Decision Matrix: selecting a provider of hosted customer outreach in North America

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1 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 1 Decision Matrix: selecting a provider of hosted customer outreach in North America Executive summary In a nutshell In recent years, customer outreach has been one of the most in-demand contact center solutions. In this Decision Matrix, Ovum examines providers of hosted customer outreach serving North American enterprise markets, focusing on those providers with deployments across multiple verticals and highly scalable solutions designed for large enterprise customers. We also examine the competitive dynamics within the customer outreach market, which will benefit enterprises searching for a customer outreach suite and vendors looking for partnership opportunities. Ovum segments vendors based on technological strength, customer reputation, and market impact. We also provide a view of vendor capabilities and advise on those who should be considered or shortlisted. Ovum view Many vendors have expertise in customer outreach solutions. However, Ovum believes the following providers are notable: SoundBite and Varolii are shortlisted because of each vendor s combined rankings in technology assessment, end-user sentiment, and market impact. They are recognized as leaders in hosted customer outreach and applications for customer service in North America. Adeptra, Nuance, and Tellme are the primary challengers. The vendors respective solutions have some significant merits and could easily find itself on the shortlist, especially as they grow their customer relationships, or as their product offerings, and/or partnerships change and develop in the coming years. Other notable providers of hosted customer outreach profiled, but not ranked, in this report include LiveVox, West Interactive, and Voxeo. Customers interested in a customer outreach solution should consider these vendors as well.

2 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 2 Competitor overview A fragmented landscape The competitive landscape for hosted customer outreach solutions is incredibly fragmented. The landscape is represented in Figure 1. Figure 1 Hosted customer outreach competitive landscape Source: Ovum Ovum looked exclusively at providers of hosted customer outreach and solutions with deployments across numerous verticals. This effectively eliminated shops that

3 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 3 cater to specific industries, such as Silverlink (healthcare) or Blackboard (education). This isn t to discount their contributions to the outbound space; it s simply unfair to rank a heavily verticalized solution against a more horizontal solution. Similarly, Five9 s concentration with SMBs means it shouldn t be assessed in this report, where scalability for large enterprise customers is a major consideration. If anything, Ovum s issues in determining which vendors to include in this report underscore the current fragmentation of the customer outreach market. In general, Ovum breaks down the competitors into the following categories. Large providers of hosted inbound IVR These are nominally contact center providers with significant business selling hosted IVR platforms. While most of their business is inbound, these vendors have been expanding to accommodate growing demand for outbound applications. Advantages: These providers emphasize the importance of having a converged inbound-outbound strategy. For enterprises that want consistency between their inbound and outbound customer service instead of a pure-play outbound solution, these vendors are a viable option. Many of these vendors are experts at providing a robust architecture to develop and roll out their hosted services. Dedicated outbound providers These vendors have demonstrable expertise handling customer outreach across a variety of verticals. Because these vendors specialize in outbound communications, they offer tools that give enterprises significant control over their outbound campaigns. Typically, they offer tools and analytics that track outbound interactions at an extremely granular level. Advantages: These vendors typically offer the most advanced tools for initiating and managing proactive communication campaigns delivered across numerous channels. Enterprises that need precision in reaching out to their customers should look at these vendors. Moreover, dedicated outbound providers are generally more knowledgeable about the specific human factors that influence the efficacy of customer outreach. Vertical-specific vendors These smaller providers constitute a significant portion of existing outbound deployments today. Silverlink, for instance, has a significant presence in healthcare. Blackboard has significant presence in education. Due to the horizontal solution focus in this Decision Matrix, these providers are not included. It would not be a fair evaluation to compare them on the same scale as the large, dedicated outbound providers and providers of more general contact center solutions.

4 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 4 Advantages: These vendors have industry-specific expertise and knowledge of issues and legislation affecting specific industries. Their solutions are highly verticalized packages. Carriers Carriers such as Verizon Business, AT&T, and Qwest all provide hosted outbound services. However, these solutions target vendors instead of enterprise customers. Because vendor needs for outbound are different to enterprise needs for outbound, hosted outbound solutions from carriers are not included in this report. The hosted customer outreach Decision Matrix Five vendors assessed according to technical, market, and customer scores Ovum rated five providers of hosted customer outreach and applications in this Decision Matrix (Table 1). These vendors are among the leading providers of customer outreach in North America today. Table 1 Customer outreach solutions providers rated in this report Vendors rated in this report Adeptra Nuance SoundBite Tellme Varolii Vendors profiled in this report Angel LiveVox Teleperformance VoltDelta Voxeo Voxify Source: Ovum This report assesses these vendors based on three criteria: their respective technical capabilities, their market impact, and the scores provided by their enterprise customers in an end-user sentiment survey. The Decision Matrix is represented in Figure 2. Ovum also provides guidance for enterprises looking to deploy customer outreach and places vendors in the Shortlist and Consider categories using aggregated results. The individual criteria constituting the overall decision matrix score can be found on individual vendor radars. The following definitions are used for each of these recommendations: Shortlist The solutions provided by these vendors should be placed on an enterprise s shortlist selection. This category represents the leading providers

5 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 5 based on strong technology, positive customer feedback, and firm financial footing. Consider The vendors in this category have good market positioning and expertise in customer outreach. Their offerings provide competitive functionality, performance, and in some cases price, and they should be considered as part of the technology selection process. Figure 2 The hosted customer outreach Decision Matrix Nuance SoundBite End-user Sentiment (Scale 0-10) 7.0 Tellme Varolii 6.0 Adeptra Technology assessment (Scale 0-10) Source: Ovum What surprised Ovum most about this figure is that significant technological ability did not always correspond with high ernd-user sentiment scores. Vendors that would otherwise be leaders, based on their technologies and solutions, were in general penalized by customers for what they perceived as a lack of support and client engagement. While vendors were occasionally ranked by former customers, the weighting system (described in the End-user sentiment section of this report) was designed to normalize the rankings. Before assessing the true value of each vendor s customer outreach suite, enterprises need to assess their own strategy and see if it aligns with each vendor s respective strengths. For instance, those that want an outbound strategy in conjunction with a sophisticated inbound strategy might tend more toward

6 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 6 Nuance or Tellme. If fraud and compliance to security standards are major concerns, then enterprises should consider Adeptra. Varolii, SoundBite, and Adeptra all have significant experience deploying sophisticated and interactive customer outreach solutions that cross multiple channels. Consequently, Ovum s recommendations of shortlist and consider should be evaluated only within the context of an enterprise s customer-service goals and overall strategy. Market leaders It s not entirely surprising that the two vendors whose business revolves around large-scale hosted proactive customer-service communications, Varolii and SoundBite, are both in Ovum s shortlist category as leaders in their fields. Overall, they received the highest cumulative scores in technology assessment, end-user sentiment, and market impact. In recent months, SoundBite has begun focusing its attention on fraud, an area typically dominated by Adeptra, and on bolstering its mobile strategy. Additionally, SoundBite has integrated a predictive dialer into its platform for customers that want to improve agent-assisted service. SoundBite s biggest asset within the context of this report is its overwhelming end-user sentiment scores in nearly all categories. SoundBite s customers were also encouraged by the vendor s strong financial standing. These scores were bolstered by the strong technological underpinnings of SoundBite s solutions, specifically with regard to its features and functionality, and its scalability. Varolii is also a large pure-play provider of hosted proactive customer-service communications and actually surpassed SoundBite in the technical categories. Varolii ranked highest among all vendors in its production support, its services offered, the features and functionalities of its solution, and its ability to integrate customer data. Varolii has been looking into adding more verticalspecific applications to expand its offering and speed deployment. Additionally, the vendor has a strong channel for sales into the mid-market. Varolii s position was hindered, however, by its end-user sentiment scores. While customers were positive about the vendor s product quality and portfolio, Varolii did not score as highly in customer engagement, support, and services offered. The challengers Adeptra is highly regarded for its work in the financial services area, though it s less visible than its competitors in industries such as hospitality, retail, and healthcare. Of the three challengers, Adeptra is the most well-known as a provider of hosted customer outreach. Though like Nuance and Tellme, Adeptra also emphasizes an integrated inbound-outbound strategy. Adeptra s technology is very strong, particularly in its features and functions, services, and

7 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 7 administration and monitoring capabilities. Had its end-user sentiment scores been higher, Adeptra could have found itself in the shortlist category. Nuance s customer outreach practice came with the 2008 acquisition of MultiVision. Though known in the contact center space as a provider of ASR engines, self-service applications, and inbound contact center solutions, Nuance has been gradually expanding its practice in proactive customerservice communications. While technologically Nuance wasn t as advanced as some of the other vendors in this matrix (it doesn t, for example, have multichannel escalation or blending with outbound services), Nuance s enduser sentiment scores were incredibly strong, leading in support, engagement, and services. As Nuance s solution matures, the vendor could leverage its strong standing with customers to increase deployments of its Notification Hub product. Like Nuance, Tellme is known more as a provider of inbound customer selfservice solutions. The vendor showed impressive abilities in the technical assessment categories, particularly in features and functionality, data integration, production support, and administration and monitoring capabilities; these are some of the strengths that Tellme is known for with its inbound customer self-service solutions. Tellme s end-user sentiment scores, however, were not as high as its technical assessment scores, which affected its standing in the matrix. Market leaders: technology assessment Figure 3 depicts the top vendors in each technology assessment category. Three vendors are displayed in each category, unless multiple vendors have top scores, in which case Ovum presents all vendors with similar scores. Not surprisingly, the vendors that had the most consistently high scores were the market leaders, SoundBite and Varolii. Adeptra also performed well in key areas that involved feature-rich applications and highly scalable solutions. Scalability and reliability is the one area where these vendors tended to separate themselves. Varolii and SoundBite often sent as many communications in a day as their competitors did in a year. The time-sensitive nature of customer outreach means that powerful administration and monitoring tools are imperative. It s not surprising to see Adeptra, with its emphasis on fraud detection, positioned as a leader. Both Tellme and Nuance performed surprisingly well here, leveraging some of the advanced tools they developed for their inbound suites. Nuance, Adeptra, and Varolii were also among the leaders in interoperability. Tellme s value proposition is its hosted multitenant platform; consequently, it doesn t extract its proactive capabilities as a point solution. SoundBite, by contrast, has its own integrated dialer option with its Engage platform.

8 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 8 Figure 3 Market leader analysis: technology assessment Vendor Strategy Production Support Features and Functionality Interoperability Data Integration Services Reliability and Scalability Administration and Monitoring Adeptra Nuance SoundBite Tellme Varolii Source: Ovum Market leaders: end-user sentiment Figure 4 depicts the top vendors in each end-user sentiment category. Three vendors are displayed in each category, unless multiple vendors have top scores, in which case Ovum presents all vendors with similar scores. Respondents rated vendors whose customer outreach applications they are currently using or have used in the past. These scores are briefly discussed in each vendor s profile. Enterprise customers took an online survey in which they assigned a 1 (not impressed) to 4 (extremely impressed) based on a list of criteria relevant to customers. The ranking criteria include: Product quality the customer s perception of the quality of the vendor's hosted customer outreach solution. Portfolio depth the customer s perception of the depth of the vendor's product portfolio in terms of features and capabilities.

9 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 9 Vertical specialization the extent to which the vendor offers industryspecific solutions and expertise. Client engagement the customer s opinion of the effectiveness the vendor's salesforce and channel to market. Services capabilities the quality of a vendor's services offerings including consulting, integration, maintenance, management both during and after deployment. Customer support the quality of the vendor's business/technical support offerings. Financial stability how financially stable customers believe the vendor to be. Ease of integration with third-party vendors ability for solution to integrate and incorporate customer data, back-office processes, and or web channels. Figure 4 Market leader analysis: end-user sentiment Product quality 10 Ease of integration with third party vendors Financial stability Portfolio depth Vertical specialization Client engagement Services capabilities Customer support Adeptra Nuance SoundBite Tellme Varolii Source: Ovum

10 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 10 The number of survey respondents for each vendor varied considerably, with some vendors receiving more than 40 customer responses and others receiving around ten. Additionally, enterprises would often rate vendor solutions that they didn t currently deploy, meaning that they had either migrated to a competitor s solution, or had assessed the vendor s solution and had decided against deployment. To account for both of these discrepancies, Ovum weighed each vendor s end-user sentiment score as follows: customer responses The average of the scores given by current customers were weighed 70%. The average of the scores given by former or non-customers were weighed 30% customer responses The average of the scores given by current customers were weighed 75%. The average of the scores given by former or non-customers were weighed 25%. 21 plus customer responses The average of the scores given by current customers were weighed 80%. The average of the scores given by former or non-customers were weighed 20%. SoundBite was the most consistent vendor and had impressively high scores across all categories. Nuance was a surprise given its newness in the field. Its customers responded favorably to the vendor s Notification Hub solution particularly in areas such as product quality and ability to integrate with third-party vendors. That Nuance has extensive experience deploying contact center application across a range of verticals appears to have helped its score in vertical specialization. It bears noting that the two areas where Nuance performed the best, customer support and client engagement, were not technological categories. Varolii s customers responded positively to its overall solution: product quality, portfolio depth, and vertical specialization. Tellme also performed well in areas related to integration, capabilities, and client support.

11 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 11 Vendor analysis SoundBite: customer outreach radars SoundBite is a provider of hosted customer outreach solutions and applications. The core of Soundbite s solution is Engage, an on-demand software platform on which clients can design, execute, measure and optimize multi-channel communications campaigns. SoundBite bolsters this offering with its professional services team, which brings domain expertise to applications encompassing collections, customer care, marketing, payments, and fraud or risk management. Key verticals include financial services, communications, media, utilities, retail, healthcare, and collections. The Engage platform is comprised of five pillars: Multi-Channel Communications is a component of the Engage platform providing a comprehensive set of integrated channels, including predictive dialing, voice message alerts, interactive voice messaging, inbound IVR, both standard and free-to-end-user text message, interactive mobile messaging, and messaging. Campaign Strategy Manager provides the intelligence that enables sophisticated communication campaign design and optimization. The capabilities of the campaign management solution include multichannel escalation and blending, preference management (differentiating between stated and observed customer preferences), a dialog engine for automated, interactive messaging, data segmentation, and compliance management. Reporting and Analytics is a comprehensive suite of tools designed to help enterprises drive better business results. SoundBite s professional services team helps customers optimize their practices and achieve the desired results. Contact Center Productivity includes an agent portal and modules to speed integration between SoundBite Engage and technologies provided by telephony and IVR vendors, such as Avaya, Cisco, and Genesys. Core Systems Integrations is a fully-documented web services API that integrates into a client s environment to automate all customer communications, from list-based communications like payment reminders to realtime and event-based communications like fraud notifications. SoundBite designs its solutions to span the full customer lifecycle and optimize contact center productivity and an enterprise s mobile communications strategy. SoundBite s solution is both secure and scalable. The vendor is compliant with Gramm-Leach-Bliley standards, PCI Level 1, SAS 70 Type II, HIPAA and US, EU and Swiss Safe Harbor. SoundBite maintains a large data center footprint and sends more than 2 billion messages annually to consumers globally.

12 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 12 Figure 7 SoundBite hosted customer outreach radars End-user sentiment Product quality 10 Ease of integration with Portfolio depth third party vendors 5 Financial stability 0 Vertical specialization Technology assessment Features and Functionality 10 8 Interoperability (third-party Vendor Strategy 6 dialers/ivr platforms) 4 2 Production Support 0 Data Integration Client engagement Services capabilities Services Reliability and Scalability Customer support Administration and Monitoring SoundBite Average across vendors Maximum category score Revenues Revenue growth Market recognition SoundBite Average across vendors Source: Ovum Recommendation: shortlist As demonstrated by its industry-leading end-user sentiment scores, SoundBite is both highly recognized and highly regarded as a provider of hosted proactive customer-service communications. Customer survey participants had the option of commenting on each vendor, and many were effusive when discussing SoundBite s solution. I have used SoundBite for over two years and I've never been more impressed with the support and ease of setting up new campaigns, was a typical customer comment. Moreover, SoundBite s strong technological assessment scores bolster the vendor s standing: SoundBite leads the industry in strategy, features and functionality, and reliability and scalability. Like Varolii, SoundBite often sent out as many customer outreach in a day as some of its competitors did in a year. The two areas where the vendor performed below the industry norm was in the professional services component, where SoundBite does not offer the extensive consultative or systems integration services that are the hallmarks of some of its competitors. However, this isn t a significant detriment as hosted customer outreach solutions generally don t require the same amount of service requirements as inbound self-service solutions. SoundBite also doesn t integrate with third-party dialer options, though the vendor has integrated its own dialer into the Engage platform.

13 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 13 While revenue growth might not be as positive as the vendor would like, SoundBite remains debt-free, has $36 million in cash, and its sales remain above the industry norm. SoundBite s future prospects are positive as well. With the integration of a predictive dialer, SoundBite aims to expand its business among customers that maintain agent-assisted customer-service strategies; additionally, the vendor has been bolstering its offerings in mobile customer care and fraud management. Ultimately, the combination of high end-user sentiment scores and technological assessment scores places SoundBite solidly in the shortlist category. Further reading Customer Outreach Solutions and Applications in North America June 2010 The Rise of Outbound Applications in an Economic Recession March 2009 Hosted Speech and Outbound IVR Services June 2008 Definitions Contact center Datamonitor defines a contact center by the following features: an ACD or PBX with equivalent functionality overlaid (or soft ACD) ten or more agent positions agent positions are desks from which agents make and/or receive telephone calls to and/or from internal or external customers (this is taken to imply that the call in question involves communication between the agent and the customer). Automated proactive customer communications Automated proactive customer communications are any automated communication sent from an enterprise to a customer with whom it has an existing business relationship. Its principal uses are collections, reminders (payment, product pickup, or appointment), marketing, alerts (such as fraud), and loyalty. These communications can be one-way notifications or interactive. They can be sent over the voice channel, SMS, or . Virtual queuing A solution that bridges the gap between automated customer service and agent-assisted service. In most calls that require transfer to an agent, a customer call is placed in a queue in the automatic call distributor (ACD). The caller must either wait for an agent to become available or abandon the call by hanging up. Virtual queuing solutions give the caller the Estimated Wait Time (EWT) before an agent s availability. The system allows the caller to hang up without relinquishing their place in the queue. When an agent becomes available, the caller receives a callback.

14 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 14 There are two types of callbacks: first in, first out (FIFO) callback the customer gets a callback once an agent becomes available scheduled callbacks the customer schedules a time for an agent callback. Multichannel blending Multichannel blending occurs when a single customer interaction takes place across multiple communication channels. Customers receive information through one channel and respond through a different channel, based on preferences. Summary scores Table 2 summarizes vendor scores in the hosted proactive communications Decision Matrix. Table 2 Hosted proactive communications Decision Matrix: vendor scores summary Vendor Technology assessment End-user sentiment Market impact Adeptra Nuance SoundBite Tellme Varolii Average Minimum Maximum Source: Ovum Ovum ratings Shortlist This category represents the leading solutions that Ovum believes are worthy of a place on most technology selection shortlists. The vendor has established a commanding market position, with a product that is widely accepted as best-ofbreed. Consider The vendors in this category have good market positioning and are selling and marketing their products well. The products offer competitive functionality and

15 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 15 good price/performance, and should be considered as part of the technology selection process. Extended methodology Ovum assesses customer outreach providers based on three core criteria, each of which consists of between eight and ten specific criteria. Taken together, these criteria serve as the basis for Ovum s positioning of vendors as 'shortlist' or 'consider' in the competitive landscape. This information was derived from a series of in-depth interviews with vendors to obtain quantitative and qualitative information. Each vendor provided a list of respondents for the end-user sentiment survey. Technology assessment Ovum analysts assign vendors a score from one to ten for each of the eight assessment criteria, whereas the overall technology assessment is determined by taking the average of these scores. The technology assessment criteria used for the hosted contact center services market include the following: Features and functionality Vendors capabilities for their core proactive customer communications solution including the types of channels supported, which channels support interactive communications, and whether the vendor has multichannel blending functionalities. Dialer and IVR interoperability Vendors ability to integrate with thirdparty IVR platforms and dialers. Data integration Integration capabilities, including options for securing data integration, data transfer mechanisms, and integration into various CRM databases. Reliability and scalability Assessment of solution robustness and scalability. Includes number of data centers, largest deployment, and average deployment times. Administration and monitoring Vendors administrative portals, campaign management, and preference management tools. Also includes reporting and contact history databases. Services List of professional services offered, including consulting, systems integration, and roadmapping. Production support Customer support and options to ensure solution availability. Vendor strategy Includes brand equity (as a provider of proactive customer communications) within the contact center markets, go-to-market strategy, and vendor roadmap.

16 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 16 End-user sentiment As part of each technical assessment, Ovum surveyed nearly 89 users of proactive customer communications. These end users were asked to rate the customer outreach providers that they currently use as well as those that they have formally evaluated; Ovum analyzes the results and provides an average rating in each of the following categories. Product quality the customer s perception of the quality of the vendor's hosted proactive communications solution. Portfolio depth the customer s perception of the depth of the vendor's product portfolio in terms of features and capabilities. Vertical specialization the extent to which the vendor offers industryspecific solutions and expertise. Client engagement the customer s opinion of the effectiveness the vendor's sales force and channel to market. Services capabilities the quality of a vendor's services offerings including consulting, integration, maintenance, management both during and after deployment. Customer support the quality of the vendor's business/technical support offerings. Financial stability how financially stable customers believe the vendor to be. Ease of integration with third-party vendors ability for solution to integrate and incorporate customer data, back-office processes, and or web channels. Market impact Ovum analysts use data collected through primary and secondary research to determine a vendor s global market impact. Market impact is measured across three categories, each of which has a maximum score of ten: revenues Each vendor s global customer outreach revenues are calculated as a percentage of the market leader. This percentage is then multiplied by a market maturity value and rounded up to the nearest integer. The market maturity value is determined in inverse proportion to the rate of global market growth. revenue growth Each vendor s hosted proactive customer communications revenue growth rate from 2008 to 2009 is calculated as a percentage of the fastest-growing company in the market. The percentage is then multiplied by ten and rounded up to the nearest integer. market recognition As part of the survey of nearly 70 end-users, respondents are asked to select the customer outreach vendors of which they are aware. The percentage of the vendor recognition is then divided by the

17 OUTREACH SOLUTIONS AND APPLICATIONS IN NORTH AMERICA 17 highest percentage of vendor recognition, multiplied by ten and rounded up to the nearest integer. Sources Financial analysis An analysis of vendors financial performance, taken from annual and quarterly reports, investor presentations, as well as a variety of secondary sources Customer survey A survey of over 60 contact center supervisors, IT managers, and CIOs. Technology analysis An assessment of vendors technology capabilities. Ovum does not endorse companies or their products. Ovum operates under an Independence Charter. For full details please see For full details of Ovum's citation policy, see Whilst every care is taken to ensure the accuracy of the information contained in this material, the facts, estimates and opinions stated are based on information and sources which, while we believe them to be reliable, are not guaranteed. In particular, it should not be relied upon as the sole source of reference in relation to the subject matter. No liability can be accepted by Ovum Europe Limited, its directors or employees for any loss occasioned to any person or entity acting or failing to act as a result of anything contained in or omitted from the content of this material, or our conclusions as stated. The findings are Ovum's current opinions; they are subject to change without notice. Ovum has no obligation to update or amend the research or to let anyone know if our opinions change materially.

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