Yext’s latest quarterly numbers contained an interesting nugget concerning the sort of customers that the firm is selling into, with the news that it’s signed a deal with soup maker Campbell’s.
On the face of it that might not seem that dramatic - Yext has an impressive roster of logos already, including the likes of Jaguar Land Rover and New Look. But for founder and CEO Howard Lerman, this particular deal is significant for a reason that plays to his firm’s strengths and future growth plans:
This is the first time in our company’s history that we’ve closed a contract with a CPG (Consumer Product Goods) company that doesn’t have any physical store location. Now how were we able to sign a CPG company with no physical store locations? One simple word - search.
In its marketing, Yext pitches itself as “the platform for Brand Verified Answers in search”. What it sets out to do is to bring traditional search up-to-date. Lerman explains:
Search is changing from links to answers and because it is, people are being retrained to ask longer questions instead of just typing in simple keywords. They are not only asking longer questions, they are also asking questions in more phrases. The fact is that today’s customer journey starts with a question and if a brand doesn’t answer a question, someone else will.
The problem, he contends, is that traditional search products aren’t smart enough to support that objective:
Most sites when you see that magnifying glass, you type in a query and you get junky results. For example, go to Procter & Gamble’s website PG.com. The very first search results for their popular product if you search for Tide - just type in Tide and it gives you a Vietnamese result. You can’t find what you are looking for. And when the user gets a result like this, they just go back to Google and it means Tide lost control of the customer journey and that the user is likely to see a competitor’s ad.
Yext offers three products as part of its solution to this issue - Pages, Listings and, heading for general availability, Answers, all of which sit under an umbrella concept of a Knowledge Graph, Yext-speak for a structured database. Lerman expands:
Pages lets Yext customers create a page for every answer, which is a best practice for ensuring the right information shows up in the search engine. And Listing integrates the data in a Knowledge Graph directly into 150 voice assistance map apps, third-party services like Google and Amazon, Bing, Facebook and many more.
But it’s Answers on which most attention appears focused at the moment. The claim made here is that this will deliver “a Google-like experience” for any company, but will provide “answers, not links”. Lerman says:
The user types in a question on a company’s website and Yext answers the question, kind of like Google does, except it’s all controlled by the brand and built on a brand’s Knowledge Graph. Answers delivers a safe search experience on Yext customers’ websites where customers can search the Knowledge Graph and get answers.
This is delivering structured search, according to Lerman:
Every other product in the world index-based search which gives you documents back when you search for something. That’s actually how Google works. There are two parts to Google. If you search for McDonalds, the very first thing you’d see might be maps and knowledge cards. That’s structured answers powered by a Knowledge Graph, and then, under that you see links which are powered by their index-based search. They blend them together to give the user a certain experience.
What makes Yext’s offering different is that it isn’t index-based or document search, he argues:
For every single one of our existing customers, we have a Knowledge Graph that contains collectively more than 200 million facts. And so, the ability to give an answer back from structured comes from having all that structured data. So, for any of our existing customers, it’s pretty straightforward for Yext to spin up an Answers instance and be able to answer questions about their business because we already have their knowledge graph. We already have their data.
What this means in sales terms is that it’s easy for Yext to produce a working demo for prospects that is ‘real’:
We can show up with something that just works, simple to install. Now when it’s a new logo, we’ve got to get the information into the Knowledge Graph. For an existing customer, we don’t have to do that. Although a core part of the packaging here is, ‘Hey, go ahead!’.
And the sales opportunity is large, he concludes:
Because the market opportunity is so large, we think that Answers is going to be a natural entry point for many companies. It’s essentially available to any company with a website, no longer limited to physical locations.
Having first encountered Yext earlier this year on the back of its London conference, I find it an interesting company to track, for a couple of reasons.
Most importantly, it has found a genuine business need in the market and produced a solution that is clearly working out for a lot of enterprise users. As regular diginomica readers will be aware, our hard-wired doctrine is that the best proof points for any technology come from customers and Yext’s logos are impressive - and communicative - on that front.
Secondly, it’s got a strong executive team that looks increasingly like a Salesforce alumni reunion, with that firm’s former CFO Steve Cakebread in the same role here, while Salesforce’s former Chief Customer Officer and Head of Worldwide Sales Jim Steele is in situ as President and Chief Revenue Officer. The most recent catch is a good one, with the appointment of Mary Fratto Rowe as Chief Customer Officer, whose 13 years at Salesforce included time as Senior Vice President of Customer Success as well as leading the Advisory Services division of the Salesforce Success Cloud.
The firm just turned in some strong revenue growth numbers - $72.4 million, up 32% year-on-year. Operating costs, including headcount in sales and marketing, drove an increased net loss of $29.3 million, 51% greater than the comparable quarter last year, but expansion comes at a price. Next up is the company’s Onward conference in New York, where Answers will go on general release.