CRM Watchlist 2014 winners: Customer engagement

Disparate in what they do, they all involve technologies associated with engaging customers or at least understanding what they have to know so that they can engage customers.
Written by Paul Greenberg, Contributor

Once again, I’ve managed to come up with a category that encompasses more than one of the winners.  But this one is a particularly interesting choice because honestly, most of the winners in this category don’t or rarely compete with one another. 

Yet, this category, which at least I’m calling customer engagement, cannot be dismissed either lightly or at all. It is an emerging market, unlike customer experience (italics are mine because it has some bearing on the reviews), which is a non-starter as a market, though a core concept for anything customer facing in the business world.  Hold that thought as you read these reviews.

Customer engagement as a market (and you will be reading a lot by me on this subject in 2014) is a market that actually has the potential, I’m excited and scared to say, to subsume CRM as a market. In time, we might see CRM become a part of this marketplace.  Might.  But while this may be a growing, roiling market as of now,  it is a largely undefined market and that leaves room for a company or two or more to seize the moment, plant a stake in the ground and define the market.   In lieu of that I’ll be doing it. J 

But for the purposes of this set of five reviews, let me define what customer engagement is in the simplest and easiest to digest terms (from my five-part series on Diginomica)

Customer engagement is “the ongoing interactions between customer and the company, offered by the company, chosen by the customer.”

It is (or should be) the key element of all customer strategies at companies as they continue their march through the 21st century, though as Graham Hill rightly points out, a customer focus, while a part of what makes a company successful, is not a guarantee of it.

Keep in mind, I’m not saying don’t brand yourself ‘customer experience’ if that’s the way you roll, but understand that it is not a market that exists for technology. Prospects are looking for tools that help them engage their customers more and better, not provide them with a better experience. Engagement is a combination of insight and communication between company and customer, which coheres with the communications revolution of the last decade plus.  Customer experience is how a customer feels about a company over time.

In any case, as I said, a lot more this year on that. Right now, I want to get to our winners in this group. There are five and a more disparate five who fit a category, there never will be.  Most of them are self-styled customer engagement or customer experience. Some I just put there because that’s where they belong.

The five are in alphabetical order:

  1. Clarabridge
  2. Medallia
  3. Moxie
  4. Thunderhead.com
  5. Totango

Okay, roll up your sleeves, get set to dig in. It’s review time.


I’ve known Clarabridge (who are local to me) and their CEO Sid Banerjee for about 5 years.  What blew me away about them is that while they’ve historically fallen under the analytics rubric, they took the discipline – particularly text analytics – to a whole new level and did so consistently over the year. Yet, their fundamental differentiator has never changed in all the years I’ve known them – and even though they’ve done it all those years, they still remain ahead of the rest of the market in what they do.

In a nutshell, they provide 11-point sentiment analysis.

Huh? What in the name of emotional responsiveness does that mean exactly?

To put it in the most simple terms possible (for I am a simple man), most sentiment analysis is based on a five point scale that I can pretty much guarantee you’re familiar with – positive; somewhat positive; neutral; somewhat negative; negative. That’s about it with some permutations in between. This isn’t survey data which can have 10 point scales too. This is sentiment analysis. Many of the relatively advanced engines are able to provide the workflows that allow alerts and routing associated with that five point scale – such as “if the person talking about this aspect of the brand is 1 or 2 (most negative) on that 5 point scale, then send Charley an alert and link to go deal with it.

Clarabridge takes that considerably further. By providing an 11 point configurable scale, it allows a business the ability (in any of nine languages) to determine, in effect, the difference between irritable and upset and furious – which makes a big difference in how you treat the customer with the issue.  Clarabridge is able to provide this and has customer success story after customer success story to support the claims.

But, if all they provided was a great product, they very well might not have made the Watchlist this (or any year).  But there is definitely more to them than just their product.

Driving their efforts are a strong management team led by CEO Sid Banerjee with a standout VP of Marketing, Melissa Pippine and a star Chief Product Officer in Nithi Vivatrat.  With others, this group has not only built this product out to be a leader in the market, but they have done what is for them a truly appropriate job at rebranding in 2013 around the concept of ICE – Intelligence Customer Experience (despite my prior entreaties, this does work for them).  ICE is defined as “creating a single voice of truth by leveraging sentiment and text analytics to convey intelligence into every aspect of the customer experience cycle.”  While this is a bit buzzword-y it does convey what Clarabridge products do.  They have been excellent at painting the picture of the outcomes that their products provide with case study after case study and result after result. The customers that I spoke with love the results that they get.

But there is more than that. They have been wise in how they engage external institutions and individuals. They have partnered well in the consulting/SI space with a key partnership with Watchlist 2014 Elite winner Accenture, who has their back, and other partnerships with CSC, and Deloitte, as well as customer experience star consultancy Walker Information.  All in all they have over 40 partnerships, though they could expand their CRM footprint even further beyond the Salesforce.com usual suspects. Their value is manifest across the board, and they should take advantage of it.

Aside from winning customers and charming partners, this is a highly decorated company.  They’ve been on Deloitte’s Fast 500 List, have won several innovation focused and trendsetter awards, industry leadership awards and of course, the Watchlist last year and this.

So, they have a great product, a strong management team, a somewhat valuable messaging and branding effort going on, solid partnerships, what is it that holds them back from the explosion that all the analysts who know them think they could have?

What they have to do

  1. Think outside the Analytics market box – When I say this, I don’t mean, the “Customer Experience Management market.” There isn’t one.  In the case of Clarabridge, their value proposition is unique and yet, at a practical level, so strong a value for the mainstream that they have multiple markets that they can play in. Obviously, given the biases of this award and thus, my biases, the most obvious is the CRM market, which is projected this year to be $23.9 billion by Gartner (I always wonder how they get it down to a tenth of a billion dollars) and by 2017, $36 billion.  This could mean top dollah for Clarabridge
  2. Refine the messaging – To that end, while their messaging around Intelligent Customer Experience (ICE) is actually quite smart – given their ability to read refined emotional states of customers – it needs some refinement of its own.  Keep in mind two things. First, a customer’s experience can be identified and interpreted but it, unto itself, is not an outcome. The desirable outcome for a business would be to get the customer to continue to interact with the company – an ongoing engagement,  using the insights that Clarabridge provides to help shape the kind of personalized experiences and efforts that a company and customer need to have to derive mutual value. That valued outcome based message is missing in the current rebranding. It’s a nuanced approach but an important one that makes their strong case even stronger.
  3. CEM means Customer Engagement Management, not Customer Experience Management - While CEM more frequently is the acronym for the latter than the former, that’s not really the point. There is no Customer Experience “market” while there is a growing Customer Engagement “market” that could incorporate what Clarabridge does, and unlike the CXM market which is a non-starter, the customer engagement market has enough of an upside that there could come a time it could suborn CRM to it as a market.  That big. They need to rethink that now.

This is more than a solid company with a good product. This is an excellent company with a superb product. They are Watchlist winners because they belong on it.  This year they have something to prove – and that is that they can be bigger than they really are. I’m betting that this is a win-win.  Let’s see if they can-can. J


Medallia is a first time winner, and a bit unexpected to be 100% honest. But what I’ve found is that they are a smart, intelligently managed and well capitalized (both revenue and Sequoia funding), company with some very good, well-constructed applications that actually are able to deliver customer insight and at the same time, key into critical workflows and business processes. 

Well done.

Medallia’s enterprise focus and scalability are notable.  Their customers are all larger enterprises with some deep penetration into what I call the “emotional verticals” – those industries that customers invest their emotional capital and are more sensitive toward their treatment.  For example, Medallia serves 9 of the top 10 hospitality organizations e.g. hotels.  Their scale is impressive. They have 40,000 users at the Hilton for example.  What I truly like about their products is not necessarily the ability to provide insights into customer behaviors – there are many companies that do that probably at least as well as Medallia. What they’ve done is tightly tied it to workflows and processes so that in effect a company could act on an insight in real time in a way that might solve a problem or delight a customer or put out a fire. They provided numerous examples of these kinds of situations in their submission. 

They scale too. In addition to the 40,000 users at the Hilton chain, they made note that they “touch over a half of a BILLION (caps theirs) people a year” -  with 500 million branded surveys to consumers. They have 500,000 users of their ecosystem across the customer base that login to Medallia a year and 8 million page views a month.  Meaning they can safely argue scale and big numbers.  Not megamega but big numbers.

However, its not just the tools that fuel their 50% growth each year over the last three.  Its how intelligently they seem to be managed.  They have a highly experienced leadership, some with the company from the beginning like co-founders Borge Hald and Amy Pressman and others who came in at the appropriate moments of growth – like the always excellent (and often underappreciated) Chief Marketing Officer Michelle de Haaff, a long time CRM industry veteran.  

They also understand the need for thought leadership in the field. Their particular contribution is the Medallia Institute, led by John Abraham.  The Medallia Institute has three parts to it:

  1. Customer Experience Management Certification training.
  2. Working with clients on “deep insight” projects (projects that need advanced analytics work)
  3. Development of cross-company benchmarks that can be utilized to measure success Medallia and practical performance.

What I saw over and over, with the caveats I’ll outline below, is that this is a well rounded company whose potential doesn’t rest with its technology, but with its approach (and its technology).

For example, one thing that I have to frequently advise companies on a growth positive path heading toward an impact positive future is that they need to formalize an analyst relations program, a press relations program or universally, an influencer relations program.  Well, with a caveat or two (see below) Medallia does that and regularly engages a small handful of analysts who represent different segments of the market.  However, they probably  need to expand this to well beyond a small handful if they are to get to the next level – whatever that means.  

This is a company that has a huge upside if they do some things that they aren’t doing, one or two somewhat dramatic. But even if they don’t, they are going to be succeeding as a significant player in the customer engagement market over the next several years.  Up to now, they have the pieces in place to blow a door or two off and at the same time, continue to just simply, well, grow. 

But to become even more than that, lets say that they could do with a little less modesty and a little more modesty and they could do a few things. 

I will explain…

What they have to do

  1. Do far better on the integrations with CRM – One of Medallia’s key claims is that they provide insight into customer behaviors. They also claim that much of that insight is derived from data in CRM and ERP systems. Yet, when it comes to CRM systems I can only find integration with salesforce.com as far as the most significant vendors go. So, there are two options here.  Medallia, if you have integrations and partnerships with CRM players already, say so.  OR if you are what I see, then go to work – now – on integrations with the obvious players like Microsoft, SAP, Oracle, Infor et. al.  This isn’t really an option for a company like you if you want to be a major impact player over the next several years.
  2. Develop partnerships with major consultancies/systems integrators – While its great that Medallia has partnerships with McKinsey and Bain, they need the technology partnerships with companies like Watchlist Elite winners Accenture and EY, or with a few smaller market-specific companies  e.g. Watchlist winner Solvis Consulting in Latin America.  This means bigger footprint in regions you already are in and go to market partnerships that land deals.
  3. Vision is mission; mission is vision – As those of you reading my stuff know, I’m a huge proponent of a strong mission and vision statement.  Medallia has what seem to be both, but they ID them for the reverse of what they are. Their stated mission “create a world in which companies are loved by their customers.”  Their stated vision “From a vision perspective, to work at Medallia, we believe that putting insights and actions into the hands of every employee across a business, can truly create customer experience improvements.” Their mission is their vision statement,  (see review of EY for their vision to put it into proper perspective) and their vision perspective is their mission statement.  I'd fix that. 
  4. Stop characterizing self as “startup” - Medallia is not a startup.  They were founded in 2001. They have an enviable revenue stream and excellent year over year growth. They have an expansive footprint. Calling themselves a startup, which they do, does them little good.  They are important enough to want to inspire confidence in their experience as a company, the maturity of their technology to accomplish things that businesses need accomplished.  Calling themselves a “startup” doesn’t do that. 
  5. Stop characterizing self as “disruptive” –They also need to stop referring to themselves as “disruptive” for the same reasons as why they shouldn’t characterize themselves as startup.  It does them little to no good. Plus, from my standpoint, that’s a term that gets thrown around rather easily be companies who want to claim it.  Salesforce transformed the technology industry – they were disruptive.  Amazon transformed how we purchased things and how businesses did their business – they were disruptive.  Uber has a shot at being disruptive if the model holds – which I think will.   Medallia, you won the Watchlist, which means you have a lot of impact – and that you do – but you do little service to yourselves calling yourself disruptive.
  6. Medallia Institute more thought leadership – There is a real opportunity for Medallia to make the Medallia Institute something more than it is – and it is already a smart and good thing.  While I know you have a strong NPS heritage at the company, NPS is past its prime, as more substantial measures begin to make their appearance. For example, the work at Georgia State University of Dr. V. Kumar on customer value that looks at the financial impact of advocacy on a company, taking NPS considerably further – though not as such.  Do work like that to establish new and more outcome, value-based benchmarks for the benefits of customer engagement and effects of customer experience. Ratchet up the work of the Institute to something more agnostic that will impact an industry.  Just sayin’.

Medallia is one of those surprise winners that delight me every year because not only are they an impact player now but the promise is there for years to come. There is work to be done, but clearly I’m betting that they do some of it.


Moxie has been a perennial on the CRM Watchlist winners list because, well, they are very good at what they do and they have a smart tandem, consisting of their CMO Tara Sporrer and their VP of Product, Nikhil Govindaraj,  who work together incredibly well as a team. They have been largely responsible for the excellent and extensive relationships that Moxie has in the analyst and influencer world. 

But there is more to it than that. For those of who don’t know it, Moxie started out as a rollup of multiple companies with the name nGenera until 2010 when it was rebranded as Moxie Software (It seems like so much longer ago than that). Prior to that, the then nGenera was perceived as a “social” company even though they were focused more on talent management in their earliest days, they were perceived as a “social” company (which they never really were per se). So when they bought CRM vendor Talisma in 2008, I got interested. Here was a social company buying a CRM company and not the other way around. Hmmm.

As it worked out, they sold off the operational CRM part of Talisma to India based Campus Management in late 2008 and kept the piece they had always been most interested in, the customer interaction engine – one of Talisma’s major selling points – and at the time, differentiators.

When they rebranded to Moxie in 2010, they also changed the character of the company. This change altered the impact they were having in the marketplace.  They seemed to have finally settled on what and who they were – albeit a bit tentatively.  They became a customer service focused knowledge management and social collaboration hub that engaged both customers and employees. I’m stretching it a little bit. It wasn’t quite this pat nor is it even today.  But that is basically what they do.

Their products are well constructed, solid and do what they are supposed to – not too much, nor too little.  In a nutshell, they describe them unwittingly in their submission with a succinct statement – “social knowledge allows ideas to become answers after they go through workflows, authorizations and approvals by the organization.”

This might not be the “only application that does everything” hype you get from so many vendors, but it is an accurate reflection of what reality is, even in the midst of business transformation.  While its not sexy hot, it takes care of what businesses need to get done to provide outcomes that benefit the businesses.  While social was hot, it became what you did.  It was seen, wrongly, as something that was going to replace traditional communications channels and in more let us say “enthusiastic” tomes, something that would democratize business to an extreme.  Well, that didn’t happen – and won’t for any future I’ll be around for. “Social” are communications channels that provide a set of avenues for customers to both converse in with each other and the institutions they want to converse with.  It also is a transmission belt for information – and has been instrumental in changing the way we create, distribute and consume that information.  It’s now mainstream. 

What hasn’t gone away and won’t are workflows and permissions, and responsibilities and governance and regulatory compliance and automated processes and business rules etc.  That means the operational processes that govern business flow.  They are necessary both to increase the efficiencies of action at companies and to guarantee the standardized responses and activities that both allow customers to get comfortable with a company because it is reliable and because compliance is necessary for businesses to not be fined and stay out of jail. 

Moxie gets that.  Note their way of describing what they do – ideas become answers. Answers. Not actionable insights – the buzz du jour.  They are not in the analytics business.  They are in the business of companies having the ability to provide the right answers to customers seeking them from the channels they are engaged in – and to make sure that these answers comply with corporate procedure and government regulation.  So pharmaceutical companies should at least in theory, love them.  Any large, complex B2C environment who are keen on self service should faint with the sheer delight Moxie’s solutions should bring them.

Moxie has been smartly aggressive in two areas in particular, which have borne different levels of fruit.

Influencer relations have been a near home run – at least a triple off the top of the left center wall.  Tara, Simone Souza, and Nikhil have built a network of influencers who are an all around A-list of the software industry.   They are known, liked and if they call, the phone is picked up or the tweet responded to. They have a wide ranging network – institutional, boutique and independent analysts, journalists and others who impact buying decisions and marketplaces.  

They actively sought out partners and are building their own partner ecosystem as well as participating in other partner ecosystems. So for example, in the former case they have a partnership build around an integration with Nuance’s virtual assistant. It’s a go to market (GTM) relationship so there are several joint customers. It is a partnership that makes sense in light of an ecosystem built around Moxie’s offerings. On the latter case, participation in the ecosystem of other companies, Moxie has a GTM partnership with Microsoft where there is joint activity and joint deals. Moxie, especially with Microsoft’s recent acquisition of Parature, has been positioned in the Microsoft ecosystem as the high-end knowledge management service solution for on premise.  Which might sound almost too granular,  but actually is a meaningful place for an enterprise sale or two.

But it also brings up Moxie’s greatest conundrum – they have a cloud solution but still emphasize on premise at a time where cloud solutions are grabbing increasing share of market and are certainly where the momentum is.  Gartner just came out with a research report which says that 49% of all CRM solutions will be deployed in the cloud by the end of this year (up from 32% just a few years ago) and this number will be over 50% by 2015. The momentum lies with the cloud and the deal capture rate favors the cloud by far.Moxie still isn’t clearly focused on where the momentum is and among other things, will need to do that to have the level of impact that I expect them to this year. 

What they have to do

  1. Focus more on the cloud – They have a cloud offering. You would barely know it though it stands as strong as their on-premise offering.  They need to invest time, money and marketing in the cloud offering to remain competitive. As much as on premise applications will continue to exist, the competition is in the cloud and they must play there.  Companies that haven’t shifted their focus to the cloud are losing ground daily.
  2. Reboot their thought leadership efforts – Moxie’s attempts at thought leadership have been clever, even a bit creative but so far not sticky.  I won’t go into details here, but they are going to have to start deciding what areas that they want to focus in on,  start building laser specific content and find a thought leader from their internal ranks in addition to all the things one does with third parties.  White papers, web apps, speeches, videos, audio (podcasts et. al). Time to go to town.
  3. Drop “social enterprise” as a business concept – The time for presenting social enterprise as a business concept is past for multiple reasons. As salesforce.com found when they started using, the charitable organizations who have held the honorific title to the term for a long while now, were angry about it and made it clear that salesforce needed to let it go. They did. Additionally, social business and the social enterprise are so last year, having been superseded by the broader business change - digital transformation - which is where we all should be thinking in 2014. 

2014 is a make it or break it year for Moxie. They have everything in place to make it and it’s going to be up to the new CEO to see that make it is the part that matters. I’m thinkin’ – yeah, they’ll pull it off.


Since I first heard of Thunderhead.com, as an analyst and now as both an analyst and advisor, I saw that this was a company that would be on a fast track.  Again, a company, not just a technology.  What made this company of 300+ employees fascinating to me was not only did they have what might be one of the best applications/platforms I’ve ever seen but it was solidly rooted in a conceptual framework that some of the smartest thinkers – both business and academic – have devised to derive value-based outcomes. That would be Service Design and Service Dominant Logic.  To go through the details here would probably be a bit much, but for reading on the subject of Service Design, check out the Wikipedia entry footnotes and for a myriad of readings on Service Dominant Logic (SDL) check out the works of Steven Vargo and Robert Lusch. proffers the idea of value in use – which pretty much means what it says. As Vargo and Lusch put it “Only the customer can determine value. Value is only created when a customer puts it into use.”  That differs with the more commonly employed goods dominant logic which says there is value in exchange. The difference in plain English.  GDL says the value is in the purchase of the item. SDL says the value is in the use of the item.  Super simplified but the best I can do for now.  Service design is the way that you plan and organize an institution and all the components of that institution (infrastructure, staff, processes, communications media, and compensation programs, ad infinitum) to improve the interactions between that institution and its customers/constituents. More on that here.

What gives Thunderhead.com its particular place in the market is that their best product, the Thunderhead.com ONE Engagement Cloud, is built to these principles which are personalized to Thunderhead.com via their Engage 3.0 framework.  The product itself is divided into three basic interrelated parts: ONE Connect – captures and measures the customer’s journey. For example, monitors each and every action of a customer’s response to a campaign; ONE Communicate – the content creation and delivery platform that allows a company to create and take actions that are relevant to a particular customer; ONE Collaborate – collaboration on creating proposals and other documents.  These are actually inadequate descriptions, but will do for now.  You have to see the applications in action to appreciate them fully.  The interfaces for the products are exceptionally nice and easy to navigate.  For more, click on the links associated with the product name.  What you need to know is that Thunderhead.com nailed the enablement of customer engagement and interaction.

The company also has a veteran management that comes from the technology industry and from academia among other places. Their CEO Glen Manchester is a well-liked and savvy CEO who has been in the business decades though is still under 50 years old and he’s either won or came in as a finalist for numerous entrepreneurial awards.  He is also, parenthetically, the best hugging CEO in the customer-facing industry J.  The CTO, Ray Gerber is a Pegaystems veteran and just simply builds really good technology products. To add to the mix,  Phil Venville, their SVP of Product Strategy is a former academician who knows how to build out frameworks e.g. SDL and service design.  So it is a smart, experienced team.

But that doesn’t mean they have nothing left to do. There is plenty to do that this fast tracked company needs to consider. 

What they have to do

  1. Vision needs to be more visionary – In their submission, Thunderhead.com stated that their vision is “to be the recognized leader in the field of customer experience and enterprise engagement through the restless pursuit and application of design and technical innovation.” While this is a nice ambition, it is far from a vision.  With a company like this, which has unique intellectual chops that are actually applicable to business, they need to do a lot better and with a little less verbosity, when it comes to identifying a true vision.  Adopt the EY Advisory model – “to build a better working world” which is short, a global future that has practical and executable underpinnings. Something that someone can see and buy into. Thunderhead.com needs to come up with their own version of something that follows this model. 
  2. Build out Engage 3.0 – Thunderhead.com has a conceptual framework that they are developing that might be unique. It has both intellectual chops and practical application. It is the core of where both the thought leadership they can provide (and thus get mindshare) and the practical infrastructure and practices can be developed.  2014 is the year they have to do both parts - establish the content (videos, whitepapers, market research, academic efforts e.g. coursework curricula) needed to both understand the framework and at the same time, show their potential customers - and interested parties - what they have to do to implement the pieces necessary for effectively engaging their customers (best practices, tools, techniques).  Thunderhead.com is eminently capable of this. They just need to take action. 
  3. One company, one message – They have a remarkably good legacy product that does document management – collaborative, compliant, secure document management that has HUGE traction in the financial services world.  But it is a legacy product.  Their customer journey management product is their future. I’m not saying get rid of the document management product – it’s still an excellent product, but Thunderhead.com has to recognize that trying to unify the message around the two products is a lost cause and creates market confusion. It’s, in effect, two separate companies that we’re talking about. Figuratively, of course – except its two separate messages with the lead messaging around customer engagement.
  4. Needs a CMO – Marchai Bruchey, former Chief Marketing Officer (CMO) of KANA back in the day, came to Thunderhead.com as their CMO.  But she was transitioned to Chief Customer Officer – which all in all is a good move for the company given Marchai’s fabulous skill set. While they gained a CCO, they lost a CMO and the lack of one shows (see #3).  Thunderhead.com needs a concerted recruitment effort to find a great CMO to carry their message to the marketplace – or their message will sit in the mud for longer than they want it to.
  5. The U.S. already – This is a company that has a huge opportunity in the U.S. market, not something I would ordinarily say to companies who want to be in the U.S. from overseas. Yet, unlike most of them, who are rehashing ideas/products that already are competitive in the U.S.; in this case, they are unique and span a wide variety of vertical markets and can be integrated into multiple technology vendors’ ecosystems. They need to be on the ground in the U.S. to make the business happen – with an office, U.S. staff etc. They have a decent chunk of U.S. business already, but they could do so much more.

Thunderhead.com is a different kind of company. They are one of those companies that evokes an emotional response be it, “wow” or “how nice are they” or “holy ____!”

This year, they have a great shot at establishing a long term potential dominancy in the customer engagement market, but it means that they have to go to the mat in order to get there. Will they? I’m thinking that they will, but it’s really up to them, not me.


Totango is a company that has been on a solid, steady and smart trajectory. While I had heard of them, I didn’t know much about them until they became a contestant in CRM Idol in 2012.  But we were suitably impressed. While they didn’t win CRM Idol, at the same time, we began to recognize the value that Totango had and the impact they could have.

For those of you unacquainted with them, shame on you. J  They provide what I will call value based user insights – with a focus around both tracking customer engagement and anticipating it.  They provide it with an interesting name – one that they call sensor based monitoring which is a rather fancy way of saying real time monitoring of customer interactions and the devices that the customers are using rather than, as they describe it, “a heavyweight ‘data aggregation’ architecture based on ETL batch uploads.”  Ohhh…kay.

I could go through a laundry list of what they offer. If you want to see it, go here. But if you remember, this isn’t an award about great technology. It’s an impact award for companies that I feel are creating it.  So let’s delve into that, though I will discuss a bit about their product a little later.  

Totango is not an old company – it’s been around just 4 years, starting its life in Tel Aviv in 2010.  But it has shown strong growth from the time it was born to now, with a 400% increase in 2013 from the previous year.  In fact, just recently (earlier this month), Totango announced a second round of funding totaling $15.5 million from 4 different venture capital sources - Canvas Venture Fund and InterWest Partners led the round, joined by its current Israeli investors Pitango Venture Capital and Gemini Israel Ventures, who drove the 1st round $3.8 million funding.

Totango has grown because it has done the things that companies need to do.  It has:

  1. An experienced management team led by Guy Nirpaz, Totango’s CEO, who is a top flight technologist. He was the Chief Architect of Mercury and IBM WebSphere.  They also have the former head of product management at salesforce.com, Kaiser Mulla-Feroze, a man I know to be very good at what he does.
  2. A good partner ecosystem, which includes companies like salesforce.com, Zendesk, Marketo, Eloqua, Pardot (which is salesforce now through the ExactTarget acquisition) and Hubspot.  Most importantly though, they have an OEM agreement with Jive, with Totango directly embedded into the Jive platform.  That is worth a boatload of credibility and, ahem, cash. 
  3.  A growing market presence which has led to several awards including the CloudBeat Innovation Award from Venturebeat and, of course, this one.  Please note the word “growing.”
  4. They have a high quality product that gets valuable results and that their customers actually like using.  They think of their offering as “smart apps” – applications that use transactional data tied to CRM systems (which they mistakenly think of as “back office”), real time social data that is monitoring a user’s web activity (not so much their Twitter or Facebook activity) and what is ultimately product usage data, which means pulling in what devices the customers are using in what way.  This is an excellent approach to what they call a Customer Engagement Management (still saddled with CEM acronym) application.  It helps ID customer interactions and with its integration to CRM systems can identify upsell prospects or churn candidates; hot trial users or established users who are reducing usage.  It does what it does well.

The OEM agreement with Jive puts them on the map (with the combination of things that they’ve already done of course).  But to stay on the map, they are going to have to do a few things – one or two that are dramatic. 

What they have to do

  1. Another one that needs to stop calling themselves a “startup” – Totango has this “we are a startup doing amazing things” “thing” that doesn’t suit them whatsoever.  They are at the stage where they have to establish credibility as a mature (or at least maturing) company that is providing the capability to support outcomes that businesses are looking for in regard to engagement with their customers (or prospects).  “Startups doing amazing things” may sound cool and hip and all-Silicon Valley-ish but it doesn’t inspire corporate decision makers with confidence. Lose that one.
  2. Expand partnerships to larger consulting orgs and/or systems integrators – They have made a great start to building the kind of ecosystem that will not only provide insights but also record them and indicate the actions that will be necessary to realize the value from those insights.  What they don’t have is the organizations that can expand Totango’s footprint by making Totango part of their technology landscape. That would be Accenture, EY Advisory, Deloitte, PwC, Capgemini, etc.  It could be the slightly smaller players like Cognizant, ITC Infotech etc. 
  3. Expand technology integrations – They tend to sloganeer around “Grow customers, fight churn” which is a fine slogan. But the message would, at least to me, suggest customer service.  However, their strongest integrations are with marketing automation applications (see above).  They have the Zendesk integration on the customer service side and, to some degree, the OEM agreement with Jive can satiate the lust, but they remain rather light on customer service. I would suggest a targeted set of customer service integrations among them Verint/KANA, Microsoft/Parature, etc.
  4. Develop an influencer relations program – They are known to a decent number of the industry influencers but Totango isn’t by any means top of mind. They have done a decent job of broad contact, but they are at the point that they need to formalize an influencer program. There are typically dozens to hundreds of companies who are known to the industry analysts so even with an interaction, it doesn’t signal a relationship.  Totango has the broad interest but not the top of mind interest that key companies have.  A formal, regularized program would suit them well.

Totango is new to the Watchlist and new to the world of impact, which means that the next two or three years for them is crucial in seeing how they are going to pan out as a company.  They have the right elements, no doubt, with solid leadership and good product chops, but that is only the beginning. They will have to take all the steps, even if painful at times, to retain the impact.  They won the Watchlist this year because it’s possible.  Let’s see them make it probable.

Well that’s it for this round. Note the interesting range of provided products, services and tools in the broadly labeled “customer engagement” group I put together.  How many of them do you see competing with each other?  That’s the point. Very few of them in this unformed market but fascinating category. Five excellent companies at five different stages of development, for the most part in what looks to be the same category but we shall see about that, shan’t we?  J  What we don’t have to see though is the quality of these companies. That is self-evident.

Up Next: The Marketeers: Hubspot, Marketo, Teradata Applications (formerly Aprimo). 

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