Modern companies need modern tools to stay in touch with customers. With the list of communication tools consumers use growing, "staying in touch" gets harder and harder.LiveOps CEO Marty Beard knows a thing or two about staying connected with customers. With over 300 companies and 30,000 users using his products, the company serves as the tip of the spear in the explosive growth of multi-channel (cloud, social and mobile) contact centers. Join us as we SYNC up with the 2012 Big Awards Product of the Year winner.
Interview Transcript
Russ: This is Russ from the Business Intelligence Group and today we’re with Marty Beard of LiveOps. Now, LiveOps was a 2012 winner for their Insight product for Product of the Year of the Big Awards 2012. So Marty, I appreciate you joining me and welcome to the Big Awards Sync.
Marty: Thank you, look forward to being here.
Russ: So you guys have had a tremendous year. You’re in a great space in this kind of contact center that’s emerging with mobile and social and everything. How has it been going in general?
Marty: Awesome. So, you’re right, I mean the market that we’re focused on is really being disrupted by a lot of trends. So call centers sit right in the middle of consumers and brands and they get all the interactions. What’s happening is traditionally those interactions were primarily through voice. Now, it’s also e-mail, it’s web chat, it’s Twitter, it’s Facebook, it’s text, it’s a whole variety of channels that are coming into that, into that call center.
So if you’re in the technology industry and you’re focused on a space that’s really being impacted by these trends, it’s a great place to be and we have a great product addressing that.
Russ: Yeah, and you guys said in between basically the customer and the company, but I guess you described it well. You have all these different channels of communication that the customers are using. Then you also feed into all the channels that your customers are using, you’re using the web, Salesforce, Twitter, all of those things that you mentioned.
Marty: That’s right.
Russ: How do you deal with all the complexity, with all the new channels and new tools being launched literally daily?
Marty: Yeah, no, you’re right. What’s happening is you can think of the end user, they have a customer issue. They’ve got something that they need some kind of support that they’re reaching out for. What’s happening and just increasingly and growing very, very fast is they’re interacting in a variety of ways. One person might call. They might send an e-mail. They might Tweet about their experience. So, really when all of that is coming in at once the complexities around the business intelligence, what do we know about that consumer and also the routing. So you want to make sure that you’re routing that interaction to the right agent. So the agent can actually help this person in the most efficient manner.
So a lot of the complexity, to answer your question is, it’s in the software. It’s in the routing software. It’s in the analytic capability that needs to happen right away in real time. So you understand what the interaction is about and you get that to the right agent so that agent feels like they can help that person have a happy interaction and then move forward.
Russ: So, you came out of the, I guess, the oracle side base, you’ve been in the mobile space for a long time. How did you get roped into this? How did you get roped into call center?
Marty: You’re right, I was in enterprise software for many, many years and also read a large mobile business for many years. The thing I like about call center is it’s one of those very practical environments where everything that we read about in the press about social, about mobile is actually playing out. So this isn’t a theoretical impact or kind of a new buzzy segment. Call centers as I said, they’re right in the middle of tons of interactions on a daily basis. So I could see that cloud technologies we’re going to have a big impact. Obviously mobility, people are on their mobile phone, they’re tweeting about their experience or on an iPad they want to be able to see an agent. All of this was playing out very dynamically.
That was really attractive to me that has a very practical lab, if you will, where these trends are actually playing out and then be with a company like LiveOps to consult that problem.
Russ: Yeah, I would imagine you guys really sit at the forefront of knowing, I guess, the consumer’s choice for their communication path, right? You know exactly--well, I don’t know. I’m sure you do, you’re an analytics company, but you know exactly how many tweets are coming in and how many calls. Mobile and landline might be a little more difficult to determine. What have you seen in overall trends? Obviously mobile is exploding. Where are you seeing that gross curve literally erupting?
Marty: Yeah, it’s a great question. I mean the biggest change is only two, three years ago 95% plus of the customer support interactions were through the phone, mobile or landline, it didn’t really matter. Voice, let’s just call it voice. We’re seeing environments in some of our customers where that has dropped down to 50% and it’s been replaced by tweets, posts on Facebook, a lot of web chat, e-mail, text messages. So you’re seeing this new channels, let’s call it that, growing incredibly rapidly. So you’re not necessarily seeing voice go away or voice decline, you’re just seeing the overall pie of interactions continue to increase and get more complex.
One example is Twitter has had a huge impact on call centers. People grab their mobile device, they tweet very quickly about whether they’re happy or unhappy about an interaction that they have. That’s been growing just at a phenomenal rate, so more interactions, more complex interactions, voice becoming a smaller part of the overall pie.
Russ: So, we’ve talked about Twitter and I’m sure it’s Facebook and Twitter and mobile. What’s on the periphery? What are you seeing on the outside that’s starting to grow? Six months ago or a year ago you would have been like, “There’s no way.”
Marty: Yeah, you hear a bit more and a bit more questions about video. I actually want to see the agent that’s helping me. I want to have a very similar to the interaction that we’re having right now could be somebody, more of a video interaction with the actual agent. In some cases that can be really efficient. So if it’s a question that requires a visual element where a person might actually be able to hold up a device or let’s say show a picture of their TV set or something that’s broken or wrong.
You can imagine that video can be a very efficient way of dealing with that problem. So you hear a bit more about that. Then you hear about other social channels that are coming into play. So for example, LinkedIn be an example or Instagram be an example, just new ways that people are interacting in addition to Twitter and Facebook in the more dominant social channels.
Russ: So as a company, how do you determine when that channel has reached, I guess, maturity enough to bring it into your toolset? Your business development folks are saying this is something that’s on the edge or is it your customers demanding that you start taking pictures from Instagram?
Marty: It’s a good question. One of the challenges when you run a company sometimes if you just wait and tell your staff a whole bunch of customers are saying I need this, maybe you’re a bit late. Sometimes you do have to react to it and you see it in your hotline, your Salesforce is saying, “Hey, we really need this capability.” Also in the case of for example SMS or Twitter, we were really early on that. We just made a bet that social channels and particularly mobile as the device used to create that social channel, like I’m twitting from my cellphone that that was going to really have an impact. We just made that bet and I’m glad we did. Because when we came out of our product notice LiveOps Engage really good timing because it was hitting a need that had already grown.
I think to answer your question, sometimes you’re trying to get out in front of it and you’re making a bet. Other times you’re reacting to things in the pipeline. If it’s becoming big enough you’ve got to react and you need to move.
Russ: So most of your companies or most of your customers you publicly exposed are pretty large organizations with mega call centers. Are you guys looking to bring that market down into the mid market or down even into the small and medium sized business channel? Are you really kind of focused on that enterprise engagement?
Marty: I would say in almost all cases they’re what you call enterprise, but I would say the vast majority of our customers are midsized. By that we define it not so much by the size of the company, it’s the size of the contacts are. It’s the size of their actual customer support organization. So, customers of ours like Symantec, they’re going to have a very large customer contact center, very complex. We deal with all kinds of midsized companies that might have 50 agents, 75 agents and they just happen to have fairly complex interactions, maybe more than just voice. Also, the other thing is they’re just cloud. Like a lot of midsized companies that have already made the decision, they’re not going to do anything on premise they’re going to go cloud. Obviously, we’re a pure cloud provider so that’s a place that we’re going to play very strongly.
Russ: It would be interesting to see how, I guess, the cloud channel kind of takes off in that SMV world to leverage those tools. As you guys have been out there and adopting and moving quickly and really expanding your portfolio quite significantly in products, what are the real challenges for you as CEO to kind of manage that growth and manage that explosion?
Marty: Yeah, that’s a good question. In 2012 we grew almost 80% of this business. We had just explosive growth. I would say this year we’re approaching that growth again. Our pipeline has been expanding very quickly and just our business so that one of the biggest challenges I have is just installing our new customers as quickly as possible. So this is a professional services and operations challenge where you’re having huge success in the field and you want to make sure that you really provide awesome service to those customers. So one of the challenges is just getting business implemented as quickly as possible and then the other challenge is scaling up the infrastructure to handle this new capacity that’s hitting our cloud platform.
LiveOps is just now starting to go international so we’ve been primarily a US focused company. So of course as soon as you start going international that brings new complexities. So it’s a good problem to have. I mean it’s a growth problem that’s kind of like we’re growing. It’s putting pressure on professional services. It’s putting pressure on the infrastructure. We just need to move as quickly as possible. It’s still a problem.
Russ: Yeah, so the infrastructure is an ensuing problem because it generates a linear scale. You add X number of customers you add X new servers. On your operational side how are you dealing with that? Are you optimizing processes and are you just adding heads or are you doing a little bit of both. What’s your mindset on that?
Marty: One of the things you have to do is just preplan for more capacity than you think you’re actually going to need. That’s more of a capital expenditure. Let’s put in more servers that we think we even need right now, because if things keep going this way, we’re going to end up having to need that capacity. There’s that and then obviously, you need to scale up the actual operations team to build a handle on that. LiveOps has been really focused in the last 12 months on building up our sales capability, because again, the demand that we’re seeing, I think we’ve hit the market at a perfect time with the right product. We just needed more feet on the streets. So some of it is capital expenditure and some of it is getting the right people in the right slots and trying to scale up your human capital.
In going international as any CEO knows who starts doing that, you need to be really targeted methodical. If you start spreading too quickly and every market looks good then it gets a little too complex. So we’re trying to be pretty disciplined about which countries we go into so we could be really successful.
Russ: I guess the question I have on that is when you look at that growth and you look at that curve, are you looking six, 12, 18 months out or are you looking at, “Oh my God, I’ve got my pipeline filled and it’s three months?”
Marty: One of the good things about being a SaaS company is you really get very good visibility into your revenue growth and kind of your capacity growth. So you look at your install base and you can project that out pretty accurately. Then you’re looking at your pipeline and what you think your conversion rate is going to be up with those customers etc. We’re at least looking out 12, 15 months in terms of planning for what kind of impact to capacity that is, a company that we need to have to be able to manage that growth. It’s an ongoing process.
LiveOps has been around for ten years. We’ve had a lot of experiences. Like every company, you did some things well, you did some things not so well, you’ve learned a lot. I think we’re pretty lean and pretty efficient on the way we go about those.
Russ: So you mentioned scaling up your sales operation. I did notice on the website and reading through the material that you’ve got a reseller offer and a channel offer. Has that been around since the inception and how that’s going and kind of what percentage of sales are you expecting out of the channel?
Marty: We’d like to get to the point, to answer your last question, ideally we see getting to where maybe 50 to 60% of our revenue is direct and then 40 to 50% is indirect or channel. The company has not been that channel focused in the past. Clearly there’s a huge opportunity for us to do that, so we’ve been working really closely with partners like XO Communications which is a big Telco partner, Telecommunications partner. It’s been very successful for us. We’re just now starting to really put a lot of focus on our channel organization.
The end of this year, I think I start bumping into maybe 20% of my revenue coming through the channel and then I can see going into next year that gets up into the 30 plus percent range and we just keep moving forward. I think I’m always selling direct, but I think I’m also selling indirect over the long term.
Russ: So the XO relationship is interesting because I think the large carriers have been pretty dominant in this space since the inception. They’ve been delivering the systems and the platforms to these call centers. How do you deal with that complexity? I mean I’m sure XO has their own call center product. How do you deal with that? You’re up against the likes of AT&T and Verizon and XO.
Marty: Like in the case of XO, so if you’re a telecommunications provider, your challenge is you’re trying to find value above and beyond just your connectivity services, right? In the case of LiveOps I’ve got all the software and I’ve got the application suite, but I need really strong connectivity. So it’s a no-brainer partnership, no-brainer marriage. XO is great because they’re very aggressive and they’re very focused. So they see us as their contact center partner. We see them as kind of a great small to midsized connectivity partner and we just go to market. We do many, many deals with them per quarter. So it’s been very successful.
I also think unlike maybe Verizon or AT&T they just move fast. The market’s moving fast. As we started this conversation call centers are going through a lot of change, SaaS and cloud companies are experiencing high growth, we’re no different. We just need to move very, very fast because the demands are. So I think we would love to have a variety of partnerships very similar to the XO partnership and maybe don’t need to have those super big partners. Maybe we can just focus on that faster moving more nimble partnerships.
Our software and having a cloud delivery model makes it pretty easy to partner with us. There’s not a lot of training. There’s not a whole lot of--it’s fairly easy for them to understand what we do and to be able to demo it. It’s kind of like, “Do you have a browser?” “Yes.” “Okay, I can demo it.” It’s a very easy product to sort of describe and sell, so that helps.
Russ: Yeah, I always wonder what a contact center manager 20 years ago would look at the systems we have today and head to head would pop up.
Marty: No, it’s funny you say that. The install base of technology from for example Enovia or like a Genesis and some of the more traditional on premise players, it’s out there, right? It was invested in, like you said, 15, 20 years ago. It’s good. It does a good job, but the problem is that it’s primarily voice oriented. It’s expensive. It’s on premise. So all the reasons in the other technology segments companies are looking at cloud applied here. Cloud can get moving faster. We can upgrade our software faster. We can release quicker.
So for example, if I want to add video or let’s say I want to add LinkedIn, it’s a lot easier for me to do that than it would be for Enovia to try to update some on premised gear to be able to handle that. I think having said that, it’s out there. It’s installed. It’s doing its job around voice, so there’s a way to go for this migration to go all the way to cloud, but it’s heading that way.
Russ: Yeah, there’s definitely something to be said for that second mover’s advantage. I look at it in lots of industries where you get the benefit of time and you also get the detriment of time that you haven’t been earning that revenue. You definitely get the benefit of time to make those improvements. If XO is not your competition who is? Who is out there doing similar things if it’s not the carriers?
Marty: So, I think, like I said, if the competition is a customer that just won’t get off their on premise old gear, then that would be a company like Enovia. For companies that have said, “Look, that’s not going to work for me. I need to move cloud and you’re just going into pure cloud,” there are companies like inContact is a competitor of ours that tries to come at it in a somewhat similar fashion. They don’t have near the multichannel strength that we do, but they come from a telephony background, so they’re good on the connectivity and some of the traditional voice software. So that would be a cloud competitor that we would go against. Again, in that case we’re going to focus on our multichannel capability and our understanding of mobile and social and so forth.
Russ: Yeah, this seems like one of those things that you could cobble together three or four or five different services and kind of have a solution. It makes perfect sense to bring it all into one dashboard frankly.
Marty: Right. Correct. So what we try to do is say, “Look, let’s have one code that is focused on an integrated suite of applications for the contact centers.” So we want to the agent who is sitting in front of the screen to be able to see all of those channels, voice, e-mail, chat, Twitter, Facebook, SMS very cleanly on one screen and be able to navigate and pivot between those screens as necessary. So that was the view we took, because if you ever watched an agent in action, they’ll have one screen for voice, and then they’ll try to launch another screen to deal with an e-mail interaction and then another screen to be able to do Twitter interaction. In some cases they’ll have 15 screens in front of them. It’s just way, way too complex.
So we’re very focused on if you make the agent experience good and they feel empowered and they feel like they can do their job well, then the end user or whoever it is and whatever channel they’re on, they’re going to feel well taken care of. That’s a good thing. That’s good experience. So that’s very much the vision we’ve taken is let’s make the agent really powerful and make it simple easy to use. That’s what we’ve done.
Russ: Yeah, and I’ve seen all too often that scenario that you’re talking about. Usually there’s a yellow pad or a spiral bound notebook on the desk which is getting all their notes too and that’s no good either.
Marty: Yeah, we did a survey recently with a company called Harris Interactive was our partner in this, the Harris pool and so forth. We went on and we interviewed a bunch of agents and one of the conclusions we came to is something like 25% of their time is spent navigating those screens that you just mentioned. If you quantify that, you’re getting into the tens of thousands of dollars of just kind of wasted time.
The other thing that was interesting is we interviewed end users. If the end users perceive that an agent is “unhappy” then they start having negative associations with the actual brand and they feel, “The agent is not happy. They’re not feeling good about their job. I’m not feeling good about my interaction here.” Agent happiness is very much perceived by the end user. So you want that experience when you’re talking to an agent they know you. They feel good. You can tell they feel good. They’re providing you good service. All that actually translates into a better ROI for everybody. So it’s very fascinating when we do these interviews and these polls. You can learn a lot about what people are actually experiencing.
Russ: Yeah, it’s great to hear companies like yours that are doing that kind of primary research which is fantastic. I applaud you for that. I know you’re a busy guy. I imagine you’re spending 80 to 100 hours a week at the office trying to figuring all this stuff out and figure out where you go next. That hour or two that you get off a day or a week or a month what are you up to?
Marty: I try to pretend that I’m a good tennis player. My place to go concentrate on stuff that’s not work is out on the tennis court. I kid myself that I’m better than I actually am. I love doing that and spending time with my family, just trying to be focused on having some fun and just getting some exercise and so forth because you’re right. In today’s world it’s always there.
Russ: Yeah, well, unfortunately I think you’re one of the guys making it always there.
Marty: Yeah, that’s true. That’s true. I’m enabling my own, yeah, good point, good point.
Russ: Well, Marty, I appreciate you spending the time with us today. We really enjoyed having you. We wish you all the luck in the 2013 year. It looks like you guys are really off to a banner year.
Marty: Okay, great. Thanks so much.
Russ: Thanks for joining us. This has been Marty Beard from LiveOps. He is the CEO and 2012 Big Awards winner for product of the year for their LiveOps in site product and we’ll see you next time. Thanks everyone.