EXCLUSIVE INTERVIEW
ATG Marketing Chief Cliff Conneighton: Good CRM Requires Single Focus

When RightNow Technologies (Nasdaq: RNOW) announced plans to acquire Salesnet, executives at Art Technology Group (Nasdaq: ARTG) mulled over how the deal might impact them.

In the first quarter, the company had launched two on-demand customer service applications -- ATG Answers OnDemand and ATG Customer Care OnDemand -- that competed with RightNow. It also had a more robust on-premise offering, thanks to ATG's acquisition of Primus a year ago.

The execs' conclusion? RightNow's move would not stiffen the competition. In fact, they believed Salesnet's inward-focused orientation on sales would distract RightNow from its focus on outward-oriented customer service products.

RightNow CEO Greg Gianforte told CRM Buyer that nothing could be further from the truth. If anything, he said, the Salesnet acquisition will allow RightNow to focus on other product lines now that it has acquired such a deep functionality around sales.

ATG Chief Marketing Officer Cliff Conneighton pointed out that the customer care market is changing so dramatically a vendor can offer inward focused CRM applications or outward focused applications -- but not both.

"They are entirely different businesses," he said in an exclusive interview with CRM Buyer. Following are excerpts from that conversation.

CRM Buyer: How do you see RightNow Technology's acquisition affecting you?

Cliff Conneighton: We thought their move was very interesting. It emphasized the fact that there are two sides to CRM and they are quite different. One side, we would call inward-facing CRM, is what people typically think of CRM -- applications used inside of a company to give them as much information as possible about their customers. Sales force automation is a key piece of that. The other side is what we call customer-facing or customer-centric. That is where our focus is.

CRM Buyer: And what you are saying is that the Salesnet acquisition has pushed RightNow into that (inward-facing) category?

Conneighton: Yes, and this is why: Salesnet has a very complex sales methodology. It is best suited to companies that have long sales cycles, large-sized deals. It wouldn't handle the thousands and thousands of customer interactions that a Best Buy (NYSE: BBY) or a J.Crew or Warner Music or Royal Mail has. Those interactions require you to be able to reach to customers via many channels, like IM, mobile devices or kiosks.

CRM Buyer: Why don't you think a company can handle both approaches well?

Conneighton: It is distracting, especially if you are a mid-sized company. You have to prioritize one approach over the other at some point. RightNow has a broad-based self-service product. Now they have acquired a company that focuses on a different market and business model. It enhances the sales rep's experience -- but not the customer's experience.

CRM Buyer: You launched products in February that compete with RightNow's customer care products. How have they been doing?

Conneighton: In on-demand CRM we are definitely the new kid on the block. We are doing very well, though, and run into RightNow quite often [when competing for deals]. We've landed some marquee accounts like Cingular, Symantec (Nasdaq: SYMC), Coca Cola, and clothing retailer New York and Co.

CRM Buyer: Which do you think will grow faster -- your on-demand or on-premise applications?

Conneighton: We do expect on-demand business to grow more rapidly. We expect it to be a larger share of revenue going forward.