Customer Experience Report’s Loren Moss attended this year’s Calabrio’s Customer Connect 2015 conference in Calabrio’s headquarter city of Minneapolis, Minnesota. While there, he had the chance to sit down with Calabrio’s CEO and get a better understanding of Calabrio’s unique history, their markedly different go-to-market philosophy compared to some of their rivals, and the company’s vision and roadmap for the ever more crowded and competitive analytics and contact center WFO space.
Last but not least, Calabrio’s CEO Thomas Goodmanson (pictured above) explains why Minneapolis is an ideal location for a high tech software firm like the one he runs.
Customer Experience Report: Why don’t you start by telling me the Calabrio story and how the company came to be?
Thomas Goodmanson: Spanlink was a company from, I think—1995 was when they were founded, and they very quickly got measured up with Cisco. They were public at one point, then got sold to Cisco and were spun back out, so they have been all over the map. But in that time, the very first thing they developed was the Cisco Agent desktop. That is actually is an original Calabrio product. I’m going to talk about it a little bit in the spin out, but back in 1999 we held a patent for CTI (Computer–Telephony Integration) that was second to none in the world, and was the basis for Cisco Agent Desktop and Cisco Supervisor Desktop. In about 2003, Cisco came to Spanlink and said: “Hey guys! why don’t we record calls in Cisco Agent Desktop.”
I don’t know if you remember that as well, there was a point in time that you could—you still can, up to 5 seats, record calls just with the Agent Desktop. But, Spanlink, having bigger ideas, said “well, we’ll take the same technology and sell it to our own customers.”
In 2006, you had NICE and Verint coming out and defining workforce optimization when Gartner bought into it, when Jim Davies bought into it, it turned into: if you have QM (Quality Management) and WFM (Workforce Management) you can be qualified as a WFO (Workforce Optimization) vendor. They found this company in Montreal, Canada that was called Calabrio. They bought that Workforce Management and started selling the two of them. And at that point, France Telecom was a customer with fifteen thousand agents, so they had done very well, but were on a downward trajectory because they weren’t investing in the product.
So when it came into Spanlink and they stared nurturing it, the number one thing they ran up against constantly…there are two things that happen. One is that if you’re familiar with service companies, you can’t ever have a product out of them. Service companies don’t make good software companies, software companies don’t make good service companies in general. It’s just hard because you have competing interests; how you make your money is competing.
The vision came in 2013 so the last two years have been: how do I get to record more desktop because I want to see the chat and everything? How do I see the keystrokes because I want to know what’s happening with the agent? I want to be able to recreate what’s going on.
So the board wisely said we´ve got these assets, let’s make sure that we take care of them the way they should be taken care of. Let’s bring a professional team with software people in and drive that piece and let’s leave this family to continue to grow as an ATP. So that was early 2007; late 2007, November was when we spun out. They had been talking to me back in July and asking if they did this would I be interested in coming in. So I joined them the first of January in 2008, and we have been on this ride ever since.
Customer Experience Report: How big were they then?
Thomas Goodmanson: It was very small, the WFO side was minimal. What existed was we took out also Cisco Agent Desktop, so we had that revenue, which was significant, to fund to the other piece, and then if you look at Cisco the WFO product, the OEM, its actually Calabrio’s, so we had this OEM revenue stream and then we had the nascent new Calabrio revenue that was coming up and so we just stared building on that.
A challenge we faced in 2009, Cisco decided that they were going to write Finesse and that was the end of Cisco Agent Desktop as far as developing and getting royalties. What we did at that point was to say: Alright are we going to double down? The good news is that our CTI patent was at the heart of what they wanted to do for Finesse so I negotiated a five year contract to help them with Finesse so what you see today is a lot of my developer time that went into that, and the money that we got from that, we reinvested, we doubled down into the WFO project.
The important part is that when we went on this journey, the QM was still client/server, WFM was in HTTP, but not as elegant, so we rewrote the whole thing, rewrote the entire code base in Web 2.0. And the second thing I did was build the widgets in order to have that personalized piece. We went on that journey in exactly that order. First was web 2.0, second was personalization, and then finally, when you see the SMART, we have been in speech analytics forever. We have had that in our products for a long time, just not as elegant as it is today .
Customer Experience Report: Tell me about the typical size, you mentioned that you have big customers, you obviously have the scalability to service very large customers, but what is your average customer size? I mean I’ve seen FedEx here at the event, there is U-Haul, but then the company that was up on stage I think they only have 115 employees total, so you seem to be able to service companies that are smaller, as well as those that scale up. That seems to be a different approach because NICE for example, is not interested in small companies. You know they are not going to talk to a 500 seat call center.
So you guys seem to have a different market position and it doesn’t seem like you are trying to scale down capabilities, but you’re making yourself more accessible to a broad range of customers. What is your strategy, and how is that reflected in your product line?
Thomas Goodmanson: It’s really interesting. Yesterday you heard me talk about the democratization of companies because of the Internet. Because everything is compressing so early on, we had the great joy and ability to start from the ground up, starting with the Web 2.0 framework. You look at NICE and Verint, they still ship a lot of their own hardware; we have no hardware requirements. You work on whatever servers you buy, whatever server farm, we work with you on that, but at the end of the day, it’s about the touch. So we´ve got this light software touch that goes into whatever servers you have.
The big investment is actually your storage, if you’re recording screen shots and voice, but what that allows us to do is to scale down to—I have five seat contact centers (as customers). My biggest (customer) is 30,000 seats, and it’s the same exact code base; I was adamant that this thing is going to scale from bottom to top. And the good news going back to the democratization, is as we write software that’s for that thirty thousand seat, they are more sophisticated and the five seat gets to use the same stuff, as much or as little of it as they want, because we keep it in a single code base. And so we like to think it is useful all the way across. We listen to all of our customers because they all have great ideas and we drive that development, and the other thing that is loud, is the speed at which we develop software, it’s second to none. When customers need things we can hack our road map like that (snaps fingers), and drive change because maybe I just heard it for the fifth time and I just have got to get it done. I will come back from a meeting; they hate me coming back from being on the road, because it’s: “hey let´s do this, we’ve got to do this,” and these guys react like that (snaps again).
Customer Experience Report: Omnichannel is something ever more present, and you are recording what the agent is doing on the screen, there is recording the call, but as call volume still continues to grow, other channels are growing more quickly. What is in your road map and what are your plans to capture these omnichannel interactions: What are you doing already, and where do you feel that you need to be for those non voice channels? Even SMS has been supplanted to a large degree by Whatsapp.
Thomas Goodmanson: Today we do capture everything, we put a kernel in, we see every keystroke that the agent makes from the time they get in to the time they go home. We will record the screen—in digital format—if (the customer) would like it, quite frankly the keystroke recording captures the essential data. And so we are able to tell you what’s in focus for them at all times without a screen recording. And what we´ve done with that, we keep our analytics package very simple. Whatever we have in analytics, it’s part of analytics. We don’t sell desktop analytics, speech analytics, text analytics, it is all in one because the more pieces you bring together, the more robust the experience.
And so what the package would do is, let say we have an agent behavior that’s going on and we see they were on Twitter when they should have been talking to the customer so it’s an allowed behavior, so you can set these parameters, so as you do the demo say: “set a parameter there, do this,” so you are able to see that just because Facebook isn’t allowed—for the millennials we can set it to be when during work time there is no Facebook, rest time Facebook is allowed, and so it doesn’t show up as a red flag against you. So we are doing all that, and we are tying it all together, and one of the things that I think you’ll like as well, is we came up with a proprietary player that you have probably seen, and it’s got the dual channels so you see who is talking, and when; you see the silence. I love visual things. I want to be able to visualize; my entire team and I come from analytics backgrounds. We don’t come from the telecom area, we come from analytics. Hyperion, Cognos, companies like that, so what my idea was when we were building it was, I always wanted to be like a Hyperion: I want to be two clicks from the answer.
In my analytics product if I see something that I don’t like: I have five regions and if the Vegas region is performing poorly, I double click and it blows up Las Vegas and I can see that there is a bunch of poor desktop performance, people doing things they are not supposed to be, they are saying things they are not supposed to be, so whatever the analytics picked up, the problem, you double click on that, and you go to the list of agents in some format and you can set all these things. This is all personalized, so you double click on that and you start to see: okay, it’s one guy on second shift. You double click on that and you get all his calls. You double click on that, they start playing, fully speech indexed, so green markers along with things that show you exactly where it happened. You pull up a panel, you see exactly what apps they were in. You double click on that in that panel you see exactly what URL they were at.
We do about 25% of our revenue overseas. I see that going up to 35% probably in the next 12 months. We´ve got a sales office in London, a sales office in Singapore, and I’ve got a relationship with PCS, a very good distributor in Sao Paulo. I tell you what, they are just wonderful to work with, good people, but really super smart and really super connected.
So you can keep digging down and it’s my favorite visual. The way I look—so you dated yourself to selling back in the 90s so you remember the 2190 reports right? Remember in the accounting department they all had them, and when managers wanted something, and this is the analogy I use, you go to the half wall. Remember that room? That everybody, had, that you went to IT and they had a half door with a ledge and you explained what you wanted.
Customer Experience Report: Oh good Lord! I just had a vision of green bar paper!
Thomas Goodmanson: Exactly, that’s what I am talking about! And a week later they plopped the green bar on your desk and they kept plopping it on your desk every month until you said: ¨No más,¨ right? Because they didn’t know when to stop. So then Hyperion and Cognos came out and you were able to do that, and the managers at their desktops were then playing with budgets, spinning things, dropping in it to Excel.
Customer Experience Report: Going from data to knowledge.
Thomas Goodmanson: You got it. And so what we’ve done, we are democratizing that too. Visually the managers and everybody: this is all accessible, you don’t have to go and make a request, this stuff is just sitting there ready for you consume in a visual way; because as managers, we’re deluged.
So what we’re doing is taking those petaflops of information and boiling them down to a work log, boiling it down to a bar graph, boiling it down to whatever it is and being able to drill.
That’s the current product. Where we are going? Anything that comes through there can be analyzed. So speech analytics, we just have turned the engine at: if it is an email exchange, if it is a chat exchange, we turn that engine on there and its sits in the player. So rather than a voice call going, when I drill down I see, with highlights on the words, in the same player, the email; the exchange. So I am able to review very rapidly through my clicking down. And so we do that against all channels.
One thing I´d like be more robust about, and we will figure out a way, is the social side. I think we can do it , but it’s a little bit of manual intervention with a third party to be able to bring that data, what’s being said about me socially, and bring it back into the contact center to see if it matches what’s going on.
Customer Experience Report: I heard one of your customers say, and they are a big cheerleader of you, “if they just bought an ACD company, then they would be a complete package, and maybe your strategy is: Let’s not go in and compete with the people that we want to connect to, or maybe that is a long term strategy. And I understand that you wouldn’t want to talk about it if it was, but where do you want to go, or what are willing to talk about as far as how the company would be different? How will the company be different two or three years from now than it is today?
Thomas Goodmanson: You know I talked about it yesterday; it’s to continue that journey to 2020. There are some pretty good predictions out there and over the last thirty years, forty years, technology predictions have been pretty solid when you look at particularly business to business, business to consumer type technologies, we can see them coming and so making sure that we are in a place that we don’t ever leave our customers high and dry. So we continue to move towards that Internet of Things. We need to be able to take machine data, we need to be able to say my refrigerator is calling, my house is calling, these connected homes—I’ve got a fairly connected home; the only thing I don’t do, because I don’t have a firewall I’m comfortable with, is push the data back out to the vendors.
When we can do that, we have to be ready for it, and so when we think about road maps, we are constantly evaluating where we are in that continuum. We started that in 2013, the vision came in 2013 so the last two years have been: how do I get to record more desktop because I want to see the chat and everything? How do I see the keystrokes because I want to know what’s happening with the agent? I want to be able to recreate what’s going on.
So we’ll continue to do that, I’ve been to five or six analytics companies here in the last six months that would be very interesting—we will do a make versus buy (analysis) on everything we have ever built and we will go out see if we are best of breed, and can we drop them in and drive, or can we just go build it, and we will continue to make those calls as we go.
Customer Experience Report: Your growth has been mostly organic. As far as your geographic footprint, how big is your presence outside of the USA and Canada?
Thomas Goodmanson: So we do about 25% of our revenue overseas. I see that going up to 35% probably in the next 12 months. We´ve got a sales office in London, a sales office in Singapore, and I’ve got a relationship with PCS, a very good distributor in Sao Paulo. I tell you what, they are just wonderful to work with, good people, but really super smart and really super connected.
Customer Experience Report: And that is a huge market.
Thomas Goodmanson: You wrote about it right? I was there for the first time six months ago setting up, I was signing the deal I was at PCS the day I showed up and they had a customer using the software within two weeks because of the relationship, and they liked what we had. I love that call center market. It’s real time, it’s where it’s going.
Customer Experience Report: Speaking of locations, why Minneapolis? Because the company before was in Canada right, in Quebec?
Thomas Goodmanson: The education, particularly in the technology side, the level of education, this is one of the most educated cities in the United States.
Customer Experience Report: The (University of Minnesota Golden) Gophers are across the way, right?
Thomas Goodmanson: Absolutely, my son is in the computer science program as we speak. So we have a constant ability to recruit, we´ve got amazing Fortune 500 companies here. So they get trained there and I go steal them! So we´ve got some of the best developers. I have (locally) Target, Best Buy, Medtronic, UHG,
Customer Experience Report: US Bank is up here too, right?
Thomas Goodmanson: US Bank, Wells Fargo, the list goes on and on. Cargill—the largest private company in the world, and so I have this great talent pool that’s sitting here.
That being said we are really active on the coast. I have tons of sales guys sitting on the coast, my SVP of Sales is a Silicon Valley guy. I spent a ton of time there, I used to live there at one point in my life and so I think it’s important to have presence and as we grow, we will absolutely look to other places to have talent. I’ve done Indian offshoring, I have done all of that to get to this point, but right now I’ve been able to—we have been able to put together a nice company here and grow It quite rapidly.
Customer Experience Report: Great, you know it’s very impressive.
Thomas Goodmanson: Thank you.