CRM Watchlist 2015 Winners: Customer Engagement Part 3

We continue to take a look at the CRM Watchlist customer engagement grouped winners, Pitney Bowes, Thunderhead and Totango. All three have unique value propositions - I doubt they would ever compete with each other.
Written by Paul Greenberg, Contributor

Hey, I know its been awhile but between the conference circuit, writing my book, doing client work, trying to be a good spouse and father to 6 cats too, and a myriad of other "woe-is-me" excuses a.k.a. first world problems, I'm behind schedule in producing my always...long Watchlist winner assessments. Normally, I'm done by March 31. This year, I'll be lucky to be done by July.

In any case, this week we have three seemingly disparate companies who are each part of a different segment of the customer engagement ecosystem. To be transparent, two of them, Pitney Bowes and Thunderhead are my clients. I know Totango because they made the semi-finals of CRM Idol back in 2012 when they were just a wee little outfit - and look how big they've grown! All of them deserve their win. All of them have work to do. Both Pitney Bowes and Thunderhead claim to be customer engagement platforms - but both are very different animals. Totango claims to be a customer success management application - and it is that - and thus, it has a different take on customer engagement too. All of which will be revealed in due time.

Okay, the music is now playing. May I have this dance?

In alphabetical order.

Pitney Bowes

There probably isn't a person out there who at one point or another hasn't either heard of Pitney Bowes or hasn't used one of their postage-related machinery. Hell, enough of you have to help them sustain a $4 billion business that has been focused on that very hardware-centric line of business - and they've been doing it since 1920. They have owned more than 2,300 patents in mostly mailing and shipping, but significantly, also in customer engagement. In other words, they have been the leaders bar none in mailing and shipping hardware for decades and were happy to be known as that too.

Until now.

Pitney Bowes doesn't want you to look at them that way anymore. While they understand that their hardware business is a cash cow and deserves to be both maintained and evolved, they are radically revamping the entire company to be seen not as a hardware company but as a company that is focused around fulfilling the needs of 21st century business by providing what that business needs to keep their customer engaged.

Yes, mailing was critical for traditional marketing, no doubt, but starting in January 2014, Pitney Bowes (PB) took it a whole other direction - though one with a legitimate logic - by welding together a customer engagement solution and creating a group run by the excellent (and highly personable) Greg Van den Heuvel within their Digital Commerce Solutions (DCS) division to focus on the customer engagement solution to the exclusion of all else. Others would handle the "other" parts of the business. This baby was out to jump into a nascent customer engagement market that held unlimited potential.

Of course the tricky part of any of this kind of great leap forward is the narrative to establish and sustain it. A company is only as good as the trust afforded it. To maintain that trust, if there is something that changes what has been a decades long legacy, that "something" needs to be explained to the existing customer base and to the world at large so that they can understand the continuity of the signature story of the company undergoing the transformation. Don't do that, and trust is lost. Do that and the world is potentially putty in your hands.

So how does a company like Pitney Bowes tell their transformative story without losing their historic narrative thread - the one that the customers trust them for?

That's where the Digital Commerce Solutions come in. Not just as a story, but as a portfolio that can be the container that pivots Pitney Bowes with the customer engagement solutions being the specific pivot point.

The narrative runs something like this. Digital Commerce Solutions covers the following:

  1. Customer data management
  2. Customer engagement solutions
  3. Location intelligence offerings
  4. Shipping and global e-commerce solutions

What makes this portfolio important is that it bridges their hardware as well as provides them with their future and the justification of and alignment with the transformation of the company.

To understand how well they've crafted their narrative, I'm going to reproduce something from their Watchlist submission:

"Our success in customer engagement is due to our focus on integrating with leading 'systems of record' to create rich highly personalized customer communications across both physical and digital channels...

'The market for Customer Engagement has transformed itself multiple times. Marketing and operations teams approached customer engagement in similar but siloed fashion. Both began with print and mail fulfillment. Operational teams used document automation technology to produce printed business communications via batch processes. Their primary driver was regulatory compliance and cost reduction. Marketing teams purchased prospective mailing lists to generate non-personalized, printed, direct mail via batch processes. The key success metric was response rates. Neither team interacted with one another yet both were communicating with customers.

"Today operations teams use customer communications management solutions to produce multi-channel business communications via batch and real-time processes.... Communications for both the past and current state are founded on the 'print' paradigm but that is changing rapidly due to the demands and choices of the customer at all points in of the customer journey"

The section goes on to describe the demands that the 21st century customer is placing on business and what businesses have to do to meet or at least intersect with the demands.

This is an inkling as to why PB won the CRM Watchlist for 2015. They have the narrative in formation and they are doing what else is required both in thought and execution to have the impact that they will need to sustain over the next few years.

What does that mean, Paulie? Glad that you asked, kind reader. You're the best!!

The implications of a cohesive narrative are that you will have an appropriate and consistent

  1. Vision ("Help our clients achieve their greatest commerce potential through effective engagement across the customer lifecycle") - It could use some wordsmithing to be a bit less awkward and kludgy but is consistent with who they are.
  2. Mission ("Helping companies power billions of digital and physical transactions in commerce")
  3. Product portfolio (See below).
  4. At least modest track record (referenceable case studies)
  5. Culture that sustains this - they are undergoing a major cultural transformation (no time here to talk about it) led by the CEO Marc Lautenbach. You'll have to just trust me, they are doing it well.

The products are aligned well with the vision, mission and narrative. You may think, well, so freakin' what? Why does a customer care if the story aligns with the products. Well, if you asked the customer they may say, what are you talking about? But reality is that if you say something that has something that needs to be delivered associated with it, you'd better deliver that something if you want to garner trust. Let's put it this way. If you go to buy ice cream at a store that has taken pains to claim to be the best ice cream in the world, and it isn't a great ice cream, you won't buy ice cream from them anymore. In our universe we've heard it as "meeting expectations" and "context."

There are three distinct product lines available to support customer engagement.

To begin, they provide customer information management systems that handle data - the acquisition of data, the data quality and cleansing, the augmentation and the "analytics services resulting in actionable insight" (this is the mantra from most analytics providers - it means our data results can be used to gain insights that can be put to use). Location intelligence services are part of the portfolio. The analytics are designed to show marketers in particular but others too, what they rightfully call the "best next action." A sidebar is in order.

You'll note that they call it the "best next action," not what EVERY OTHER VENDOR calls the "next best action." When I first saw this I went "Huh. Must be an error." But think about it. They are totally right. "Next best action" can be taken to mean the second best result or the penultimate activity. Best next action is what it should be. So, other vendors who provide this in theory and use it in marketing, fix it. Its BEST NEXT ACTION, not next best action.

Okay, they also offer customer engagement solutions explicitly. Their engagement solutions are focused more around multimedia and omnichannel than say, the customer journey a la Thunderhead. So recently, to enhance this capability, they acquired Real Time Content, a company that produces highly interactive personalized videos on most any subjects. On the one hand it addresses something of interest that you have indicated you have that interest in. It aims explicitly at you. On the other hand, you can interact with the video and have it go in the direction you want to - and do that in real time. Additionally - since there is no third hand - you are providing a huge stream of personal data to them by making the choices you make. This can be translated to some further action in conjunction with other data in real time. Cool and useful and indicative of their engagement thinking and efforts.

They also even more recently, May 5, acquired Borderfree, an ecommerce provider, aligning themselves with a recent trend around customer engagement to incorporate ecommerce into the technology ecosystem. This follows the 2014 acquisition by SAP of one of the ecommerce market leaders hybris.

Finally they provide a communications delivery platform that manages the delivery and distribution of the physical and digital assets across all channels.

All of this leads to a big future potentially for this resource rich and committed company - one that can be exponential. But as with everyone on the Watchlist, there are things to do.

What they can do

Overcome legacy impression - Despite the cohesiveness of the narration, the elements in place, they still are seen overwhelmingly as "the postal meter company" whether it's a digital postal meter or not. They have to paint vivid pictures through the release of thought leadership pieces, videos, case studies etc. Boldness to overcome the embedded legacy issue is the mandate here.

Aggressive marketing around engagement solutions - As you saw in the discussion around the customer focused technologies they have, they have some real chops. Plus a specifically interesting value proposition. They have to get out there and market using their own tools with a highly directed set of efforts that includes the above mentioned thought leadership.

Expand especially the systems integrator portfolio - They are quite clear in their perception that their solution is one that not only can but needs to integrate with CRM solutions. They have to continue to build out their partner ecosystem with the CRM providers and with the consulting companies/SIs

A more organized analyst relations program - To be clear here, Pitney Bowes has an analyst outreach capability. They have a budget to sustain and even grow their program. But what they don't have is a well oiled highly organize AR/IR program. They need to start thinking more boldly with outreach to influencers who aren't traditional analysts. They need a regularized briefing schedule for the analysts they speak to. They need an experienced staff of more than one. They are big enough to start thinking of an analyst summit. All in all, they need to be focused, organized, and effective - as effective as Adobe's staff or SAP's or Salesforce's AR staff are (among others) and the same size.

Bring together the users - I'm not going to elaborate here but let's just say a $4 billion company that doesn't have a big user event or at least a notable user event is actually lagging. Its time for them to focus. Make it like Oracle CX was this year and focus around their DCS work, if they want to narrow it. You've seen my writing on the benefits of these conferences here. Time for PB to commit and do one in 2016 if possible.

The potential for this Watchlist 2015 winner is boundless. The bounds are there because they were 95 years in the making but they were good bounds. But all good things must come to an end. In this case if they can do that - they are replaced by great things.


Thunderhead came upon the scene 14 years ago. But then they came upon the scene again about 3 years ago. Fourteen years ago, they became a serious player in the then hot document management space by developing a document management product that was collaborative, secure and enterprise ready. It had a big impact particularly in financial services. If my memory serves me, they had 9 of the top 10 financial services companies in the UK as core customers. They competed with and often beat Microsoft's SharePoint product in head to head battles. They did well and established a solid business.

But three years ago, ahhh, three years ago, they came up with something that is, in reality, a completely different business that needed a completely different business model. That would be their One Engagement Hub platform - a customer journey focused technology platform. Its not the quality of the platform, which is pretty damned excellent, but the thinking that led to its creation which is of interest and why Thunderhead has been a consistent Watchlist winner for the last two years.

What makes this company unique in the customer engagement universe is that they have developed a full bore customer engagement framework that they call Engagement 3.0 which is a "synthesis of...marketing theory, behavioural (UK quote) economics and psychology, especially the field of Service Dominant Logic, and the concept of engagement as a psychological/motivational state." This framework, developed in conjunction with uber thought leader Esteban Kolsky of Thinkjar, is the only one of its kind. Potentially, it can play a unique role in helping to define the engagement market.

To "make" a technology product-related market (the word used for someone or something defining the market category and terms of the market), you don't have to have created the first product in that potential market. What you do have to do is:

  1. Have a product or suite or platform that can sustain its location in this new category.
  2. Develop a defining intellectual framework for the market.
  3. Develop content to justify the framework.
  4. Develop a body of practice to support the framework.
  5. Have customers who provide public, high profile proof of concept
  6. Go to market with not just an idea of capturing market share, but also mind share.
  7. Be prepared to invest substantially in things that might not provide you with immediate revenue benefit (a derivative of #5)
  8. Be highly visible as both technology provider and thought leader simultaneously which means capture the attention of customers, analysts and other vendors, AND other market watchers.

There are other things that you need to be and do but those are the minimal basics. Unlike literally anyone else I know of, Thunderhead has #2 and a little of #3. They have all in all, #1, #2, sort of #3, and modest amounts #5, which puts them ahead of anyone in or around the customer engagement market when it comes to definition. But you aren't a market maker until you've done all of what I say above. Thunderhead is consciously moving forward on that idea. At minimum it makes them a very interesting company. Maximally, they become a market maker.

But it isn't just a great framework. They have a solution they call the One Engagement Hub that is without a doubt, the best of the customer journey solutions in the market. To describe it briefly, it can represent ("see") the customer journey in all its unevenness, its individually distinct paths, its sloppiness at the scale of millions of customers acting at the same time, or down to the level of a single customer - and they can interact with that customer. They can work in batch or real time. They can capture the data and with integrations tie it to a CRM system of record. They can provide you with the journey "maps" that you need to ID possible issues in how you've handled or created the journeys that the customers are on. They are looking to, in a way, to be able to eliminate predictive analytics because the analysis of the journey and the insights needed to take action would, if they had their way, be done in real time. Needless to say, predictive analytics aren't going away anytime soon; in fact, it will be more frequently used to make business decisions when customers are involved. But the concept is good.

Thunderhead isn't starting with nothing either. They have over 70 customers with a strong presence emerging in media and entertainment, and retail. They have a strategic partnership with the folks at Microsoft Dynamics, where their product offering is seen, not as a product, but as glue that binds the Dynamics product ecosystem together (which, BTW, is the way that ecosystem thinkers think - its not another product in the list, it's a glue for a dynamic matrix).

The product which really has to be seen in its full ooooh-ahhhh glory to be fully understood, is focused around journey management - tracking millions of customers or one customer as they or he/she travel on their uneven, messy paths; personalized conversations - interacting with those customers at multiple strata levels as they are on the road; and smart content - making sure that the appropriate content reaches the individuals that would most benefit by it. That's a very dry, but I think succinct definition of what they offer.

Again, all that is wonderful but never enough - because execution, execution, execution is the key, key, key.

To that end, Thunderhead does a good job but there is more to do. They have a powerful North American team led by CRM industry veteran, the always excellent George Wright; they have a strong C-Suite team in London led by founder the incredibly personable Glen Manchester, with the far more than just capable support of SVP Strategy Phil Venville, the Thunderhead architect of Engagement 3.0 and Ray Gerber, the CTO who developed the One Engagement Hub suite. They have a solid analyst relations program that keeps a regular "cadence" - an analyst relations professional favorite word - with a wide array of influencers on a regular basis thanks to VP Kirsten Ogilvie. They have a staff that seems to, for the most part, enjoy their life at the company judging from conversations I've had with current and ex-Thunderhead staff. They have an aggressive marketing strategy with a good plan and some solid distinctive execution already done. Even though some of it has been a bit rough around the edges, they are in a far better place than they were a year ago when they didn't do any strategic marketing at all. They still need a CMO though (see below).

What I'm saying, in essence, is simple really. This is a company on the rise and has been for the past couple of years. Its showing no sign of slowing down as the market they've chosen to participate in has heated up enormously. But of course, how remiss would I be if I didn't have a few things for them to do.

What they can do

Up in lights - As noted above, this is arguably the first company I've seen in a while that has a chance to define some market category. A chance. The last one I know that did that was Radian6 who made the social listening market. As I recently found out Gainsight in conjunction with Gartner defined the customer success management category. So, these are doable things. But what Thunderhead doesn't have at the moment is the kind of marquee customers who are big name, sexy companies who are willing to put the Thunderhead name in lights along with theirs. To wit: recently Microsoft has been running an ad on TV with the use of the Microsoft Cloud with Real Madrid. Its one minute, its day in the life and its powerful because it's proof of concept from a very sexy customer. It's the real life use of the product as a day or week progresses. Thunderhead needs several of these marquee customers to not only prove the point, but highlight the power of the outcomes produced - and the customers, one way or the other, have to be cool .

Expand the strategic - As of now, they have a small and valuable partner ecosystem and are part of one significant ecosystem - Microsoft's and a partner of growing importance in another's channel - Salesforce. They have to grow out both their participation in key players ecosystems - SAP is the one that comes to mind next but there are others; and they have to develop their own ecosystem. Time to do the exercise on ecosystem building - which is the who do you want to be in 2017 exercise and how are you going to get there - natively and with partners. This is an imperative for Thunderhead if they are to reach the next level of growth in a reasonably short time.

Don't roll on marketing - From the beginning of 2015, Thunderhead developed and started to execute on a highly strategic marketing program that has proven to be both attention grabbing and controversial to some extent. Regardless of the opinions of the controversial aspects (mine included), they have to both maintain their aggressive marketing but also measure and learn from what it has been this first half of the year. That means continued strategic thinking. That said, to do this, they will need a CMO and should hire one as a priority effort. In corollary, they need to develop a much more visible presence in social channels. They aren't even at the level of a blip on the radar there with engagement levels at close to nothing. This is a problem to be overcome and overcome right away. Much as we all decry the hype of social, which had been massive before it went to the mainstream, its now in the mainstream and building a presence in those conversations in those channels is an important part of communications and marketing strategy.

Thunderhead has a HUGE potential upside. One that can just keep giving if it can get the components in place it needs to. But that isn't guaranteed. That said, so far, so good and that's why this fascinating company made the Watchlist the last two years. Like other companies on this list, I expect them to win next year, or they wouldn't have won this year. Let's see what they can do. I have faith.


I've known Totango awhile because of their participation in CRM Idol, and because they won the CRM Watchlist for the first time last year, though, honestly, I can't really say that beyond the Watchlist due diligence (which is pretty extensive I have to admit, humble bragging), I've had any real relationship to the company other than some monitoring and tracking.

That is about to change.

There are two reasons for that, one that is related to them, the other to their market. Let's start with the latter.

Customer Success Management - Market in the Gloaming

While I was researching the customer engagement technology matrix for my upcoming book on customer engagement (duh), I ran across a component that had surprising legs. It was customer success management. This wasn't just a technology niche but an actually burgeoning tech market that aligned itself with a legitimate trend associated with the changes in the customer's relationship to the company.

While I can't go into extensive detail here, the best way to understand what in the name of...choose your deity...I'm saying, is to think about this.

When customers became more demanding, they changed how the buying and post-sales cycles worked. The sales person initially became a contact point, not just a sales person. They were responsible for not only the effort leading up to the deal and the contract arrangements, but were, as far as the customer was concerned, the person to go to for customer service issues and problem resolution. They were also subject matter experts. They became account managers.

Well, needless to say, not a lot of sales people are good all that, though of course, since great B2B results at least are reliant on great relationships, there was a natural inclination to provide those capabilities without interrupting the sales person's normal routines and cadences. Account managers weren't the ones to do that, because they were compensated in traditional revenue-results ways. A new job description associated with a new compensation model was necessary. Thus, in a far too pat explanation than is actually true, you have the appearance a few years ago of the customer success manager.

The customer success manager is assigned a number of accounts and basically told that their job is to make sure that the customer they have under their wing is happy and is optimally using the products and services that are provided by the company. There is an element of customer service - they take care of problems and get answers to relevant questions; there is an element of sales - they suggest what products might be of value; there is an element of buddy - they are spending enough time with the customer to literally and figuratively be their friend and companion; there is a critical component - if they see a broken process, whether it is associated with their products/services or not, they are empowered to highlight it and suggest solutions if they feel comfortable in doing so. Their compensation is usage based, not revenue target based. That frees them up to be that point of contact and solution.

Customer success management technology is a bit different but associated with the same idea. Your customer's success is your success is our success (Totango). There is a highly specific approach that I think Totango describes extremely well. Here is what I would define as customer success management technology in Totango's words:

"Totango's expertise lies in operationalizing customer engagement data, unlocking 'buy' and 'churn' signals from it, and then making it actionable to drive key business processes across sales, marketing, support and customer success."

The translation of this into technology is in Totango's eyes the management of the customer journey. What are all the points across the journey? How is the company doing in its response to those customers over the whole journey and across each point in it? What insights can be gleaned from that information and then applied? How well is the company doing overall in its engagement of customers?

I'm not going to go that much more deeply into the broad technology since I don't have the bandwidth here (and I'm tired) but here are two posts from the key analyst following the space, Forrester's Kate Leggett, who I guarantee you can trust totally. She is one of the best. Read this one and this one.

Now back to our winner, Totango.

The above are all important questions that Totango's technology answers and then some. The architecture of the product set is based on Hadoop and it allows them to collect live data streams from applications in particular. They integrate with multiple CRM solutions (see partner discussion below for who) so that it is possible to understand the customer via both the engagement and transactional data and use the analytics capability of the product to support the kinds of insights that bring value. They had multiple customer examples (under NDA) that showed just that.

The most interesting and perhaps significant part of their offering is the Health Score - a visual and numerical representation and analysis of how well a company is doing when it comes to engaging their customers. Let's just say, in the interests of brevity, their health scoring approach is maybe their most awesome part of what they offer.

But as I've stated over and over again, a company doesn't win the Watchlist on good or great technology alone. It has to have the corporate chops to have a sustainable impact over a period of years, including the year just past. Totango does that with a highly experienced management team led by Guy Nirpaz, a firm grasp on the idea of thought leadership and mindshare as they begin to help define the customer success category and a solid technology partner ecosystem (see below) which indicates that they know that we are a world being driven by the need to provide ecosystems for customers. Technologies don't stand alone much any more. This is a company that is consistently growing with hundreds of customers over the last two years including a significant segment of fast growing high tech companies. They are well aligned with the realities of the economy, customer need and the requirements of market definition.

But, of course, there is much to do yet to reach that next stage.

What they can do

Proactive and programmatic outreach - As of now Totango's analyst relations program isn't a program. Its more of a moth-like opportunistic attraction to the analysts who are lighting the customer success flame. While they appear to be happy with where they are re: analyst relations, the reality is that if they want to be the market leaders - and they are competing at the moment for that with a very strong Gainsight - they need to be proactive with the analyst/influencer world and develop a formal program. The customer success management market is a nascent one, as Totango rightfully points out, and there are a number of players in it at the moment - call in about two handfuls if we stretch it a little. So there is an opportunity to be a market leader and even a market maker, the way that Radian6 was when it came to social listening. But to do that, there has to be consistent outreach with as the AR pros call it a regular "cadence." They have nothing like that. Time for that to change if they are serious about leading the market.

Start partnering up - Totango, when it comes to technology partners has done well - OEM with Jive; tech/integration partners with Salesforce/Pardot, Zendesk, Marketo, Eloqua/Oracle, Hubspot and Zapier. But what they don't have and need to crack sometime in the next 12 months is at least one significant systems integrator/consulting firm who can take them a level or two up into deals. What they provide is something that SIs should have a real interest in (EY, Accenture, Deloitte, PwC take note) and they have a product that is genuinely meaningiful in a world that is being digitally transformed. For Totango the next level given that they are in the midmarket and have interest in larger markets, this is the piggyback they need. So....

Be aggressive, don't oversell - Last year, Totango expended a lot of energy calling themselves a startup when they clearly had gone well beyond that. They seem to at least have reduced that. Now, they have some solid marketing. They are producing good content focused on trying to be the thought leader and market maker for customer success (see their customer success manifesto which, while I think is noble and a solid way of establishing a principled foundation for customer success a la Totango, isn't entirely realistic, but we can dream can't we? However, that said, I do like it.). But they are also getting a little bit too dramatically overstated. They think that their technology "is the 'holy grail' for cloud software and their vision of the future." They want to make Totango "the" system of record for customer behavior and apps engagement data - again a HUGE task and an apparent replacement for CRM systems which are very good at storing and parsing all customer data, transactions and interactions. Its what they do - and they are making the adjustments to handle live data streams etc. to do that with 21st century data. That's not really the point though. I think they are just beginning to oversell - and while its due to a laudable desire to be a leader in their field, they have to temper the aggression so that the market's expectations aren't so high that they can't meet them. No one is the "the only one who" these days - because unless they've created a new element for the periodic table, I guarantee someone is doing what they are in some way. So temper the overselling and just sell.

I like this company. I always have and looks like as my thinking goes now at least, always will. They are in a position to be a leader and maybe even the leader in a market that is just coming around. They have a ways to go before the claim is more than just a claim, but if they do what they need to and if they continue on their path, the customer success marketplace will be even more interesting than it has been - and its been really interesting.

All right, everyone. See you soon with another episode of CRM Watchlist. Au revoir for now.

Editorial standards