five9 award write up

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  • 2016 North American Cloud Contact Center

    Customer Value Leadership Award

    2016

  • BEST PRACTICES RESEARCH

    Frost & Sullivan 2016 2 We Accelerate Growth

    Contents

    Background and Company Performance ........................................................................ 3

    Industry Challenges .............................................................................................. 3

    Customer Impact and Business Impact ................................................................... 3

    Conclusion........................................................................................................... 7

    Significance of Customer Value Leadership .................................................................... 8

    Understanding Customer Value Leadership .................................................................... 8

    Key Benchmarking Criteria .................................................................................... 9

    Best Practice Award Analysis for Five9 .......................................................................... 9

    Decision Support Scorecard ................................................................................... 9

    Customer Impact ............................................................................................... 10

    Business Impact ................................................................................................. 10

    Decision Support Matrix ...................................................................................... 11

    The Intersection between 360-Degree Research and Best Practices Awards ..................... 12

    Research Methodology ........................................................................................ 12

    Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 13

    About Frost & Sullivan .............................................................................................. 14

  • BEST PRACTICES RESEARCH

    Frost & Sullivan 2016 3 We Accelerate Growth

    Background and Company Performance

    Industry Challenges

    Cloud contact center providers are enjoying an upswing in interest and adoption in North

    America. The uncertainties that dampened adoption of cloud applications five years ago,

    including concerns over reliability, scalability, and security, have mostly dissipated, and

    cloud adoption is now at an all-time high.

    But with new opportunity comes various challenges, particularly with so many contact

    center providers as well as enterprises jumping on the cloud bandwagon. New market

    entrants have emerged; while existing cloud participants have added contact center

    functionality organically and through partnerships or acquisitions and legacy contact

    center systems providers now offer cloud-based versions of existing solutions.

    The primary challenge for any provider in this space is to differentiate themselves, proving

    real business value now and in the future. This entails excelling at core competencies in

    the contact center, while enriching applications to address ongoing challenges that impact

    customer service delivery. Cloud providers must help improve agent productivity and

    empowerment, increase employee satisfaction and engagement, reduce agent churn,

    increase satisfaction, and enhance the Customer Experience.

    Customer Impact and Business Impact

    Criterion 1: Customer Purchase Experience

    With over fifteen years of cloud experience, Five9 is one of the leading providers of cloud

    contact center software. Five9 was founded in 2001, introducing its Virtual Contact Center

    (VCC) platform in 2003. This early entry into the cloud market has given it a breadth of

    experience that many in the industry have tried to match, particularly legacy contact

    center systems providers that have only recently introduced cloud versions of their

    original products.

    Being an early entrant has allowed Five9 to build expertise in cloud application delivery, as

    well as innovate faster than most cloud contact center players. The VCC platform provides

    a wide breadth of applications, including many features and applications others are just

    starting to deploy. For example, it has advanced capabilities such as proactive/predictive

    chat functions, and visual support capabilities leveraging WebRTC, with full multimodality,

    escalation/de-escalation, and channel blending, to name a few.

    In 2015, to ensure that customers receive the most technologically advanced platform,

    Five9 rolled out its Freedom Release, which was a complete refresh of its VCC platform.

    Freedom is a modern microservices-based Web architecture that includes an HTML5

    browser-based agent desktop, a rich REST API layer, and new CRM adapters called Plus

    Adapters, which provide deep integration into a growing number of CRM applications.

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    Frost & Sullivan 2016 4 We Accelerate Growth

    All domains were upgraded to the Freedom Server Release in mid-2015. Five9 took into

    account the needs of its customers by doing a phased roll-out of its Plus Applications. At

    launch, the platform supported both legacy java client and the new agent Web user

    interface so that customers could allow their agents to use whichever desktop they were

    comfortable with, pacing upgrades and reducing agent churn and onboarding costs. Less

    than a year into the launch Five9 has thousands of agents on the new desktop.

    This type of care to ensure that customer needs are met is one of the hallmarks of the

    purchasing experience for Five9 customers.

    Criterion 2: Price/Performance Value

    Five9 provides a wide range of contact center functionality for the North American and

    global markets on an integrated and efficient platform. The VCC platform was built in-

    house, from the ground up, and initially just provided support for outbound dialing, but

    has since grown to support the full spectrum of contact center functionality including

    inbound, outbound, and blended agent capability for in-house, outsourced, and work-at-

    home agents and remote experts. The platform also delivers voice self-service (IVR),

    WFM, QM, analytics, and social, mobile, email, chat, and Web interactions.

    Five9s offering prices include training, support, and additional value. The company

    provides simplified pricing, and typically the basic product includes a set of features and

    bundled plans with unlimited talk-time and monthly per-agent fees, but it is also possible

    to charge for unbundled pricing.

    Delivering from the cloud means that Five9 provides swifter deployment and faster time to

    value, giving companies faster access to new product and feature developments. In

    addition, it provides greater business agility, flexibility, scalability, and business

    continuity/disaster recovery.

    Criterion 3: Customer Ownership Experience

    Customers have come to expect enhancements to existing capabilities as well as new

    applications, often earlier than others in the market. For example, social media as a

    customer contact channel gained real momentum around 2010, and contact center

    participants began to toy with its use and partner with companies providing it. In 2013,

    Five9 had the smarts to acquire one of the most innovative of the social media companies

    at the time, when it acquired SoCoCare, a social media monitoring, analytics, and

    response company.

    One of the key pieces of the acquisition was a natural language processing (NLP) engine,

    branded Five9Connect, which processes through all text-based interactions, to influence

    routing decisions or provide insight to agents with context and other factors. Business

    rules can then automatically route posts to the appropriate agent or agent group for

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    Frost & Sullivan 2016 5 We Accelerate Growth

    response. Responses also can be prioritized by author sentiment, social influence, and

    customer value. The company now provides a stand-alone solution called Five9 SoCoCare,

    as well as a version that is integrated into the VCC platform, called Five9 Social.

    The Five9 social solutions were built from the ground up for contact centers, unlike some

    other social media engagement platforms. These applications provide robust agent tools

    that offer things like next-best actions based on rules and policy, and a panoramic

    customer journey timeline giving agents a complete history of social, email, and chat

    interactions with that customer.

    Along these lines, in its most recent release, Five9 improved the capabilities of the agent

    desktop, giving agents deep visibility into the customer journey, historically and in real-

    time. For instance, it introduced a preview chat function that appears when business rules

    indicate that a customer on the web is perhaps struggling. This pops up onto the agent

    desktop information about the journey that the customer is on, from the pages they have

    clicked to, to things like what they are looking at or putting into a shopping cart. It has

    presence indicators that change if the customer leaves the website and goes to another

    one as well. This tool enables the agent to see how the customer is progressing, along

    with predictive scoring that shows if the journey is matching the desired business

    outcome. This, along with next best action suggestions, allows the agent to intervene if

    necessary, and engage with that customer for help, or click a withdraw button if it appears

    that the customer is progressing well on their own. The agent has access to all prior

    interaction journey maps as well. This type of innovative agent capability was unheard of

    a decade ago.

    Criterion 4: Customer Service Experience

    Five9 has more than doubled its investment in Professional Services in the last 18 months,

    adding skilled and experienced program managers and engineers as well as specialized

    contact center experts in the areas of CRM, network connectivity, workforce management,

    and other key areas. The companys professional services resources employ an

    established consultative methodology, employing best practices to develop solutions for

    each customers unique business requirements.

    In addition to standard customer support, Five9 offers premium support with a dedicated

    account manager. Although this includes an extra monthly fee, customers have been

    investing heavily in this. In 2015, its North American customers had a 90% uptake rate

    for this service. This premium support differentiates the company from others by ensuring

    that it remains customer-centric and keeps the churn rate low.

    Finally, in October, 2015, Five9 became one of the few contact center companies to

    publish a Trust Site for visibility on reliability that allows anyone (not just customers) to

    see its reliability statistics over the last twelve months (the average monthly availability

    for the last year). Five9 customers can log in to get more detailed information, such as

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    Frost & Sullivan 2016 6 We Accelerate Growth

    notifications on the API layer, and access other metrics regarding their own operations.

    Criterion 5: Financial Performance

    Five9 is a publicly traded company (FIVN) with more than 700 employees, 2,000

    customers globally, and fields approximately 3 billion interactions per year. Organic

    revenue has grown rapidly over time, increasing at a 37% CAGR from 2009-2015. For the

    2015 fiscal year, the company had a 25% year-over-year increase of revenue to $129

    million, and a record fourth quarter for turn-ups. It now supports 55,329 concurrent agent

    seats or 82,994 named seats, which is a 19% increase over the prior year.

    Historically, Five9 has catered to the small- to mid-sized market. However, it entered the

    enterprise space a few years back and is now supporting healthy growth in the enterprise

    market as well, with 38% growth year-over-year in enterprise subscription revenue in

    2015, which further accelerated to 39% for the last 12 months ended March 31, 2016.

    Also, enterprise revenue represented 65% of total 2015 revenues and increased to 66%

    for the last 12 months ended March 31, 2016, driving a strong annual dollar-based

    retention rate of 98% through Q1 2016.

    Moreover, Five9 continues to execute on its path to profitability, achieving two

    consecutive quarters of positive adjusted EBITDA through Q1 2016 with breakeven

    operating cash flow. This is primarily due to the enterprise business driving high marginal

    profitability of 64% for the last twelve months, compared to an average of 10% for the

    SaaS universe (Marginal profitability is measured as the percentage of revenue growth

    that drops to the adjusted EBITDA line. The SaaS universe is comprised of 57 companies).

    Criterion 6: Growth Potential

    Five9 has an attractive offer in a growing market, and continues to enhance its solutions

    based on anticipating and paying attention to evolving customer requirements. In its

    latest summer release of its Freedom architecture, the company introduced attractive

    enhancements to existing features/applications. These included enhancements to increase

    omnichannel engagement, proactive and predictive engagement functionality including

    predictive web analytics, and customer journey analytics including visual display of the

    lifetime customer journey on the agent desktop. Five9 also added to or improved CRM

    integrations, including those for Microsoft Skype for Business, Microsoft Dynamics and

    Zendesk.

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    Conclusion

    Contact Center stakeholders are looking for providers that offer a wide breadth of

    customer care functionality, flexibly, reliability, and at competitive price points. They are

    also looking for suppliers who can add features that keep pace with todays rapidly

    changing customer care needs. Five9 provides a reliable, scalable, feature-rich platform

    and a continual stream of innovative solutions for its customers. Its for these reasons and

    others that Five9 has earned Frost & Sullivans 2016 Customer Value Leadership Award for

    Cloud Contact Centers in North America.

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    Frost & Sullivan 2016 8 We Accelerate Growth

    Significance of Customer Value Leadership

    Ultimately, growth in any organization depends upon customers purchasing from your

    company, and then making the decision to return time and again. Delighting customers is

    therefore the cornerstone of any successful growth strategy. To achieve these dual goals

    (growth and customer delight), an organization must be best-in-class in three key areas:

    understanding demand, nurturing the brand, and differentiating from the competition.

    Understanding Customer Value Leadership

    Customer Value Leadership is defined and measured by two macro-level categories:

    customer impact and business impact. These two sides work together to make customers

    feel valued, and confident in their products quality and long shelf life. This dual

    satisfaction translates into repeat purchases and a high lifetime customer value.

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    Frost & Sullivan 2016 9 We Accelerate Growth

    Key Benchmarking Criteria

    For the Customer Value Leadership Award, Frost & Sullivan analysts independently

    evaluated two key factorsCustomer Impact and Business Impactaccording to the

    criteria identified below.

    Customer Impact

    Criterion 1: Price/Performance Value

    Criterion 2: Customer Purchase Experience

    Criterion 3: Customer Ownership Experience

    Criterion 4: Customer Service Experience

    Criterion 5: Brand Equity

    Business Impact

    Criterion 1: Financial Performance

    Criterion 2: Customer Acquisition

    Criterion 3: Operational Efficiency

    Criterion 4: Growth Potential

    Criterion 5: Human Capital

    Best Practice Award Analysis for Five9

    Decision Support Scorecard

    To support its evaluation of best practices across multiple business performance

    categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

    allows our research and consulting teams to objectively analyze performance, according to

    the key benchmarking criteria listed in the previous section, and to assign ratings on that

    basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;

    ratings guidelines are illustrated below.

    RATINGS GUIDELINES

    The Decision Support Scorecard is organized by Customer Impact and Business Impact

    (i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each

    criteria are provided beneath the scorecard). The research team confirms the veracity of

    this weighted scorecard through sensitivity analysis, which confirms that small changes to

    the ratings for a specific criterion do not lead to a significant change in the overall relative

    rankings of the companies.

  • BEST PRACTICES RESEARCH

    Frost & Sullivan 2016 10 We Accelerate Growth

    The results of this analysis are shown below. To remain unbiased and to protect the

    interests of all organizations reviewed, we have chosen to refer to the other key players

    as Competitor 2 and Competitor 3.

    DECISION SUPPORT SCORECARD FOR CUSTOMER VALUE LEADERSHIP AWARD

    Measurement of 110 (1 = poor; 10 = excellent)

    Customer Value Leadership

    Customer

    Impact

    Business

    Impact Average Rating

    Five9 9 9 9.00

    Competitor 2 8 7 7.50

    Competitor 3 7.5 7 7.25

    Customer Impact

    Criterion 1: Price/Performance Value

    Requirement: Products or services offer the best value for the price, compared to similar

    offerings in the market

    Criterion 2: Customer Purchase Experience

    Requirement: Customers feel like they are buying the most optimal solution that

    addresses both their unique needs and their unique constraints

    Criterion 3: Customer Ownership Experience

    Requirement: Customers are proud to own the companys product or service, and have a

    positive experience throughout the life of the product or service

    Criterion 4: Customer Service Experience

    Requirement: Customer service is accessible, fast, stress-free, and of high quality

    Criterion 5: Brand Equity

    Requirement: Customers have a positive view of the brand and exhibit high brand loyalty

    Business Impact

    Criterion 1: Financial Performance

    Requirement: Strong overall financial performance in terms of revenues, revenue growth,

    operating margin and other key financial metrics

    Criterion 2: Customer Acquisition

    Requirement: Customer facing processes support the efficient and consistent acquisition of

    new customers, even as it enhances retention of current customers

    Criterion 3: Operational Efficiency

    Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high

    quality standard

  • BEST PRACTICES RESEARCH

    Frost & Sullivan 2016 11 We Accelerate Growth

    Criterion 4: Growth Potential

    Requirements: Customer focus strengthens brand, reinforces customer loyalty and

    enhances growth potential

    Criterion 5: Human Capital

    Requirement: Company culture is characterized by a strong commitment to quality and

    customers, which in turn enhances employee morale and retention

    Decision Support Matrix

    Once all companies have been evaluated according to the Decision Support Scorecard,

    analysts can then position the candidates on the matrix shown below, enabling them to

    visualize which companies are truly breakthrough and which ones are not yet operating at

    best-in-class levels.

    DECISION SUPPORT MATRIX FOR CUSTOMER VALUE LEADERSHIP AWARD

    High

    Low

    Low High

    Bu

    sin

    ess I

    mp

    act

    Customer Impact

    Five9

    Competitor 2

    Competitor 3

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    Frost & Sullivan 2016 12 We Accelerate Growth

    The Intersection between 360-Degree Research and Best

    Practices Awards

    Research Methodology

    Frost & Sullivans 360-degree research

    methodology represents the analytical

    rigor of our research process. It offers a

    360-degree-view of industry challenges,

    trends, and issues by integrating all 7 of

    Frost & Sullivan's research methodologies.

    Too often, companies make important

    growth decisions based on a narrow

    understanding of their environment,

    leading to errors of both omission and

    commission. Successful growth strategies

    are founded on a thorough understanding

    of market, technical, economic, financial,

    customer, best practices, and demographic

    analyses. The integration of these research

    disciplines into the 360-degree research

    methodology provides an evaluation

    platform for benchmarking industry players and for identifying those performing at best-

    in-class levels.

    360-DEGREE RESEARCH: SEEING ORDER IN

    THE CHAOS

  • BEST PRACTICES RESEARCH

    Frost & Sullivan 2016 13 We Accelerate Growth

    Best Practices Recognition: 10 Steps to Researching,

    Identifying, and Recognizing Best Practices

    Frost & Sullivan Awards follow a 10-step process to evaluate award candidates and assess

    their fit with select best practice criteria. The reputation and integrity of the Awards are

    based on close adherence to this process.

    STEP OBJECTIVE KEY ACTIVITIES OUTPUT

    1 Monitor, target, and screen

    Identify award recipient candidates from around the globe

    Conduct in-depth industry research

    Identify emerging sectors Scan multiple geographies

    Pipeline of candidates who potentially meet all best-practice criteria

    2 Perform 360-degree research

    Perform comprehensive, 360-degree research on all candidates in the pipeline

    Interview thought leaders and industry practitioners

    Assess candidates fit with best-practice criteria

    Rank all candidates

    Matrix positioning all candidates performance relative to one another

    3

    Invite thought leadership in best practices

    Perform in-depth examination of all candidates

    Confirm best-practice criteria Examine eligibility of all

    candidates Identify any information gaps

    Detailed profiles of all ranked candidates

    4

    Initiate research director review

    Conduct an unbiased evaluation of all candidate profiles

    Brainstorm ranking options Invite multiple perspectives

    on candidates performance Update candidate profiles

    Final prioritization of all eligible candidates and companion best-practice positioning paper

    5

    Assemble panel of industry experts

    Present findings to an expert panel of industry thought leaders

    Share findings Strengthen cases for

    candidate eligibility Prioritize candidates

    Refined list of prioritized award candidates

    6

    Conduct global industry review

    Build consensus on award candidates eligibility

    Hold global team meeting to review all candidates

    Pressure-test fit with criteria Confirm inclusion of all

    eligible candidates

    Final list of eligible award candidates, representing success stories worldwide

    7 Perform quality check

    Develop official award consideration materials

    Perform final performance benchmarking activities

    Write nominations Perform quality review

    High-quality, accurate, and creative presentation of nominees successes

    8

    Reconnect with panel of industry experts

    Finalize the selection of the best-practice award recipient

    Review analysis with panel Build consensus Select winner

    Decision on which company performs best against all best-practice criteria

    9 Communicate recognition

    Inform award recipient of award recognition

    Present award to the CEO Inspire the organization for

    continued success Celebrate the recipients

    performance

    Announcement of award and plan for how recipient can use the award to enhance the brand

    10 Take strategic action

    Upon licensing, company may share award news with stakeholders and customers

    Coordinate media outreach Design a marketing plan Assess awards role in future

    strategic planning

    Widespread awareness of recipients award status among investors, media personnel, and employees

  • BEST PRACTICES RESEARCH

    Frost & Sullivan 2016 14 We Accelerate Growth

    About Frost & Sullivan

    Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

    and achieve best in class positions in growth, innovation and leadership. The company's

    Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

    research and best practice models to drive the generation, evaluation and implementation

    of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in

    partnering with Global 1000 companies, emerging businesses and the investment

    community from 31 offices on six continents. To join our Growth Partnership, please visit

    http://www.frost.com.

    http://www.frost.com/

    Five9 Cover PageFive9 Award Write Up