Editor’s note: The cloud-based Social Dynamx platform helps companies with tens of thousands of daily customer communications in Twitter, Facebook and other social media platforms prioritize, triage and take action. In this interview chairman and CEO Mike Betzer, who has a deep background in CRM at MCI, Siebel, Oracle and Convergys, discusses the crowded space of social marketing platforms and the Social Dynamx journey to market.
SandHill.com: Since you describe your solution as helping companies that have tens of thousands of daily customer communications, please describe your target market.
Mike Betzer: Our initial market is customer service agents and call centers for large enterprises. Traditionally, customer service agents have handled customer care through 800 numbers, but with the explosion of the social web today, customers are going to the web and social media channels to broadcast complaints before picking up the phone. Once they do call, they are very frustrated.
The enterprise is looking at the bottom line: keeping customers happy and growing margins. Fortune 500 companies such as Dell, Citi and Sprint are spending almost $2 billion dollars each on customer call centers alone and others like AT&T are spending closer to $3.7 billion dollars.
Social Dynamix can save an enterprise 40 percent, taking the price per interaction from $10 – $35 for the traditional phone service to $1.50 – $3 when enabling agents to respond to customer inquiries efficiently through the social web. Cost-savings is an outgrowth of social customer support, but it’s not what drives the purchase decision.
SandHill.com: What drives the decision, and how did your company originate?
Mike Betzer: Nearly half of the U.S. population is on Facebook, and just 17 percent of companies polled have a formal process for responding to customer complaints on the social network, despite two-thirds having a presence. That’s like ignoring a ringing phone or letting an email go unanswered.
I experienced it working at large contact center and CRM vendors like Siebel, Oracle and Convergys. Literally, one day we woke up and thought, the rules have changed for customer service. What worked the last 20 years will not suffice for the next 20 … or even two years.
Jan Ryan (co-founder and president) and I each sold our respective companies in the mid-2000s to Oracle and were ready to try something that married customer service, Software-as-a-Service (SaaS) and social media channels for large organizations. We founded Social Dynamx in January 2011 and the product became generally available in April 2012.
SandHill.com: How does it work? And is it easy to implement?
Mike Betzer: Customer care and call centers implement the Social Dynamx platform, through cloud delivery, to work in conjunction with their existing CRM and social media listening services. Social Dynamx automatically prioritizes and matches agents with social media posts and user-generated content (UGC) to solve customer issues and transform potential detractors into brand advocates. It facilitates one-on-one conversations and instantaneous support solutions.
SandHill.com: What challenges have you encountered that you didn’t anticipate?
Mike Betzer: Everyone is social. Or at least they claim they are. It’s a crowded space especially when you focus on social marketing platforms. We had to define ourselves quickly and differentiate like crazy. And we continue to do this every day.
SandHill.com: Please describe one of your company’s lessons learned and where it occurred in the time line of your product development.
Mike Betzer: As we began rolling out the product to our lighthouse customers, we quickly realized that many large enterprises have not ventured down a social customer service strategy before. So just adding a new technology wasn’t going to cut it. They were ready (and desperate) to embrace the new technology but didn’t have the experience internally to fully realize the value. We beefed up our customer success team and domain experts across several industries to ensure their success. In the end it was helpful to really become ingrained in our customers’ social teams from the very beginning.
SandHill.com: What challenges have you encountered in recruiting the right talent?
Mike Betzer: We are lucky to be in a truly outstanding college town with a highly educated workforce. We’re less than 15 minutes from The University of Texas at Austin. Talent is in abundant supply here. But when recruiting outside of Austin or Silicon Valley, there is a true deficiency of skilled engineers in this country. It’s not a myth.
Each employee at Social Dynamx is here because another employee referred him or her. It really is a family atmosphere that we thrive on.
SandHill.com: Please describe a tradeoff you had to make in your time-to-market race and how you decided what to do.
Mike Betzer: We limited the amount of self-service functionality we gave our customers in the beginning. We’re putting the finishing touches on the full-blown self-service features that will be in our next release. In hindsight, we decided it was best to have less self-service functionality and let us interact more with our early adopters and lighthouse customers. We felt like we became an extension of their social teams, which was invaluable for future product planning.
We decided early on that we would let our customers be our advisors. Before we launched publicly we had five name-brand customers using our product, giving us real time feedback daily and helping to shape our product roadmap. We did not want this product developed in a vacuum.
SandHill.com: How do you decide what software products to use in your business operations?
Mike Betzer: Three words: cloud, speed and scale. If it doesn’t pass those criteria, we likely won’t use it.
SandHill.com: What is the worst advice you ever received? And did you follow it?
Mike Betzer: “Social is just a fad.” Obviously, we chose not to follow that advice. Social-savvy consumers are even willing to pay a premium. A recent American Express study revealed consumers who have used social media for service in the last year are willing to pay a 21 percent premium at companies that provide great service.
SandHill.com: If you could go back and do it all over again, from the time you first began thinking about starting your company, is there anything you do differently the second time around?
Mike Betzer: Differentiate more with our external message. When we entered this market, there was a somewhat crowded marketplace with everyone offering some form of social marketing solution. As that market consolidated and continues to consolidate, more marketing vendors tried (and still try) to lump customer service into marketing functionality. While there’s some overlap, it’s not what the market is telling us it wants. So back to the differentiation message. We would have invested more in product management that specifically looked at the competitive marketplace more than we even did.
SandHill.com: Who is your personal software company or software executive role model?
Mike Betzer: Vincent Cerf. I worked with him at MCI. Lots of people say they invented the Internet. Vince really did. He’s a crazy inventor that wasn’t afraid to be different and push the envelope. There was a better way of working, and he realized that early on when no one else did.
SandHill.com: What do the next 12 months hold for your company?
Mike Betzer: Our first focus is growing our team from 20 to 40 in the next few months to support our customer growth. We’re also focused on closing the next round of funding.
SandHill.com: What is something on your “bucket list” — something that you’ve always wanted to do?
Mike Betzer: In March I completed the Antarctica Marathon, which completed my bucket list of running a marathon on all seven continents.
SandHill.com: What have you found to be the most fulfilling aspect of being a software executive?
Mike Betzer: Without question, it’s the joy of surrounding myself with people of passion. That’s the source of my energy — to change our market with an amazing team. For years before launching Social Dynamx I’d been exploring the right entry point into this market — addressing the pain large enterprises face in managing social interactions.
Two years ago it became clear: Social customer care had to scale across the enterprise, and there were no real tools to do that. The source of that passion united the founding team we still have today and brought us a larger team of highly passionate, culture-driven people. We’re aiming high — to literally transform the way brands interact with their customers. We’re loving every moment of it.
Mike Betzer is chairman and CEO of Social Dynamx and drives corporate and product strategy. He led MCI’s contact centers and technology for 14 years. He started Ineto Services and sold it to Siebel in 2004. Mike then led the new Siebel CRM OnDemand division, becoming the lead for CRM strategy when Oracle acquired Siebel. In 2008 as president at Convergys, he created a new technology division and to lead key acquisitions, including Intervoice. For more information: info@socialdynamx.com.
Kathleen Goolsby is managing editor at SandHill.com.