Recently I had the chance to kick my CRM grievances around with Aaron Fulkerson, CEO of MindTouch, and find out why he thinks cloud can alter service for the better. Aaron didn't disappoint, giving me outspoken views on open source, Salesforce versus SAP, and why service is becoming a brand crisis for companies that don't take action. A Salesforce and - as of June 5 - an SAP partner, MindTouch plays in multiple CRM markets, giving Aaron plenty of customer stories to tell. Some of Aaron's answers really surprised me; I hope they spark a worthwhile debate.
Jon: Why did MindTouch move to cloud services?
Aaron: We made a concerted effort to move to the cloud because we could ship a better product faster, and innovate more quickly. And then, of course, you can pass that savings on. It’s not only a better product, but the total cost of ownership for cloud is dramatically lower for the customer.
Remember, we started off as open source. The distribution economics of cloud disrupts open source economics, because if a customer is going to install an open source project, they need a technical IT guy to get it up and running, and then they have to maintain it.
Jon: When did MindTouch move to all-cloud?
Aaron: We were open source in 2008. In 2009, we introduced a commercial offering. That same year, we realized we had to be in the cloud 100 percent - otherwise we were going to fall behind. So in 2010, we made the transition from on- premise to a 100 percent cloud infrastructure.
Jon: Given the recent Oracle/Salesforce news, do you see that as validation of cloud CRM?
Aaron: I think it's clear that all software applications will eventually be cloud- delivered. Areas like CRM that are closest to the customer are obviously the areas with the highest rate of cloud deployments. The VP of sales wants as complete autonomy from IT as possible. But it's just going to spread from there.
Jon: You’re more bullish on SAP’s CRM cloud play than most. Why?
Aaron: Salesforce is going to have to continue to seek allies in order to create a defensible area as SAP ramps up in their space. SAP's going to be methodical about it. They're going to continue to build a product that has a chance to be superior to Salesforce. The reason why they'll be able to deliver a great product is because they'll make it an end-to-end story that integrates with all the infrastructure SAP already has with their existing customer base. They're going after Salesforce. There's no doubt about it. But keep in mind, we've partnered with Saleforce for a long time and they will continue to be a force to be reckoned with. I expect this to be an arms race, with both companies jockeying for position.
Jon: Do you pick up customers from the Oracle or Salesforce side, or are you primarily SAP focused?
Aaron: Most of our customers today are Salesforce customers, so we partner with Salesforce. We do see some Oracle customers as well, because some of their customers are on prior acquisition products that are pretty long in the tooth. Some of these old school CRM products have been around for 15 years, and they just aren’t competitive anymore.
Jon: That's interesting you think Salesforce should consider SAP a real CRM threat. We don't hear that much around here.
Aaron: Well, let’s face it, integrating with existing ERP systems is not simple. It's hard for SAP to do those integrations today too. But as soon as SAP can make that integration more turnkey, it's going to be harder for Salesforce to come into SAP accounts.
Jon: You mean when SAP fleshes out the integration between its on premise ERP and cloud CRM products?
Aaron: Correct. That's when they're going to be a much more competitive product.
Jon: When you talk about integrating MindTouch with SAP, you’re focused on SAP’s cloud CRM products, right?
Aaron: Yes, we’re entirely focused on working with SAP’s cloud CRM products – not their on-premise CRM. We partnered with SAP because we think SAP has a unique opportunity to create an end-to-end CRM story that any other player is going to struggle with.
The approach SAP can take is that they can track an order, or a unit - whatever you want to call that order - from customer sales all the way through procurement, inventory, delivery, financing, the way that nobody else does. You could call that complete end-to-end process ‘from prospect to promoter.’ It's that end-to-end that MindTouch, and in particular, SAP is very focused on, from that prospect to promoter angle.
Jon: By ‘promoter,’ you mean moving all the way from a prospect kicking tires to a happy product advocate?
Aaron: Exactly. In our case, it means you are delighted by the proactive support experience.
Jon: Which brings us, not coincidentally, to your cloud service product. Exactly how are you delighting customers?
Aaron: Well, we just pumped out a record month and a record quarter, and we have some really exciting projects that are going to close in Q3.
Jon: You have said that even huge, successful companies are stuck in the dark ages with the support experience. Got an example?
Aaron: We have a customer we expect to close in a week or two that gets 600,000 support requests a year. Most requests are through the phones, but they're seeing more customers demanding service online and trying to file support requests via email. Their agents are responding to these 600,000 support requests using a binder. Remember those Chilton automotive parts books?
Aaron: Well, in this case, every single agent’s binder is unique, plastered with Post it notes that they've stuck on loose leaf paper. There's no online documentation. There is no way to collaborate on knowledge. What we are going to do is help this company turn the process of supporting their customers into a virtuous cycle that creates their knowledge repository by the end of their big support season. It’s just a function of their agents supporting their customers.
As they do it, they'll click ‘publish to MindTouch,’ and publish closed cases into MindTouch. Then one of their super-users will go back into MindTouch, and his team will clean up and convert these tickets into knowledge articles which their customers can access. That will result in a better support experience and massive amounts of ticket deflections.
Jon: Tell us about an existing customer and the results you’ve gotten.
Aaron: Sure - we have a tech company with several MindTouch deployments. They drop MindTouch in as the knowledge infrastructure for their help desks and customer self service. We are currently defining a new deployment for them that is really interesting. I talked to the Executive Vice President of Customer Support recently. She said, ‘Aaron, half the support tickets that come in are people complaining that our documentation sucks. I estimate we could deflect 30 percent of it because they're recurring issues.’ Anyhow, she did a calculation and estimated that we could save them $38 million a year.
Jon: That savings is primarily due to enhancing the documentation over time, so they dramatically reduce their support load?
Aaron: A typical MindTouch result is a 20 percent increase in ticket deflections. In this case, a 20 percent increase in ticket deflections is $38 million. I told them, ‘You don’t even know if your documentation sucks, because none of your agents are sifting through these 400 page PDFs.’ We’ll convert that into web-accessible product knowledge, accessible as a service to their agents.
The big thing is the cloud deployment facilitates collaboration. The customer plans to involve not only their internal subject matter experts; they also want to crowdsource this documentation with customers and partners. I’ve been preaching this for four years now – I just didn’t expect this customer to jump in with both feet so quickly.
Jon: You and I have also talked about how the service experience gets brutally scattered for global companies.
Aaron: That’s really becoming a problem. It's increasingly the case that customers are looking at a company’s product knowledge base and their support channels as an extension of the brand. That's what customers are buying into, and most companies don’t get a passing grade.
A company might have agents in Nova Scotia sharing through Twitter and Facebook and God only knows what. Meanwhile support agents in outsourced offices are using their own proprietary knowledge and not representing the brand well. Then there is incomplete documentation on the web site. A company will say to me, ‘I don't get any customer intelligence from these interactions. It's not a consistent, complete message. It's not quality – we know it's not. But we need you to tell us where the gaps are.’
Jon: And bad service becomes a PR headache overnight.
Aaron: True. We're increasingly seeing marketing buyers come in and say. ‘We've got to fix this, because right now when people search for information on our products, they can't find branded product knowledge. They end up on a third party site or a social media stream. These peoples are badmouthing the product. We've got to control this.’
Jon: When SAP acquired hybris for e commerce, there was a lot of talk about omni-channel - serving customer needs via multiple touch points. On the service side, we are plagued by the inability to have a satisfying experience with companies who don't seem to carry the relationship from point to point. Is that finally changing?
Aaron: MindTouch is not going to solve the end to end story around the customer relationship ourselves. What we are doing is making sure that regardless of when you connect with a company and regardless of the channels you connect through, whether it's email chat, or phone, you're going to be get a consistent, high quality and complete message. We're also going to deliver a whole raft of related knowledge that's going to help you address your product questions.
Jon: So what you’re saying is we’re not all the way there yet.
Aaron: We're not solving the customer experience problem. We're solving the product knowledge issue, and pro-active support is a part of that.
Jon: It's a part of the customer experience problem, but it's not the whole enchilada. Darn!
Aaron: Solving the customer experience is like boiling the ocean. We do the pro-active part of it, and then we enable the reactive technologies to be better and more consistent.
Jon: So using your solution, a customer service rep will make sure that the first email I send about a problem is the last email I send about the problem. I don't have to send 10 emails because the person I’m dealing with has crappy documentation and is giving me crappy answers.
Aaron: Right - and we also make sure they don't share knowledge that you've already viewed, because we show them what you need. Look, we have a different take on this. The knowledge piece of CRM is seen as a commodity, and that couldn’t be more incorrect. There are only so many variations of fields you can have in a CRM system, and we’ve seen them all. What is not a commodity, and happens to be a huge differentiator, is this knowledge layer that makes it possible to change the customer support experience.
Photo credit: Woman Screaming On Telephone Conversation © Scott Griessel – Fotolia.com
Jon Reed notes: updated 4:25pm US EST with several clarifications from Aaron Fulkerson.
Disclosure: SAP and Salesforce are both diginimoica premier partners as of this writing.