aheadCRM - Blog #Kustomer

Salesforce, Slack, Facebook, Kustomer - the big epiphany

Tue, 15 Dec 2020 17:29:49 -0500

In the last few days two really interesting acquisitions caught my eye. The obvious one that hardly could be missed, is Slack being acquired by Salesforce for a whopping $27.7 bn, which, to put it into perspective, is $2.2 bn more than Salesforce forecasts as its revenue for the upcoming fiscal year.

The other interesting acquisition is social network behemoth Facebook plucking up Kustomer, a five-year-old company with origins in customer service. What is interesting about Kustomer is that the company promotes managing customer service from the customer (hence the name) angle and not coming from the ticket as the main entity. Kustomer has since positioned itself more into the CRM area, but still with a focus on service “CRM for customer service” and also implemented an AI to help with routing and the end-to-end handling of (simple) cases by chat bots.

Digging a little further, one can find that Snapchat also recently acquired voca.ai, another tech company that specializes in serving natural, human-like conversations.

Salesforce acquires Slack

I have already covered the acquisition of Slack by Salesforce, and so have many other analysts. Thinking a little longer about it, yes, Slack gives Salesforce capabilities that so far only Microsoft can offer, albeit the balance of Salesforce’s productivity suite (acquired with Quip) is no match for Microsoft Office. Using both, MS Teams and Slack, I think that, with all its deficiencies, MS Teams has functional advantages over Slack. And it comes as part of MS 365 (formerly known as MS Office).

On the other hand, Slack as part of Salesforce is giving Salesforce customers that are not yet committed to a collaboration platform a choice. This is especially true, if Slack comes as part of the package, i.e. without an own price tag. The latter is something that I doubt, looking at Slack being on an ARR of around $1 bn and growing, and purchased at nearly $28 bn, but let’s see.

But then, Slack gives Salesforce an edge over SAP and Oracle, neither of which has a comparable offer. Oracle has a strategic partnership with Zoom, which places them high in the video collaboration arena, while SAP has Jam and a strategic partnership with Microsoft.

What Slack mainly provides Salesforce with are two things:

A leg into the SMB market.
A conversational UI that offers text, voice, video along with searchable file sharing capabilities.

Facebook acquires Kustomer

At about the same time, Facebook acquired Kustomer. Kustomer was founded around the idea of offering better customer service. This shall be achieved by providing agents better insight into the customer and by making the customer and the conversations with the customer the leading entities. These conversations can happen on arbitrary communication channels. This is in contrast to the traditional way of placing the incident at the centre and referencing the customer to it. To round this off, Kustomer also developed intelligent routing and a chatbot solution that help routing those incidents that are not deflected by the chatbot to the right agent.

You do wonder why a company like Facebook needs a customer service solution?

Well, as Ingrid Lunden also wrote in her readable article on TechCrunch, Facebook makes a sizeable business with companies that have a good deal of their, oftentimes the only, digital identity on Facebook and Facebook owned platforms. These are also regularly interacting with their customers via Facebooks messenger or via WhatsApp. According to Facebook’s own press release, there are currently more than 175 million people who contact businesses via WhatsApp. Up to now, these businesses used, and can continue to use, third party services for customer interactions. Now they can use a Facebook owned service, too.

So, the value of Kustomer for Facebook is twofold:

It can bring additional revenue streams, directly by the customer service offering, and indirectly, by making it easier for Kustomer customers to create advertisements on Facebook
Facebook can capitalize on the increasing trend towards conversational user interfaces

The common theme

What do these seemingly different acquisitions have in common?

Both of them revolve around conversations as an important way of interaction between people. This is the natural continuation of texting and messaging having entered the mainstream some years ago, at first in consumer applications, and then more and more in business applications, too.

As I have written in my article about what can be done to make sales people not hate their CRM system, one key ingredient is to make the system “speak with people”, i.e. offer a communication channel that is natural for people and reduces the friction between the communication parties as much as possible (or at least does not create unnecessary additional ones). These communication channels are text and voice, and this preference is, of course, not limited to salespeople.

Or, as Shane Murphy-Reuter, SVP Marketing at Intercom, puts it: “Messengers are how we communicate in our daily lives. They’re also transforming how colleagues communicate at work and are increasingly becoming the primary channel between businesses and customers. Consumers prefer messengers because they’re fast, friendly and personal. The shift toward conversational technologies is accelerating because messengers help businesses build strong relationships with their customers by providing a friendly, quick and easy customer experience that’s just like a face-to-face conversation and makes online communication feel much more personal.”

What does this mean?

This is a question that goes far beyond the immediate consequences for Slack- or Kustomer customers.

The conversation is the new UI

These acquisitions show the acknowledgement of a trend that in my eyes has reached a tipping point. Customers – people – want to communicate with businesses and their representatives in a way that is natural to humans. They expect businesses offering this capability.

The necessary communication channels exist since the advent of social media and mobiles becoming mainstream. Technologies that help businesses scaling communications are there, too. Chatbots and conversational AI’s are coming of age and are maturing rapidly.

Businesses leaders who have not yet started to offer conversational user interfaces to customers (and employees alike) need to act fast in order to keep pace with the demand for this type of user interface. They need to start implementations on limited but relevant scale, learn and grow from there.

Vendors need to build, buy or partner to offer convincing own conversational capabilities throughout their solution stack, starting from where it matters most (to their customers). Missing out on this will have a negative impact on their relevance going forward.

The conversation is the new UI. Are you prepared for it?

Kustomer - A New Kid on the Customer Service Block

Mon, 12 Dec 2016 16:11:00 -0500

Sparked by an article by Bob Thompson, titled You had me at “Treat Customers as People” about Kustomer, a new kid on the customer service block, I ventured to reach out to founder Brad Birnbaum and his team to get some more information. After all the customer quadrant of software is quite crowded, and a new company needs to offer good ideas to keep up and go beyond the incumbents, most of them being young companies as well. One of the basic questions that I had was: Do we need another customer service solution? After all, G2Crowd already lists 19 in their Help Desk grid; and these are only the ones that made it into the grid. Overall G2Crowd counts 78 solutions, excluding Kustomer. And quite some of them are quite strong. G2Crowd Grid Helpdesk, 12/2016 Figure 1: G2Crowd Grid for Help Desks as of December 2016 Brad and his team certainly seem to be of the opinion that there is an unmet need; as are their investors who brought in $ 12.5 million into seed- and series A funding in less than a year. The founders bring experience that dates back to 1996 and includes the success of Assistly, now desk.com, which is part of Salesforce. Another question is: How does Kustomer want to differentiate itself or, which issue do they solve that the other companies do not yet solve. Quite simply put, Kustomer claims that there are too many unconnected point solutions that customers – and hence employees – need to deal with. This issue gets addressed by the Kustomer platform that acts as an integration hub and connects customer service representatives to a multitude of communications channels; teams are enabled to ‘spend their days building meaningful relationships with customers and quickly and effectively solving their problems’. To accomplish this the team has built their user interface around the concept of the customer. Incoming support requests, regardless of the channel, are displayed by customer and not, as in other applications, by incident. When opening a customer all her incidents and conversations around these incidents are displayed in one timeline. The user interface allows for reply to the different channels. To emphasize on the focus on the customer Kustomer offers a simple sentiment tool that shows sentiment by customer and by conversation. Additionally, they offer a workflow engine that allows the automation of certain processes via configuration, as opposed to coding. Core objects can get enhanced and additional objects can get created – although I couldn’t test this feature, maybe due to the privacy tools that I installed on Chrome.

My Take

I have mixed feelings here. The market is contested and Kustomer is not an early entrant. On the other side, they managed to secure around 20 customers in a year. But then my opinions base on a short briefing and a brief trial of the system. I am interested in learning more. So much for a disclaimer at this point … Kustomer has bold messaging, but then they have a leadership team with plenty of experience and credibility. This is also evidenced by the team being able to collect 12.5 million dollars in investment in less than one year. While arranging the inbox around the customer is different from the incident based inbox of other systems the judge is still out whether this is a competitive advantage or not. The distinguishing factor that I currently see is the timeline in combination with the vision of including information from other systems, like order tracking system, delivery status, etc. Especially, if the Kustomer team manages to implement a way that consistently keeps track of conversations even if customers change the communications channel and/or do not use the reply button but just shoot off another message to an existing conversation. This, however, would require some sophisticated text mining and also does not necessarily make up for a lasting advantage. The platform thought offering custom-, as well as customizable objects, workflows and events that integrate with the inbox gives a good view into customer interactions and behaviour once the needed objects are in place. This can be seen by the Shopify integration. It might also be an important resource for future enhancements of the functionality beyond customer service. I do say this because in my eyes customer service starts well ahead of making the sales transaction and needs to strongly consider helping towards a buying decision. The platform approach, is nothing that we haven’t seen before; however, most vendors aspiring a platform are looking at bigger clients than Kustomer does. And Kustomer surely has the advantage of being able to build upon state-of-the-art technologies and architectures where other players already have an architecture and technology in place, which might decrease their pace of innovation. At this time, the team fully focuses on customer service functionality, which is a good move as the market is very competitive, and as the unification of communication channels into one application/user interface is not complete enough, currently only supporting mail, a chat interface and text/SMS. In-app mobile support, knowledge base support. While there is a statement that customers can easily customize their setup to connect to social media, messaging services, etc., this is functionality that should come out-of-the box. But then, again, Kustomer is a young platform and solution – a lot can happen in the next months. It will be interesting to see the market evolve.