a sophisticated view of the world of communities and rather than just seeing them as congregation points for some reason (e.g. service responses, etc.), they also see the value as knowledge curation channels and have added the ability to create or capture knowledge and then distribute and consume knowledge through those communities.  They also understand clearly that their take on customer service is not the same as the purely traditional contact center focused approaches taken by many of the major customer service software vendors. This has given them a clear position in the market place that’s led to Gartner giving them a spot in the upper right Leaders square in their 2013 Web Customer Service Magic Quadrant.  

Their significant differences with the more traditional customer service platforms also has allowed them to develop a handful of strategic partnerships with technology companies who do have customer service offerings such as salesforce.com, which has of course the Service Cloud and more recently, a go to market partnership with Microsoft and its Dynamics CRM group. 

Thanks to their recognition of who they are, the marketing work done by CMO Tara Sporrer and the continual improvement of their products, they are now clearly an impact player in the customer-facing world.

But they do have to clean up around the edges this year in order to optimize their impact – with both the industry and with future customers. 

Here’s what I’m thinking

What they need to do

1. Compress the product portfolio – As I stated earlier, Moxie started out as an aggregation of a fairly disparate set of companies rolled up under the Moxie banner. This model doesn’t work that well for a long time though many companies have started that way. Moxie proved that they could get past this in the grand scheme and are now a single company with unified messaging and a singular and competitive position.  However, that old thinking hasn’t been totally eliminated – it still shows in their Spaces Product Suite.  They have 11 products – which by itself, isn’t a bad number. But I have to question how something like “click-to-call” is a product, and not a feature. It might be time to rethink and re-engineer the product suite a bit – to a smaller and/or more manageable group of products, not features. I’m just sayin’
2. Start thinking of ecosystems this year - This is an era where ecosystems are becoming increasingly important to companies that are competitive with not only major players but upstarts that are aimed at capturing market share. We see the early stages of ecosystem thinking in significant numbers of companies with the concept of marketplaces or exchanges that allow for increased capabilities that the parent company isn’t going to build. Moxie has been a singular enough solution to get away with not thinking in those terms for a long time and will be able to continue as they are now for a while longer.  But there comes a time….and I’d start thinking about it in 2013, if not doing anything about it beyond that.
3. Escalate, escalate, escalate visibility on the thought leadership front – This one is kind of tough to say, because Moxie does do a lot on this front. Not only do they engage third parties (like me) to develop thought leadership assets, they do a significant amount of their own work. Don Tapscott, long a thought leader in the social and collaboration space, has been part of the Moxie team since 2007. They have what they call a “think tank” Moxie Insight, which is a thought leadership destination (to use an overused word). They speak at conferences (aside from Don Tapscott, who is an entity unto himself as far as his scope goes). They are busy. But…they frankly need to refresh their content and rethink their strategy around thought leadership. For starters, they need to get far more return as a brand on the thought leadership work that they already do. Then, they need a significant content refresh. For example, Moxie Insight could use a makeover.  They need to be thinking about seizing mindshare not just doing thought leadership.

All that said, Moxie in 2013 is going to be an impact player as they were in 2012.  They are a sterling company with great people and a great position that is well defined in market that they can be leaders in.  But the time is now for them to make sure that in 2014 and going forward they keep winning the CRM Watchlist. Of course, that’s a metaphor, not a literal objective. J

Parature

Parature has been around a lot longer than most know – and therein lies their beauty and their dilemma. They have been “on the scene” since they were founded by industry veterans Ching-Ho Fung and Duke Chung in 2001. They have been noticed in the stream but if you had to give it an animal analogy – tortoise would be a good one – as in tortoise and hare. In other words, they have been solid enough to keep growing, build a marquee list of customers.

What’s most interesting about Parature’s customers and is a truly standout differentiator is their public sector presence which is substantial and has been built without a lot of fanfare. They have a very deep presence in the federal government, which is local to the Vienna Virginia based company.  Think about this list, oh jealous other companies: Department of Justice, Small Business Administration, NASA, FEMA, Defense Finance and Accounting Services, Housing and Urban Development. This is only partial and even by itself is a list of clients in the public sector to die for.

It has been fascinating to see them creep along steadily improving year over year.  They have taken what is a traditional idea – a service desk and made it, piece by piece, contemporary. They’ve used the fundamental features of a service desk and reorganized them, redefined them, reshaped them – and then added significant pieces so that, while the nature of the service desk remains – taking care of customer support via case management – the ways to go about it and the way that things are consumed have been added or enhanced. So for example, if you’re a Parature customer, you can take care of  your customer support via traditional channels – phone, email, chat etc. and via self service, and mobile and social channels. Beyond that, they have Parature Feedback and Survey, both of which provide the ability to aggregate opinions and ideas of the customers concerning support interactions or capabilities. So they are a nearly complete, neat system.

But note I said nearly. What they need to start thinking about in their roadmaps if they haven’t already is to bolster the knowledge management components of their offering. They have a standard piece – Parature Knowledgebase – but its pretty much that – basic. With the proliferation of data and the interest out there in peer related customer service and results – those capabilities are something to consider in a more profound capacity.  Remember, the communications revolution also transformed how we create, distribute and consume information.  That is something that no vendor can ignore – especially not in customer service. Perhaps Parature can look at CRM Watchlist 2013 winner Moxie for some idea of how to do this right.  Or since they are complementary, consider a partnership.  I say that with the caveat they do go after different markets.

But for 2013, there’s only one big thing that Parature has to do to have the level of impact I expect they can and will – though it has multiple parts – and that is…

What they need to do

1. They need to make themselves KNOWN not “known”– There is no question that Parature has a public presence but it is a public presence that is ghostly. Those who know them like them. They have the trust of their customers – something to be said big time for that. They have some visibility and they are wise and judicious in their partnerships. They partner without rancor with other technology companies. The resulting effect has been slow, steady, incremental growth – which is not a bad way to go. They introduce intelligent updates to their product suite. They do what an excellent and humble company does – but this is not a world for humble companies now.  I’m not asking them to change their personality at all. They are good people with a successful track record. But they need to sprint sometimes, not just run the marathon. They need to be more than incremental once in a while. That means that for 2013, they have to make themselves a greater presence in the market. That means things like:
   1. Analyst Program – they are committed to an analyst program. I already know that. They have hired me to do something with them (speaking and advisory to some extent). But what they need to do is get a little feverish and spend the time doing the briefings, meeting the analysts at the events they are at, and doing a wide swath of briefings. Have the always personable and articulate Duke Chung hit the road and do an analyst tour in multiple cities.  Be visible to start this up.
   2. Alliances with large firms – they need to try to get in with more companies the size of Cognizant. The problem they have is that they don’t have an enterprise target market and thus the larger firms that they might ally with might be a rough hall. That said, there are several of them that are at least amenable to the mid-market and to a lesser extent the small business world. Plus there is the departmental value of Parature in the enterprise market. It does scale. However, while this is going to be rough, they need to try and line up one or two more like Cognizant.  They have some bargaining power with their incredible penetration into the public sector.
   3. Make a big deal of the public sector – This is a true differentiator for them and one that I was unaware of being as large as it is. Which is the crux of the problem. If I’m someone who is covering Parature and I was unaware of the scope of their public sector business, what about those who don’t cover it.  Yet, this is a highly coveted, made for marketing sector.  Hold events, write stuff about it, seize some thought leadership in the domain; get the mindshare. RightNow made a great business of doing that in their earlier days before they made a strangely done move from CRM to CXM.  That would be customer experience management if you don’t know what the X is. Here we have a solid CRM company in Parature that has the foundation in the public sector that can be a great story and there is mindshare still “available” in that space.

Next up: Xactly, Pegasystems, BPM Online, Lattice Engines, Clarabridge