11th Aug 2010
RightNow CMO Jason Mittelstaedt explains to MyCustomer.com why his company repositioned itself away from the $13bn CRM industry.
RightNow Technologies wants to make a point. CRM is a bit old hat, it says. It’s got a bit of an image problem with the average man on the street. Nobody wants to hear about it anymore.
The on-demand provider instead believes that customer experience is where it’s at circa 2010, powered up by a mix of social media and knowledge management. And RightNow has got more than anecdotal evidence to back this up.
"Certain terms and topics only have so much life – there is nothing you can do to re-beautify a topic that is dead," says Jason Mittelstaedt, RightNow Technologies’ CMO. "This is the first year that Gartner is not having a CRM conference in the US. Last year the show was dead and as one of the premier sponsors we sat down with Ed [Thompson, Gartner VP and distinguished analyst] and a few of the others afterwards and told them that they were missing the boat – nobody wants to hear about CRM anymore because they have heard it all! I went to some of the sessions and these guys could have given the same presentation seven years ago. And everybody knows it. So this year they repositioned it as Customer 360 Summit and were much more aggressive with the customer experience and social piece."
The result, Mittelstaedt emphasises, was that the attendance was almost double the CRM show the year before. RightNow has itself, of course, chosen to distance itself from CRM, instead choosing to deliver products under the banner of CX - unveiled at the RightNow User Conference last October as the "big brother of CRM". While such rebranding is nothing new, the implication that CRM has had its day has ruffled a few feathers in the industry.
Mittelstaedt is keen to clarify this position. "CRM has served its purpose and continues to serve its purpose," he explains. "But if you ask somebody what CRM is, they will say ‘sales force automation’. I was talking to somebody at a show the other day, having a conversation about CRM, and they just could not comprehend that contact centres or marketers could be part of CRM, all they could think about was something for their field sales team. And for me that really embodies the challenge for CRM.
"CRM delivered on the decade-plus of innovation in terms of internal systems to enable bodies to operate business processes design. It is not failure for CRM to have survived and thrived for 15 years. CRM will probably live forever in terms of distinct sales, marketing and customer service processes. But a new era is upon us."
However, tellingly, he also adds: "When a topic is dead, nobody should feel like they have to keep it alive – especially if it has lived for 15 years. Let’s move one and get excited about the future."
Bursting at the seams
The fact that the CRM industry is estimated to be worth some $13bn, and continued to grow even through the recession, is neither here nor there. The future for RightNow Technologies now rests with CX. "It was a big decision for us to go away from CRM to wholly embrace CX," Mittelstaedt emphasises. "But what we found in all geographies was that CRM is busting at the seams. There is so much history of CRM being the internal system of your sales, service and marketing, as opposed to a customer interaction enabler, that all of this history was constraining the conversation and even constraining people’s thinking about what systems could do to enable their interactions."
The tipping point, he suggests, was the emergence of "new, exciting things" such as social media, knowledge management and feedback management that were developing around CRM but were not viewed as part of it by the market. From RightNow’s perspective, the market was struggling with how to think about the customer interaction layer and solution set.
The provider’s response was to launch CX last October, a "gamechanger" that Mittelstaedt believes has served to steer thinking from internally facing systems to externally facing systems. "It very quickly helped people understand the product vision - what is possible in terms of how they interact with their customers – so that rather than coming at it from the angle of sales, service and marketing, they are thinking about web, social, contact centre, mobile and all those interaction points," he explains. "I view CX as CRM’s big brother in that it includes all of the exciting innovations that are taking place that are consumer-facing that CRM can’t quite get its arms around."
"If you look at almost every CRM company in the world, they won’t have knowledge management - that is one of the unique things that we have brought to the market. Everybody has something that they bolt on but if you think about customer interaction you don’t bolt on the foundation of a house, everything has to be built on top of that. So one big innovation is the knowledge management, and another is the feedback space, which continues to explode but doesn’t really fit in to CRM. Most CRM companies don’t have a feedback solution. And then the biggest innovation is social – with the social CRM movement there is a lot of effort to connect the two, but if I take the eyes of the actual buyer, the person that is managing the brand and the interactions, they don’t think of that as CRM, it is not CRM to them, it is social networking, social interaction."
At the core
In the CX suite, Mittelstaedt explains, social is at the core, sandwiched between web and contact centre. And there is a reason for this – social is becoming a part of everything. "You think about web interactions or contact centre interactions – they are all becoming socially infused. You think about knowledge management – a knowledge management solution that doesn’t have innate social capabilities to get customer-driven content as well as corporate-driven content is not going to be competitive in another 12 months. So social is like mobile, though mobile is much further down the path, where everything has to be delivered via mobile today."
The industry seems to have responded positively to RightNow’s decision to reposition itself, with CX winning SearchCRM’s product of the year award, and the company also being named a leader in the Gartner Magic Quadrant for CRM Customer Service Contact Centres. Its Cloud Services Agreement has also attracted attention,
while in terms of performance it goes from strength to strength – after tracking around 14% growth last year, its growth has accelerated to 27% in terms of recurring revenue in its earnings call for Q2.
If there’s one disappointment within the company, it is that it failed to achieve leader status in the recently announced Gartner Magic Quadrant for Social CRM. "We’re in the number three spot in the quadrant [behind Jive and Lithium] and the reason we weren’t placed higher was because we bought HiveLive in October and so we only had about six or seven months under our belt which was too early for Gartner – they wanted to watch us to see how it comes together longer," says the CMO. "But in terms of the vision and the ability to execute they were pretty open with us that if we continue on the path that we’re on the quadrant is going to look differently next time."
Overall, Mittelstaedt believes there is "a lot of buzz in the market" about his company, while its customer experience positioning is "right on… it’s giving people inspiration with their customer strategies."
So is CX the next CRM? Is RightNow pushing both a product and a category? While CX appears to pass the tradeshow test, Mittelstaedt dismisses the notion that his company is seeking to create new acronyms. "It is the name of our product, the name of our vision. We have seen Forrester call its big customer experience events 'CX' – and those shows are bursting at the seams. There is movement around customer experience and 'CX' is catching on as an abbreviation for it but my intent is not to create a category, my intent is to represent our solution in the most approachable fashion in the market and differentiate it from the prior generation of solutions.
He concludes: "As I look down the road, I think CRM will be reborn under another name in the future. I don’t know what that will be, and frankly I don’t care what it will be. All I know is that CX is working well for us in terms of explaining what we do in the market and helping us sell more stuff."