2Q2013 Customer Service Stars

This week, continuing our tenth year of quarterly updates on the suppliers and products in customer service, we published our 2Q2013 Customer Service Update Report. These reports examine customer service suppliers and their products along the dimensions of customer growth, financial performance, product activity, and company activity. We currently cover eleven leading customer service suppliers. They lead in overall market influence and share, in market segment influence and share, and/or in product technology and innovation.

For 2Q2013, overall customer service performance was mixed but three of our suppliers—Clarabridge, IntelliResponse, and Salesforce.com—earned Customer Service Stars for the quarter. Very briefly, Clarabridge is a privately owned firm based in Reston, VA that was founded in 2005. Clarabridge offers a suite of VoC applications. IntelliResponse is a privately owned firm based in Toronto, ON that was founded in 2000. IntelliResponse offers a suite of virtual agent products. Salesforce.com is public (NYSE:CRM) firm based in San Francisco, CA that was founded in 1999. The company has a broad product that includes Salesforce Service Cloud, which provides case management, knowledge management, contact center, and web self-service applications.

So, what’s a Customer Service Star? Well, since 2009, we’ve been awarding Customer Service Stars for excellent quarterly performance balanced across those dimensions of customer growth, financial performance, products, and company activity. (Since 2010, we’ve also been awarding Customer Service Stars for the year—same criteria across four quarters.) It’s not easy to earn a Customer Service Star and we take awarding them pretty seriously. Here are the award criteria:

  • Customer growth: We examine significant quarter-over quarter acquisition of new customers and additional business from existing customers.
  • Financial performance. We examine quarterly revenue improvement as reported for public companies or as we estimate for private companies based on customer growth, customer base, and pricing.
  • Products. We examine new products, new versions in a quarter.
  • Company activity. We examine new M&A, partnerships, branding, patents, organization, and facilities in a quarter.

Typically, we award one Customer Service Star for a quarter. Frequently, we award none. Three in a quarter is a big deal, especially when many of our suppliers did not have good quarter. Here’s how Clarabridge, IntelliResponse, and Salesforce.com earned their Customer Service Stars for 2Q2013:

Customer growth and financial performance

  • On a base of approximately 250 customer accounts, Clarabridge acquired 10 to 15 new customers and did additional business with 55 to 65 existing customers, driving excellent financial performance
  • On a base of approximately 160 customer accounts, IntelliResponse acquired eight new customers and did additional business with six existing customers, driving very good financial performance.
  • On a base of approximately 165,000 customer accounts, growth in subscription and support revenue indicated that Salesforce.com acquired approximately 21,000 new customer accounts. We estimate that something around 20 percent of them licensed customer service products. Total revenue increased by more than seven percent to $957 million.

Products

  • Clarabridge made one product announcement in 2Q2013: Clarabridge 6.0, a major new version of its VoC application suite.
  • IntelliResponse made two product announcements in 2Q2013: OFFERS, a marketing application that delivers targeted offers within a virtual agent’s answers and VOICES, a Voice of the Customer analytic application. Both apps integrate with IntelliResponse Virtual Agent, “IR’s” virtual agent offering.
  • Salesforce.com made four product announcements: Salesforce Mobile Platform Services, mobile application development tools and programs for building and deploying Android, iOS, HTML5, and hybrid applications, Social.com, a new social advertising application, Salesforce Communities, a community application, and a suite of G2C (Government to Citizen) solutions for federal, state, and local agencies all built on Salesforce.com general-purpose apps.

Company activity

  • Clarabridge made three company announcements: a new corporate logo, web site, and brand for its products, a new general Counsel, and a partnership with Brandwatch for collection and analysis of social data.
  • IntelliResponse was awarded a U.S. patent for its answer matching technology.
  • Salesforce.com made three company announcements: an agreement with NTT to build a cloud-computing data center in the UK, the acquisition of ExactTarget, a marketing automation/campaign management supplier, and the appointment of a new President and Vice Chairman.

Props to all three for an excellent quarter!

We know all three of the companies and their current customer service product offerings very well. During 2013, we published a product evaluation of Clarabridge Analyze, Clarabridge Collaborate, and Clarabridge Engage against our Framework for Customer Social-Service on March 28, 2013. We published a product evaluation of IntelliResponse Virtual Agent (VA) against our Framework for Customer Virtual Assisted-Service on May 9, 2013. We published product evaluations of Salesforce Service Cloud against our Framework for Customer Cross-Channel Customer Service on January 24, 2013 and our evaluation of Salesforce Marketing Cloud Radian6 against our Framework for Customer Social-Service on August 1, 2013.

The three suppliers also made it easy for us to do our research for these product evaluations. All three gave us trial versions of their products as well as access to product documentation. For Clarabridge and IntelliResponse, we also read their appropriate patents and patent applications.

We usually publish our Quarterly Customer Service Update reports early in the third and last month of calendar quarters. IntelliResponse and Salesforce.com run on fiscal years that end on January 31. Their fiscal quarters end a month later than calendar quarters.

In a few weeks, we’ll begin research on our 3Q2013 Customer Service Update Report. Third quarters are summer quarters, quarters when the software business (and many other business) typically, shall we say, relaxes. But, we hope that a Customer Service Star or two will shine.

Analytics in Radian6

This week’s report is our evaluation of Radian6, the component of Salesforce Marketing Cloud that does social monitoring, analysis, and interaction. Its tight integration with Salesforce Service Cloud—automatic creation of Cases and Contacts—makes it the obvious social-service choice to add to the customer service application portfolio of Salesforce CRM users

Customer social-service is all about monitoring customers’ conversations in the social cloud, identifying customers with questions, problems, and issues, and then interacting with those customers to answer questions, solve problems, and address issues. The number of customer posts and conversations in the social cloud that may be relevant to a business can be very large, ranging to thousands or even tens of thousands per week and, in the extreme, hundreds of thousands per day. Monitoring and analyzing all of them, identifying the (few) posts that require attention, and then handling each one individually and handling all of them consistently are daunting and complex tasks, daunting because of the sheer volume and complex by the diversity and nuance of language, breadth of topics, and depth of emotion (sentiment).

Most social-service products use third parties to monitor social posts, to crawl and search the key social networks and the hundreds of millions of blogs and forums where customers ask questions, get answers, and make comments.  The value-add of these products is in their analytic capabilities, capabilities that can “understand” the content of social posts. Natural Language Processing (NLP), sometimes called text analytics, is the technology that they most commonly use. And, also most commonly, each of them is built its own NLP implementation. Their companies are built on it, too. These NLP implementations are frequently patented and almost always proprietary. They’re the crown jewels of analytics companies. So, the selection of a social-service application usually involves the evaluation and comparison of NLP implementations, a difficult selection of sophisticated and complex technology.

Not the case for Radian6. It takes the opposite approach. Rather than leverage the data collection capabilities of third parties and apply its own analytics, Radian6 does its own data collection (The current version searches and crawls over 650 million social sources.) and leverages the analytic capabilities of third-party analytics suppliers to understand the content of social posts. (Radian does a bit of its own analytics, too, although its analytics are a bit basic and are not built on NLP.) These 14, third-party analytics suppliers comprise what Salesforce.com calls the Radian6 Insights Ecosystem, Insights for short. They apply their analytic technologies to the social posts collected by Radian6.

The 14 are:

  • Bitext
  • Communication Explorer
  • Clarabridge
  • EpiAnalytics
  • Hottolink
  • Klout
  • LeadSift
  • Lymbix
  • OpenAmplify
  • Open Calais
  • PeekAnalytics
  • Soshio
  • The SelfService Company
  • Trendspottr

Let’s take a little closer look at three Insights to get an idea of their capabilities.

  • The Bitext Sentiment analytic perform Entity extraction and sentiment analysis for posts in Spanish (European and Latin American), Portuguese (Brazilian and European), Italian, and English using natural language processing technology (NLP).
  • Clarabridge provides two analytics. Clarabridge Link Sentiment provides sentiment analysis of social posts in Chinese, Dutch, English, French, German, Italian, Portuguese, Russian, and Spanish using NLP; Clarabridge Link Classification applies a Universal Category and Classification model to social posts in Chinese, Dutch, English, French, German, Italian, Portuguese, Russian, and Spanish using NLP.
  • OpenAmplify also provides two analytics. OpenAmplify Cust Svc uses NLP to identify social posts containing potential customer service issues and the topics of those potential issues. OpenAmplify uses NLP to identify sentiment, intention, and topics of social posts.

Salesforce.com offers these Insights like usage-priced cell phone minutes within the subscription licenses and their monthly fees for Radian6 Editions. (Editions are licensing tiers that bundle applications resources.) More specifically, Radian6 Editions include blocks of Insights partner credits. The analysis of one social post by a one analytic application from one partner costs one partner credit. At the low end, Marketing Cloud Radian Basic Edition includes 1,000 Insights partner credits. At the high end, Marketing Cloud Radian Enterprise Edition includes 500,000 Insights partner credits. Blocks of 10,000 additional Insight partner credits are available for a fee of $100 per month. Credits are expire every month (like cell phone minutes).

Insights’ suppliers set up pre-configured deployments of their analytic applications for access and usage by Radian6 licensees at runtime. That approach can be a disadvantage. For NLP based Insights, runtime access means that language models and processing configurations are those implemented by their suppliers for general-purpose usage, not language models and configurations of deployments tailored to the applications and vocabularies of specific businesses and their customers. For example, the Clarabridge Link Classification Insight uses a “Universal Category and Classification” to classify social posts. Analytic processing will still be quite useful, just not custom tailored.

There are also advantages to Radian6’s Insights approach of runtime access to analytic applications. Most significantly, Radian6 lets businesses easily combine and nest these analytics. For example, analysts might use the entity, fact, and event extraction capabilities of Open Calais to find posts relevant to a product launch and then use PeekAnalytics to identify the demographics of those posters. Also, specifying language models and processing configurations for NLP-based analytic applications is complex work, work that Radian6 users do not have to do to get much of the benefits of these sophisticated applications.

The approach to analysis in Radian6 is a significant differentiator and a key factor for selection. Radian6 delivers most of the power of a wide array of third-party analytic applications and the flexibility to use them separately or to combine their processing. Pricing is based on usage. Value is very good.