Here's something you don't see much these days: A solution provider claiming 16 consecutive quarters of revenue growth. If RightNow Technologies is half as successful as CEO and founder Greg Gianforte says it is, then his company must be getting IT and business managers to do something they rarely do these days: Reach for their wallets.
Are those IT and business managers onto something that the rest of us should know about?
In the customer relationship management arena, RightNow Technologies focuses on the service side (as opposed to the sales-side), the part of CRM that deals with supporting existing customers over the Web, by e-mail, via call-centers, and through phone-based interactive voice response (IVR). If your company has between five and 500 customer service representatives, RightNow could be for you.
According to Gianforte, "the ultimate win for us is when our customers' customers make their purchase decision based on the quality of service that they know they're going to get." Aside from the ASP model that most of RightNow's customers have elected to use, one feature that distinguishes RightNow from competitive offerings, claims Gianforte, is that it doesn't matter which of the four channels (Web, e-mail, call-center, or IVR) a customer chooses to use for support. In all cases, the answers come from the same knowledge base, thereby ensuring a consistent response. In other words, customers have direct access to the same information available to the call center's customer representatives.
The typical RightNow customer, says Gianforte, experiences a 10- to 30-percent drop in incoming support calls and a 50- to 70-percent drop in inbound e-mail. With fewer resources needed to support customers, he claims, a company can expect the solution to pay for itself within six to nine months.
"People who are interested," says Gianforte, "can try before they buy. They can define the metrics for success and, if we don't live up to their expectations, they can walk away without paying a dime. We don't think any corporation should have to purchase software if the software hasn't proven to work in their environment. We've seen wreckage all over the place [in terms of failed deployments] and that wreckage means that there's a lot of hesitance to try again, especially in this climate."
This sort of commitment to customer satisfaction is rare these days. E-mail I get from ZDNet's readers often notes that solution providers pay a lot of attention to their customers during the sales process, but, once the sale is completed, they hand off the customer relationship to account managers who are not nearly as attentive.
Gianforte likes to be held accountable by RightNow's customers. "Eighty-five percent of our contracts are not perpetual licenses," he says. "They are renewable every two years. This reduces the up-front cost for customers and forces us to make sure the customer is happy, because the success of the company depends on those contracts being renewed."
Apparently, the approach is working. RightNow's customers include the Social Security Administration, Medicare, Black & Decker, Polaroid, about 80 telecom companies worldwide (RightNow supports 15 languages), British Airways (which has 30 separate deployments), and the shoe company Sketchers.
"Although it doesn't look that way, all of the functionality behind the customer service link on Sketchers' Web site is provided by us," says Gianforte. "When you look up something--like why you're getting blisters on your feet-- we do more than provide the answer. Our software knows what other entries in the knowledgebase are applicable, and automatically provides contextual linkage to related questions and their answers. In the case of the question about blisters, the first related question has to do with the ordering of custom shoes."
To get an idea of how the single knowledge base powers multiple customer service channels, I went to Sketchers' Web site. Sure enough, regardless of whether I took the Web or e-mail path, I was given the same answer and relevant questions. As evidence of how the solution reduces e-mail load, when I selected that method for support, I was redirected to an equally effective Web page. However, there was a bug in the system and the same four questions that the system thought I was asking were listed no fewer than three times each.
Gianforte claims that 90 percent of RightNow's revenues are derived from the same application service provider (ASP) model that has turned sales-side CRM provider Salesforce.com into another one of this industry's trend-bucking success stories. The two companies' success appears to confirm a long-held belief shared by Gianforte and Salesforce.com's CEO Marc Benioff: The benefits of the ASP model --- particularly the economic ones --- are too overwhelming for IT and business managers to ignore.
"Marc and I are fighters in the same war," says Gianforte. "Customers are tired of expensive, monolithic solutions that are impossible to maintain or manage."
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Benioff claims that the privately held ASP-based Salesforce.com has positive cash flow and is profitable.
Although Salesforce.com and RightNow Technologies appear to be vindicating the ASP model, Gianforte talks about how customers are free to deploy RightNow's software themselves. Ten percent of the company's customers have chosen to do so. RightNow can run on Linux, Solaris, or Windows NT with a SQL Server, Oracle, or MySQL relational database management system. But, echoing Benioff's statement about one of the ASP model's chief selling propositions, Gianforte says, "between the browser-based UI on the customer side and the way all customers share the same infrastructure on the server side, we've been able to easily amortize our datacenter investments across all of our customers, which in turn allows us to provide our services at a cost that severely undercuts the total cost of taking the traditional approach with us, or one of our competitors."
With two complementary ASP-based CRM providers doing so well, I can't help but wonder if a partnership is in the cards. Although Gianforte won't rule out the idea, he says that RightNow's cash position enables him to worry less about partnering and more about making investments in areas that are natural extensions of service-side CRM.
One of those extensions, perhaps to the chagrin of Salesforce.com, is sales. Gianforte says business executives are talking about how their sales departments aren't getting any traction in today's economy; meanwhile, the customer service department spends all day talking with customers. "These executives are looking to leverage all that customer contact in a way that boosts sales," says Gianforte.
Calling it "proactive customer service," Gianforte says the customer service department can be converted from a cost center into an upsell or cross-sell opportunity by selling products outright or by generating leads. RightNow's customers can expect the next improvements to come in this area. In addition, RightNow will soon be a full-blown call center management application.
Regardless of which way Gianforte or Benioff take their ASP-based offerings, the beauty of the browser-based delivery model is that, unlike with locally installed software, their customers won't have to do any heavy lifting to access the updates. RightNow and Salesforce.com do that for you. A customer-centric focus like Gianforte's doesn't hurt either. Judging by both providers' success, a lot of big companies like it that way.
If you haven't taken a look at the ASP model recently, maybe it's time you should.
Are you an IT or business manager with an ASP success or failure story? Share your thoughts with your fellow readers using ZDNet's TalkBalk below, or write to me at david.berlind@cnet.com.
