Turn Service into Sales, RightNow

What do you give the IT executive who has everything?

31 October 2003, By David Berkowitz eMarketer

How about a customer support Web application? Those are in high demand, according to nearly two-thirds of respondents to a Line56 Research survey.

Here’s an even better idea. Instead of just giving some application that takes forever to deploy and is a standalone system for the customer service team, why not give a gift that keeps on giving? RightNow Technologies’ hosted software provides the group in sales and marketing with records of every touchpoint the company has with each customer. For example, a customer’s record not only says he called to thank the company for making his life so much more meaningful, but that he was sent a coupon for 20% off six months ago and is long overdue for a follow-up.

RightNow has strung together 19 consecutive quarters of revenue growth, amassing over 1,000 customers worldwide with more testimonials than it can count. Every one of its employees lives and breathes the company credo, “We are passionate about our customers’ success.” One particularly passionate RightNow employee, CEO and founder Greg Gianforte, told eMarketer why RightNow is thriving.

Greg Gianforte: There are things we’re doing that are different. I think there’s a couple of things that we’re seeing that are significant. The first thing is there is a fundamental change that’s occurring in the way enterprise applications are being consumed by corporations. We’re really experts in customer service, and now marketing capabilities as well, and what we’re finding is that companies are really fed up with software deployments that take a long time, are very expensive and you’re never quite sure what results you’re going to get out the other end. We would attribute that to the complexity of traditional enterprise application software. We deliver primarily through a hosted model, and what this means is our average time to deployment, from customer commitment to live, is about a month, whereas something Siebel takes nine months to a year, and that’s typical in these larger enterprise applications.

For the companies we deal with, which are primarily middle-market companies and divisions of Global 2000 companies, they really want fast time to benefit, and they don’t want to feel like they have to completely customize the application to get any value out of it. Gartner earlier this year ranked us as really the only challenger to Siebel in our space, and above SAP, PeopleSoft, Oracle and everybody else. One of the characteristics is this hosted delivery eliminates 80% to 90% of the ownership costs.

eMarketer: To clarify, what is that a ranking of?

GG: That is a Gartner Magic Quadrant published in March of this year specifically for e-service. We were in the Challenger quadrant. The vertical axis is execution ability, and the horizontal axis is vision, and Gartner put us in the upper-left quadrant, right next to the vertical bar, and Siebel was in the upper-right quadrant, right next to the vertical bar. We’re right next to each other, and then everyone else was below us down in either the Niche quadrant or the Visionaries quadrant. Clearly, they broke us out of the pack. We were pleased.

The second thing I point to about the way we do business is our clients sense a sincere desire on the part of our employees to do the right thing. We embody this in the sense of something called the RightNow Promise. It all sounds like motherhood unless you put some meat on it, and the meat for us is a couple of things. One is we don’t think anybody should have to buy software unless the software vendor proves it’s going to work in their environment, and we typically do that through ‘try before you buy.’ It takes a lot of the risk out of technology decisions for corporations.

Secondly, most software vendors practice what I call drive-by software sales where they come in, make a sale and they move on, and you’re on your own. We don’t do business like that. We typically license our software on a term basis. We’re not licensing it for eternity, and you’re not paying for it for eternity. That does two things. One is it reduces the customer’s upfront costs, and secondly it gives us a vested interest in investing in the relationship so that they earn the renewal, and it really engenders more of a partnership.

eMarketer: You’d almost think that since you’re not doing a drive-by installation approach, you’re giving them a lot more but you’re charging less for it.

GG: Some customers would think that. One customer said they like this model because it gives them a throat they can get their hands around. We have to work to re-earn their business. Long-term, if we’re not satisfying customers’ business needs, we’re not going to be in business. Nobody ever believes anything a software vendor says. Our best data point is our customers themselves. We have hundreds of referenceable clients.

eMarketer: Going back to something you said, and I think this will get into the heart of what RightNow is doing, you mention you have expertise in customer service and marketing capabilities. Those are two things that often don’t go in the same sentence.

GG: Let me connect the dots for you because they’re very closely coupled.

There are a couple things driving customer service organizations today. One is the need to be more efficient. Our roots are in e-service, and e-service is probably the best way to increase the efficiency of a customer service operation, and, at the same time, improve the quality of service because it moves higher cost interactions to lower cost channels — phone calls to the Web, for example.

The second thing customer service organizations are doing is as they add new channels of support like e-mail or web interaction to their traditional phone contact centers, what that is really called is multi-channel service, that is, the ability to have one view of the customer. That whole multi-channel service area is really our roots. What happens when you do multi-channel service well? What you end up with is a database of every interaction you’ve ever had with a client, regardless of the channel. That is a goldmine for the marketing person. Really what you have is a database of all the customer’s wants and desires.

At the same time this is going on, we have anti-spam legislation. We have the Do Not Call list. Those legislative efforts are cutting off avenues for the marketing person to communicate with potential prospects. Senior management is looking at the organization, and what they realize is the customer service department has more customer contact than any other part of the company. They’re thinking, “Can’t we get more out of that? How do you do that in a way that’s not offensive to the client?”

One way to do it, and this is what we’re hearing back from our clients, is to use this one view of the customer, apply analytics against it, and then create personalized outbound communications based on what we know about the customer, and this is where marketing comes in.

The future of customer service is about using customer service to create a concept we call Top-Line Service, where customer service is actually used to drive top-line revenue growth. This is not something we cooked up. This is what our customers are telling us.

“It sounds to me like finally somebody figured out what they should be doing to have relationships with consumers,” remarks Greg Stuart, CEO of the Interactive Advertising Bureau, the trade association for the Internet advertising industry. But the blending of marketing and customer service could mean “re-engineering an entire company,” he adds.
–Direct Magazine,
October 2003

eMarketer: Your customers in a wide range of industries, so do you find that in general their needs are pretty similar, or do you find that companies like Cisco, the US Postal Service and Hasbro have very different needs?

GG: The complexity of the questions change, however, the need to deliver quality service is the same. Where we have the most impact is where a company has lots of customers, and they’ve demonstrated a willingness to invest in customer service, as evidenced by dedicated staff providing a customer service function. That tends to be consumer products, travel, telco, high-tech companies and government agencies. Who has more customers than the government? We’ve done over 150 government agencies, 80 telcos, 17 airlines, lots of consumer goods manufacturers — so it really is a pretty horizontal need.

Regardless of industry, as markets mature, one of the few points of differentiation that remains is quality of service, and that trend is universal.

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