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Reducing Clients’ Risks Pays Off: Q&A With RightNow CEO Greg Gianforte

You wouldn’t guess there’s a recession under way — at least, not if you were going by RightNow Technologies’ recent earnings. By any measure, the Software as a Service vendor closed the year on a high note, completing seven million-dollar-plus deals in the last quarter.

In fact, CEO Greg Gianforte told CRM Buyer, “our sales teams delivered the highest total bookings in any quarter over the last two years. In the current environment, we believe that is a tremendous achievement.”

Of course, discretionary IT spending is definitely down — but RightNow doesn’t fall into that category, according to Gianforte.

“Our clients view RightNow as essential,” he said. “Talk to any high level executive — they are all saying the same thing: ‘Find a way to cut costs, but be sure to keep our existing customers.’ Which, as it happens, is RightNow’s basic premise.”

CRM Buyer: How is RightNow weathering the economic downturn?

Gianforte:

We are coming off of a strong Q4 with US$140.4 million in revenue for 2008, a 25 percent increase from $112.1 million in 2007; record bookings which drove fourth quarter revenue up 18 percent to $36.1 million from $30.7 million a year earlier; and 59 new customers in the fourth quarter and 260 for the year.

CRM Buyer: What are some of the cost-cutting measures you’ve taken?

Gianforte:

We paused hiring during the Q4, which contributed to the lower headcount. We also eliminated some positions at the end of the year to align resources to the 2009 plan. We are hiring in 2009 to fill key positions that support projects and initiatives that help our two key objectives: take care of customers and grow profitability.

CRM Buyer: How can your products help your customers’ bottom lines in the near term?

Gianforte:

We help our customers save lots of money. One multibillion dollar retailer deployed in Q4 and saw a 50 percent reduction in customer email and an 18 percent reduction in phone calls in three weeks. Our solutions have particular appeal to companies who have lots of consumers in highly competitive markets.

CRM Buyer: What are some of the brightest spots for your company right now?

Gianforte:

Continued revenue growth, new customers, profitability and positive cash [flow from] operations. Also, the economy accelerating the adoption of SaaS, the industry focus on customer experience, our leadership in eService, and our opportunities … with our existing 1,900 customers around agent desktop.

CRM Buyer: How will your company look a year from now?

Gianforte:

I believe we will continue to dominate the eService space and that we will gain even more traction in the contact center. Plus, a tough economy will accelerate the adoption of SaaS, which should help us grow. We have given guidance for 10 percent to 15 percent recurring revenue growth in 2009.

CRM Buyer: You just released Feb ’09. New self-service product registration capabilities seem to be a big component of it. Tell me about it please.

Gianforte:

The Internet has created massive changes in the way consumers buy and the way they are seeking service and support directly from manufacturers. A decade ago, manufacturers had little interaction with the end consumer, instead relying on experts at a local store who could tell consumers everything they needed to know about any product on the shelf. Now, customers have a direct line to the name on the label, and they expect the manufacturer to be ready to provide information whenever they want it.

The self-service product registration empowers customers to take the first step toward a better service experience, while helping companies gain a better understanding of their customers and their buying behavior. Companies can use it to proactively communicate relevant sales offers such as warranties, accessories, and upgrade offers based on the products customers currently own. It personalizes relationships with customers and gets their valuable feedback on products to fuel future development.

CRM Buyer: Judging from your Q4 performance, it would seem that the current economy is good for RightNow. Can you elaborate?

Gianforte:

It is simple — there is an accelerating rate at which SaaS is being adopted as the delivery model. Traditional software takes too much money and time to implement. I have talked to clients and found that some are dealing with [on-premise software] projects that are taking years to come together. The SaaS model removes risk at a time when people are particularly risk averse.

CRM Buyer: Last time we spoke, you were on a world tour, visiting RightNow’s top clients. How did that go?

Gianforte:

Great — it went great. I visited 216 last year, and have set a similar goal for this year. I am not sure I will get to the same number, but certainly 100 to 150 this year.

There is a truism a board member [from a client company] shared with me: ‘The bigger the organization, the further away you are from the truth.’ So, getting to the front lines gets me closer to the truth.”

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