The ability to understand how your customers and your employees are feeling and then take action on that data is just golden.
That being so, this must be a Gilded Age for Qualtrics, where CEO Zig Serafin claims a ten year lead for the Experience Management specialist over the competition:
Experience Management is becoming as critical to business success as any CRM or HR system…In a world where it's easier than ever for customers to change service providers and where employees are leaving their jobs at record rates, the experiences that companies deliver have never been more important.
The firm just turned in full year numbers for fiscal 2021, its first as a public company, with total revenue of $1,075.7 million, up 41% year-on-year and a net loss of $1059.1 million. Subscription revenue was $870.7 million compared to $575.4 million last year, an increase of 51% year-on-year. Other stats of note from the earnings call:
- 143 customers spending $1 million or more annually, up 93% year-on-year.
- 3000 customers added in 2021.
- Customer base of 16,750 organizations using Qualtrics.
- More than 275 integrations with third parties, including SAP, Salesforce, Zendesk and ServiceNow, nearly 3x more than last year.
That last data point is particularly important as a competitive differentiator, says Serafin:
What's important is not just that we have a larger growing vendor universe of companies who are connecting to us or, for example, those companies who end up enabling the implementations or build strategy and consulting around our system; what's important is that they're getting deeper. So the nature of, for example, the integration that might take place for an employee-facing use case and employee-facing systems are creating, for example, more time and contact-sensitive ways of enabling an experience or taking a corrective action. So, those are pathways towards becoming a deeper part of the way that companies operate. The fact that customers, our customers, are pulling in these other vendors and saying, ‘Hey, you got to integrate with Qualtrics’, is also another important sign of the fact that we're building this platform right.
Serafin also argues that customers are deepening their relationships with Qualtrics:
They're consolidating point solutions. At the same time, what's happening is C-levels, including CEOs, are getting involved in making Qualtrics a mission-critical component of their overall strategy to understanding their customer, particularly around understanding the 360 view of the customer and how they're serving the customer across different channels, whether it's digital; whether it's the in-store experience; whether it's people working in the field serving another business, for example; whether it's call center activity - just bringing all of that together and standardizing on one system. And of course, they're coupling that with capability set around product, product experience and our entire Employee Experience suite, which is another extremely important differentiating aspect of what we do as a company.
The so-called Great Resignation is fuelling corporate interest in Employee Experience, argues Serafin, citing the example of Southwest Airlines to make his point:
As travel resets, Southwest Airlines has an ambitious goal of adding a significant number of employees to its workforce in 2022 which is a challenge for any company in this labor market. Southwest expanded its relationship with Qualtrics and invested in our Candidate Experience solution. So from the interview process, all the way through to onboarding they can understand and act on the most important moments along a candidate's journey to the company.
This past quarter also saw Qualtrics acquire omni-channel conversational analytics provider Clarabridge. Serafin says:
Clarabridge adds a critical new layer to our platform that helps organizations discover everything that their customers and employees are saying wherever they're saying, it including in social media, e-mail, support calls, chats and product reviews. Our customers are designing products services and experiences that their customers want next by acting on customer feedback from anywhere. And they're designing new ways of working by listening to their employees.
He points to a particular use case of how the Clarabridge addition assists Qualtrics:
Barclays has been using Qualtrics for many years. In the [fourth] quarter, they added Clarabridge technology to enable analysis of unstructured customer feedback for their retail bank. So now Barclays will have a single system to get a 360-degree view of everything that customers are saying, whether it's in social, in the call center, wherever they're saying it. This will help them uncover opportunities across financial segments and ultimately power their digital or any experience that they provide as a driver for growth and efficiency.
Part of this is actually more broadly speaking where customers have historically used point solutions for social media monitoring, for example, or to do voice analytics in the call center or to analyze the chat stream. What we're doing now is we're creating the ability to, first, save cost on the combination of those point solutions now being consolidated, but secondly, even more importantly, is to create one strong source of data on what customers are wanting an organization to know, to make stronger decisions on a day-to-day basis, regardless of how they're engaging. So now you're bringing together the social data, the call center data, the chat data, the product review data. You're combining that with structured information and you're putting that into the Experience ID as part of the single repository of understanding the customer.
In the end what it comes down to is what unique value is being created for customers.
OK, the net loss isn’t a happy number right now, but this has been a solid first year as a public company for Qualtrics, a company that is clearly in the right place at the right time. Wall Street seemed to agree, with the share price rising 14% on the back of robust and confident forecasting by the company. It’s difficult to argue at this point that there’s anything other than an upwards trajectory underway here.