ITWeb: What is Siebel`s position in this new customer relationship management (CRM) field?
Robinson: Siebel is the global market leader in what people are terming CRM - we call it enterprise relationship management (ERM). We have a suite of enterprise software for sales, marketing, customer service, call centre and a platform for e-commerce.
There is a fundamental shift in the way business invests in technology and the benefit they expect from it. Over the last 10 or 20 years, people invested in software technologies to help them drive down cost, to help them become more efficient and to streamline their businesses.
The fundamental shift is occurring right now - a move from the back office to the front office. People are investing in technology not to drive down cost, but to increase the effectiveness of the way they deal with their customers, to increase profitability. So it's gone from a cost-reduction exercise to a profit-increase initiative.
ITWeb: Were you among the first vendors to recognise the need to shift?
Robinson: The shift was market-led - people recognised the need to get closer to their customers. The idea of one-to-one marketing, mass customisation, relationship marketing, where you are trying to tailor your product to the unique requirement of each and every customer, became important. And to do that, you need to know what your customers` needs, wants and desires are.
So competitive differentiation moved away from product, and people are looking for what the competitive advantage will be over the next 20 years.
The overall view is that the customer and customer loyalty retention will be the most difficult aspect for the competition to emulate. Therefore, what you should invest in are systems that will help you maintain a loyal and profitable customer base.
ITWeb: What is your current position in the market?
Robinson: Siebel is now the dominant player in this trend, this movement in people`s investment in computing, with over 69% market share. We are the fastest growing application software company in history. We shipped our first product in April 1995 and earned $8 million in revenue that year. We closed our books on 1998 at just under $400 million. So we went from $8 million to $400 million in 36 months and that`s based on market demand.
ITWeb: Are enterprise resource planning (ERP) vendors catching up?
Robinson: The growth that Siebel has seen over the past three years has not gone unnoticed by SAP and Oracle. This is a very attractive market for them to try and enter, especially with the ERP market slowing down. So, yes, I think in the next two years we will see traditional ERP vendors bringing viable products to market.
ITWeb: You help people manage sales and customer relationships. How do you apply this expertise to your business?
Robinson: We've got a strategy to try and deliver 100% customer satisfaction. Everybody in the company is paid on a customer satisfaction basis. Every quarter an auditing company called Prognostics audits the satisfaction of every customer. Depending on the results of that survey, our sales people will be paid their commission. We do not pay commission based on the contracted deal; we pay it on keeping the customer happy.
We also have to demonstrate that we are good at selling. The growth that Siebel has achieved demonstrates that we use Siebel software to increase our revenues.
ITWeb: The company culture that you nurture is different from that of many typical software companies - how and why?
Robinson: There's a definite difference in what Siebel is doing. We are very buttoned down, very professional. At Siebel, everybody wears suits - it's almost like the six consultancy companies vs wacky Silicon Valley software companies, where they all turn up in jeans and T-shirts and play table tennis at lunchtime. We are at the opposite end of the scale.
Everything is dedicated to customers and customer success. Every Siebel office around the world has our customers' annual reports and all the meeting rooms are named after our customers.
ITWeb: What are Siebel`s plans for the future?
Robinson: We have always maintained that you need to have a clear, dominant number one position to be successful in the long term in any marketplace in hi-tech. Our view is that the number one vendor always has a 55% to 60% market share, number two is going to have 15% to 20% and the rest are small stuff. So our clear aim is to maintain that global market leadership.
We continue to differentiate and one of the things we are doing is 'verticalising' the business, reorganising ourselves around specific industries such as insurance, telecommunications and pharmaceutical, because sales and marketing processes in these industries are very different.
ITWeb: Where will your toughest competition come from?
Robinson: Within the next three to six months, Siebel application license revenue will exceed Oracle Applications license revenue. It will also exceed Baan's license revenue. We expect to see competition in the next two to three years from Oracle and SAP.
[Sidebar 1]
Useful statistics:
- If you can increase sales by 15% in revenue, you can increase profitability by 60%.
- If you can reduce churn rate (the rate at which your customer base leaves you and starts buying the same product from a competitor) by 5%, you can increase profitability by up to 85%.
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