Understanding Customer Needs – A Perspective from Five9
I recently had the opportunity to interview Scott Kolman, SVP of Marketing at Five9, as part of an ongoing study series, sponsored by InsideUp, on the impact of buying committees. Scott is an industry veteran and shared his insights about the contact center industry in general, and Five9’s marketing strategies in particular. Five9, Inc. (NASDAQ: FIVN), is a leading provider of the intelligent cloud-based contact center.
Scott reinforced the notion, supported by results we are seeing in the study to-date, that the influence of IT Managers, when they participate in buying committees sponsored by different Lines-of-Business (LoB), appears to be growing. This could be a consequence of the need to deal with security and data management issues that enterprises face when moving to cloud-based applications.
Contact Center automation is a $24B industry worldwide with 85% of businesses hosting contact center platforms on premises. Initiatives to transition this technology to the cloud are being driven by digital transformation pressures within enterprise accounts and, more recently, turbo-charged by the pandemic. Five9 has seen remarkable growth in the past few years, and, in particular, very strong financial results in the past couple of quarters.
Preferred methods of customer engagement have shifted in many industries and an increasing number of companies are responding to meet that change with the help of Five9. One of the examples Scott highlighted was in the area of telemedicine where demand for contact center technology has spiked dramatically due to COVID-19. As healthcare organizations begin to see improved efficiencies, Scott maintains, and consumers become more comfortable with this approach, this industry is not likely to look back after the pandemic has faded.
In this hyper-growth environment, a crowded marketplace like Contact Center has only become more competitive and noisier. How is Five9 differentiating itself? Five9’s technology differentiation is accomplished by understanding the core business requirements of its customers and providing an open platform that gives customers what they want: choice. That choice is, in turn, driven by a strong ecosystem complementing the Five9 offering with additional partner-provided capabilities. Clients are able to select core components of the Five9 solution that best fit their needs and reflect the company’s position that one size does not fit all. It is this approach that provides clients with the greatest flexibility and a range of options to satisfy immediate and longer-term needs.
Go to Market
Five9 is in a rapid-growth mode. They are achieving this growth by broadening their range of offerings, moving up market to handle bigger installations and expanding into new industries and geographies.
Five9 uses an ABM approach and works closely with sales to develop target accounts in each territory and then determine, in conjunction with sales, the best approaches to pursue opportunities. Results are monitored regularly and performance improvement is constantly sought-after using metrics. Conversion rates from MQL to SQL to new customer is one example. The process is constant and consistent. Improvements are always top of mind.
Scott identified that they have a complex targeting environment. They segment their markets by industry, company size, geography, type of potential partner(s) engaged, business issues / requirements and ultimately on the customers’ preferences. For example, in some geographies, certain types of partners are more prevalent than others and may have specialized industry expertise. Five9 recognizes that they must market to a variety of customer personas. Smaller clients may actually have more complex customer interactions than larger clients and those differences need to be addressed.
Personas and Buyer Behavior
Five9 recognizes it’s the market, not the vendor, that defines the required approach. The job at hand is to understand their audiences’ business needs and their particular buying behaviors.
Five9 has a broad range of target personas that perform various roles. Scott started off by describing how, just a few years ago, IT was excluded from LoB decision-making, but now they have become a core part of buying committees for contact center technology. Historically, LoB’s would acquire SaaS-based platforms and not even inform IT. Now, consensus-building with IT is needed to address issues like integration with legacy systems and security.
It used to be that Five9 would only pursue heads of customer care or contact center roles. Today, the mix is far more complicated as the role and scope of contact center technology expands. Their target audience now includes a range of influencers representing various corporate departments, such as sales, marketing, operations and finance. It also includes a wide spectrum of external analysts, influencers and partners. C-level executives can also be involved as contact centers have transitioned from cost centers to revenue centers. Vendor selection has become a far more strategic decision as business continuity (in the face of unforeseen disruption) is considered a critical success factor. Whether we blame the pandemic or hurricanes, having the flexibility provided by a web-based, virtual contact center is now seen as “table stakes”.
Five9 begins with a broad vision to provide thought leadership education and enablement. From customer success stories that feed ROI models to demand generation programs and co-marketing initiatives with partners, Five9 executes across a broad spectrum of marketing channels – including the occasional industry event. Examples include CIO roundtables where issues like security and integration can be addressed. Buying committees at larger enterprises provide unique opportunities for additional engagement strategies.
Role of Partners
Scott started this section off by declaring that partners are becoming increasingly important to Five9’s growth. As Five9 targets small businesses all the way to the very largest enterprises across multiple industries and geographies, they are seeing partners emerge as important influencers in driving business. The types of partners vary depending, again, on the size of the client, their industry, geography and even the customer’s preference.
Five9 must operate and make decisions on how to engage clients depending on the types of partners involved as well. Overlaying the diverse value-add of Master VARs, ISVs, large service providers and technology vendors leads to a complexity (about who to include in messaging and their relative influence on the sales process) that is quite significant.
Geographic expansion around the globe has seen a growing need for partners who have a presence in local regions and understand local business issues. Supporting their partner network requires an equally broad set of partner assistance from providing basic enablement and education about the Five9 platform to lead generation programs.
Scott feels that a critical success factor moving forward is maintaining an understanding of the constantly evolving, core needs of their customers and adapting their solution offering as necessary. This is facilitated by their continued commitment to a strong partner ecosystem. Also, Five9 is expanding their vision, as clients’ needs dictate, into the areas of AI, workforce optimization et al.
Ultimately, they need to help their clients better understand how to grow their own businesses through effective contact center technologies and best practices. They seek to help their clients leverage contact centers as a gateway into the authentic Voice of Customers.
As if to prove the point expressed by Scott during our interview the previous day, Five9 recently announced it has acquired Inference Solutions to enrich their AI offering.
The long-range forecast for the contact center space is quite positive. I expect to see more moves by Five9 as they adapt and leverage their market position to continue their accelerating growth.