However, the results of the 2010 Customer Experience Impact Report by Harris Interactive and commissioned by RightNow are both interesting and not necessarily self-serving to RightNow. Plus, they include some infographics and we recently had some discussions here at work about using infographics a bit more. Here was my chance.
And here are the infographics.
As for the research, RightNow is holding its annual North American user conference this week and released some of the study results as part of the show. The data makes a pretty compelling argument for customer service’s impact on the bottom line.
For example, in addition to some of the claims in the infographics, the research notes:
So people will become customers thanks to your customer service reputation, pay more for your products or services, but they’ll also tell others about what you did wrong and only return if you apologize or make it up to them.
Good customer service is generally accepted as good business practice, but it’s always nice to have some research, sponsored or not, to back that up.]]>
Right now today, I’m wondering how much that will influence purchases by potential customers and how (or whether) those competitors will respond.
The move has brought some very positive press for the company in the past 24 hours. It’s been called “a game-changing play in enterprise software” by Frank Scavo, “a step in the right direction” by Vinnie Mirchandani and “genuinely important” by Paul Greenberg. Those are just a few of the favorable reports.
Certainly RightNow’s “Cloud Services Agreement” provides benefits to software buyers: seat months similar to rollover minutes in the wireless industry for seasonal businesses; the ability to adjust the number of seats based on need; the ability to terminate contracts on an annual basis; cash credits for not meeting SLAs.
As Scavo writes:
RightNow’s move brings it closer to a model of pure utility computing, where the customer pays only for what he uses, as is the case with electrical utilities. Sure, your electrical utility levies some base charge to cover the cost of provisioning and maintaining the customer’s connection. But most of the cost of electrical service to the customer is usage-based. You use more, you pay more. You use less, you pay less.
Really, much of this is what SaaS CRM vendors have promised and touted all along but — as Gianforte noted yesterday — never delivered.
But are there really businesses out there that are paying for annual licenses for seasonal workers? If so, they should get someone else to negotiate their SaaS contracts.
Being able to get out of a contract each year is certainly an advantage over a three-year lock in, and way better than paying everything up front for a system that may not work out, a la on-premise. But I always figured signing up for a longer-term agreement meant a better deal for the buyer. Does that discount come off the table for RightNow buyers?
RightNow has introduced some flexibility into SaaS contracts and that’s a good thing. Yet, how much of a difference does that make in the decision process?
As Greenberg wrote:
What might have gotten lost in all the buzz around this effort was – companies are still going to be looking for functionality – first and foremost. Then, after that, all things being equal, the differentiator is the relationship you have with the vendor, which of course, is reflected in the kind of contract you have with them.
Ken Harris, CIO of Shaklee, one of the customers RightNow brought on stage yesterday, said contracts can be a deal breaker for him. He said he’s backed out of some deals with SaaS vendors because of disagreements over the things RightNow is guaranteeing.
It seems to me more likely that rather than choosing RightNow over competitors thanks to the Cloud Services Agreement, they’ll decide which software they want and then demand these sorts of concessions from those competitors.
That’s just what Forrester’s Liz Herbet suggests:
Firms should ask their other SaaS vendors for similar terms and expect leading SaaS providers will follow RightNow’s lead.
So what’s in it for RightNow? It will certainly shorten the sales cycle if all these items are taken out of the negotiation. Gianforte claimed the company already has one $1 million plus deal thanks to the agreements. But if buyers can ultimately get the same deals from RightNow’s competitors it’s not much of a competitive differentiator, whether those competitors offer these arrangements publicly or do it privately when negotiating contracts.
Enterprise software buyers have lost a lot of negotiation power due to all the consolidation in the industry. SaaS, cloud computing, third-party maintenance and the victory of SAP user groups and key accounts in SAP’s Premier Support fiasco gave them some of that power back. Looks like RightNow just gave them a little more.]]>
The past year has seen a wave of integration and innovation with social networking sites and CRM platforms. NetSuite jumping on the bandwagon is nothing new.
NetSuite has teamed with InsideView to integrate InsideView’s social media monitoring into the NetSuite platform. Again, not really new. InsideView already has a similar application on Salesforce.com’s AppExchange.
What is new is the way NetSuite went about it and that it’s pulling social media monitoring into its ERP system.
That NetSuite turned to an outside company for social media intelligence is interesting. InsideView monitors Twitter, LinkedIn, Facebook, Jigsaw and editorial sources such as Thomson Reuters, among others and provides users with results relevant to their role. As social media monitoring and collaboration tools become a requirement for a CRM system, the CRM vendors need to figure out how they deliver that technology — developing, partnering or buying.
We’ve seen each approach so far. Oracle was among the first, creating its Social CRM applications, separate modules like Sales Prospector and Sales Library, that essentially serve as collaboration tools for sales people within an organization. Others have built out integrations to social networking sites. RightNow has built a connection to Twitter and YouTube it calls the Cloud Monitor. Salesforce.com has also built integrations between Facebook, Twitter and its customer service application (throwing in ask and answer functionality) it calls the Service Cloud 2. Salesforce.com obviously has some high hopes for the application because CEO Marc Benioff devoted most of the very expensive stage time he paid for at OpenWorld to demonstrating the Service Cloud 2. Microsoft has added Twitter integration with one of its CRM accelerators. Apparently, even SAP is preparing to roll out Twitter integration.
Acquisitions, so far, have been relatively few. RightNow, apparently tired of giving Lithium all of its community building business, acquired HiveLive and is incorporating community-driven customer support capabilities into its own suite.
The size of some of these social media start ups (HiveLive cost RightNow just $6 million), would indicate that more such acquisitions are in store. As John Ragsdale, vice president of technology research with the Service and Support Professionals Association, said at the time of the HiveLive acquisition.
“Partnering is just not enough. That’s what this proves. Buyers want more than a partnership.”
So, who’s next? Well, there’s a plethora of small social media monitoring and social networking companies out there. Even the largest social networking sites are getting attention. SAP has invested in LinkedIn via its venture capital arm. I won’t speculate other than to predict more consolidation in the technology business, a prediction that never fails.
And maybe we’ll see some interest in integrating social networks with ERP. NetSuite and InsideView are betting on it.
Mini Peiris, NetSuite’s vice president of product marketing, told me that the InsideView’s results can extend to roles beyond the typical sales, service and marketing and to back office employees like people in recruiting, collections and procurement.
“For a collections professional you can leverage [company profile information] to find other people in an organization to get the invoice that you’re chasing paid,” Peiris said.
LinkedIn integration can be a powerful tool for people in HR the same way information on financial results or bankruptcy filings can be powerful for collections, Peiris added.
InsideView on the other hand seems to be benefitting itself.
“NetSuite has a number of objects not available in other applications because it’s an end-to-end platform,” InsideView CEO Umberto Milletti said. “The number of places we’ve integrated is above and beyond what we’ve done before.”]]>
Apps.gov is a GSA-operated website that lets government agencies buy and deploy cloud-based applications.
It’s another answer for SaaS vendors facing questions about reliability and security. Kundra expressed excitement and optimism for deploying cloud-based applications in his blog:
Federal agencies and departments encounter many difficulties in deploying new IT services and products. Procurement processes can be confusing and time-consuming. Security procedures are complex, costly, lengthy and duplicative across agencies. Our policies lag behind new trends, causing unnecessary restrictions on the use of new technology. Past practices too often resulted in inefficient use of purchased IT capabilities across the federal government. We are dedicated to addressing these barriers and to improving the way government leverages new technology.
Yet he also sounded a note of caution:
We are just beginning this undertaking, and it will take time before we can realize the full potential of cloud computing. Like with Data.gov, Apps.gov is starting small – with the goal of rapidly scaling it up in size. Along the way, we will need to address various issues related to security, privacy, information management and procurement to expand our cloud computing services. Over time, as we work through these concerns and offer more services through Apps.gov, federal agencies will be able to get the capabilities they need to fulfill their missions at lower cost, faster, and ultimately, in a more sustainable manner.
Salesforce.com figures prominently in the Apps.gov store. RightNow has also been instrumental in bringing government agencies on board with SaaS. In April, it released hosting capabilities to support the Department of Defense (DOD) and other civilian government and intelligence agencies that have stringent compliance and security standards.
Bill Ives lauded both RightNow and the federal government at the time. He wrote:
I am pleased to see greater government uptake on the opportunities the cloud brings. There seems to be a genuine drive to balance security requirements with flexibility, cost savings and reduce unnecessary red tape with standardization.
While at the Gartner CRM Summit this week, I had a chance to talk with Jason Mittelstaedt, CMO of RightNow, who said that providing an application secure enough for the DOD has helped allay the reliability and security concerns of many potential customers.
Yet, one attendee I spoke with at lunch still wondered how people are coping with security and privacy when it comes to SaaS. His company, a financial institution in the Midwest, is running Oracle CRM on-premise and has already invested in the infrastructure required to house the system. It is still nervous about SaaS.
SaaS vendors still have some convincing to do, but the stamp of approval from Kundra and the DOD should help.]]>