NETTING IT OUT

2Q2010 was a good quarter for customer service.

Customer growth was about the same in 2Q2010 as it was in the very good 4Q2009 and 1Q2010. Four suppliers delivered improved customer growth.

Financial performance was up significantly for the quarter. No suppliers slipped.

Product activity was very heavy in 2Q2010. Nine of eleven suppliers announced or released new products and/or new product versions.

Company activity was very heavy, too. Seven suppliers announced strategic partnerships and alliances. Three made acquisitions.

We continue to see four key trends in customer service: social media, assisted-service, mobile computing, and cloud computing.

ATG is back in our coverage. While the firm retains its focus and strategy on ecommerce, several of its offerings provide customer service capabilities, some to support ecommerce and others for more general customer service.

We awarded four Customers.com Customer Service Stars for 2Q2010. Attensity Group, IntelliResponse, InQuira, and Salesforce.com earned them for balanced performance across customer growth, products, financial performance, and company activity.

After a good first half of 2010, customer service is positioned for a big finish in 2010.

CUSTOMER SERVICE WAS VERY GOOD IN 2Q2010

2Q2010 was a very good quarter in customer service. Customer growth, both in new business and repeat business was mixed, up for some suppliers, down for a few others, steady for the other. Financial performance was improved, driven by the customer growth and by larger deal sizes and professional services. Product and company activity were both quite heavy, with many significant new products, many new partnerships and alliances, and three acquisitions.

Mixed Customer Growth

Customer growth in 2Q2010 was mixed: up for four suppliers, steady for two, and down for three.

The four suppliers for which customer growth was up are:

• Attensity Group
• InQuira
• IntelliResponse
• Salesforce.com

Attensity Group was especially strong, up a bit in customer acquisition and way up in repeat business. Customer growth stayed steady with the levels of 1Q2010 for KANA and nGenera CIM. Astute Solutions, Consona CRM, and RightNow all slipped in customer growth as compared with last quarter. Note though that customer acquisition was up for Astute Solutions and the number of customers doing additional business with RightNow was up.

Cloud Service Portal Dashboard

© 2010 RightNow Technologies, Inc.

Illustration 1. This illustration is a screen shot of the Cloud Service Portal dashboard.

Note that we cover eleven customer service suppliers and, if you count them, we’ve only reported customer growth for nine of them. We don’t have customer growth numbers for ATG or for eGain. This quarter, after two years, we’re restarting our coverage of ATG. We don’t have any recent history of ATG’s quarterly customer growth. eGain has not yet completed its annual audit and has not released any information about its quarterly performance.

Improved Financial Performance

Mixed customer growth typically yields mixed financial performance. However, professional services revenue and deals sizes are financial performance factors that are independent of customer growth. In fact, despite lower customer growth, financial performance improved in 2Q2010 as compared to 1Q2010 for both Astute Solutions and Consona CRM due to a combination of large deal sizes for repeat customers and professional services revenue. More typically, improved customer growth drove improved financial performance for ATG, Attensity Group, InQuira, IntelliResponse, RightNow, and Salesforce.com. Financial performance was steady as compared with first quarter for KANA and nGenera CIM. No supplier slipped, although, of course, we don’t yet know how eGain performed in the quarter. With improved financial performance by eight of our eleven suppliers, and steady financial performance by two of our suppliers, it was a very good financial quarter in customer service.

High Levels of Product Activity

Product activity was heavy in the quarter. Significant customer service products were announced and/or released in 2Q2010 by nine of our eleven suppliers. Here are the highlights...