Companies that are able to increase their customer retention by 5% to 10%, says John Luongo, chief executive of Vantive Corporation, can double their profits. Such facts, increasingly backed up by independent research, have become a key part of the sales line for Vantive, now tentatively established as the leader in the field of customer […]
Companies that are able to increase their customer retention by 5% to 10%, says John Luongo, chief executive of Vantive Corporation, can double their profits. Such facts, increasingly backed up by independent research, have become a key part of the sales line for Vantive, now tentatively established as the leader in the field of customer asset management systems. Vantive’s Enterprise product is one of a group of broadly similar customer-oriented systems from a group of young companies which have floated on Nasdaq over the past three years – Scopus, Clarify, Siebel, Aurum (now owned by Baan) and Vantive. Vantive, Scopus and Clarify have sometimes been miscast as just help desk software suppliers, but their scope is far greater, says Luongo. For example, Vantive’s products are used by General Motors for after sales support, and by Heizer in California to support medical patients. The goal, says Luongo, is to enable you to treat the customer in an integrated way … to re-humanize the business. Vantive’s technology consists of software to deliver timely and relevant product, service and customer information to the point of contact with the customer. Often, this means to telephone support staff, but increasingly, it can mean field staff, or even invisibly, to an automated system such as a web server which is handling a customers enquiry.
Vying for leadership
Usually, the transaction is dealt with as part of a workflow system, so that follow-on actions can be scheduled. Vantive claims at least 100 customers use the system as part of a web-based support or trading package. According to market analyst the Aberdeen Group, Vantive is the best positioned in the group of young companies vying for leadership in what is a fast growing market. Sales of customer asset management software are set to grow from $1.5bn to $4bn over the next three years, it says and concludes that Vantive’s product line is broader and that the company has more significant alliances with systems integrators. Vantive’s strong position is reflected in its revenue growth: $39m in 1995, $64m in 1996, and a forecast of $110m in 1997. In its latest second quarter, it reported revenues up 71% last year to $26m. Against this, rivals revenues were far smaller: Scopus revenues in 1996 were $45.7m, Clarify’s were $56.3m and Siebels were $39.2m. The biggest threat to Vantive may yet come not from its most obvious immediate rivals, but from the big back-end software suppliers such as SAP, Baan and Oracle. These are all extending their franchises into front desk software. Luongo says: The question for us is: Will we in the front office space be able to establish an independent market [from back-end suites] and maintain our position? He believes that the increasing openness and componentization of the big application suites will make it easier for companies such as his to live alongside the giants such as SAP. However, further acquisitions in this field are likely, although the strong performance of the leading front-office suppliers means companies such as Vantive can negotiate any market consolidation from a position of strength.