Wrapping up my “newsmaker” interview series is a discussion with Jeffrey Henning, CMO of Affinnova. Jeffrey made news a while back when he left Vovici for Affinnova, and then again when it was announced that Text Analytics firm Verint had acquired EFM provider Vovici, the company that he had helped lead for so many years. Enterprise Feedback Management is a great example of the convergence of the market research and business intelligence industries so it’s a topic that I and other industry observers follow closely; the recent wave of consolidation in that space is indicative of what we may see happening in other segments in the future. Since Jeffrey is arguably one of the most respected thought leaders in the industry on EFM, I feel pretty lucky that I had a chance to talk with him in-depth about it.
Prior to joining Affinnova, Jeffrey spent the past 17 years with Vovici (Perseus), where he pioneered the enterprise feedback management market and launched the Voice of Vovici blog, which many (myself included) have called the most valuable blog in research. Jeffrey led the transition of Vovici from a research services company to a technology company. Prior to that, he was an industry analyst with BIS Strategic Decisions, after starting his career as a market researcher focused on new product development. He is also the creator of the #mrx research community hashtag on Twitter and a regular contributor here on GreenBook with his bi-weekly synopsis of the most popular topics posted on Twitter. Finally, he is a personal inspiration; I’ve always envied his blogging skills and hope to be half as good as he is one day!
You can credit Jeffrey Henning with the “interview trilogy” idea that he’s the final installment of; he posted a fun piece earlier this week on which movies in trilogies are the best. I think each of the interviews in this series are great, but as Roxie Strohmenger suggested on Twitter earlier, perhaps we can do an analysis to see what you, the faithful reader, thinks!
This interview was conducted via email earlier this week. Enjoy!
LFM: Thanks for agreeing to the interview Jeffrey! Since you’re one of the earliest pioneers in EFM, I couldn’t help but wonder what your take is on the recent M&A activity in the Enterprise Feedback Management space. So let’s start there. Can you tell us a bit about the history of EFM and some of the trends that have emerged in the space recently?
JAH: DIY web surveys started to become a victim of their own success by 2003. At Perseus Development, we saw a familiar pattern with ourclients: sky high response rates (50+%) for their first online surveys, declining rapidly as they surveyed their customers again and again. Worse, as people outside the marketing department started writing questionnaires, you’d often see surveys with leading questions, incomplete choice lists, skewed scales and other problems. All of a sudden you had businesses making decisions from bad surveys with small response rates, thinking they were being customer driven.
Esteban Kolsky, then at Gartner, had been talking about what he called CFS (Customer Feedback Systems), providing companies’ central panels that they could manage to prevent over surveying. We had reached the same conclusion independently and became a Gartner customer to consult with him. From our conversations, we thought it was equally important to bring that same central management and oversight to all survey research: whether of customers, employees, resellers or any key constituency. We needed a name for this broad vision, and I led a series of ideation exercises that produced 46 potential acronyms (which I’ve listed at http://blog.vovici.com/blog/bid/17845/Father-of-EFM). We settled on EFM, Enterprise Feedback Management, which was my father’s suggestion. Esteban ran with EFM and championed it to his customers and over the next 4 years another 13 firms adopted the term.
I believe 70 different companies call themselves “enterprise feedback management” vendors today and that profusion has led to the merger activity that we are seeing. In many ways, “enterprise feedback management” was always an aspirational term – the majority of those early implementations would have been more accurately described as “departmental survey management”. It was always important to get beyond the survey and embrace other types of feedback, whether Vovici with its DIY MROC, Globalpark with its Facebook connector or MarketTools with its social media manager: you are going to see EFM systems embrace many different types of feedback.
LFM: Verint/Vovici and QuestBack/GlobalPark are the most recent examples of consolidation in EFM and Forrester believes this signals a movement to the fabled integrated, 360 view VOC platform. What is your take? What do these movements indicate to you about the next phase of development in the market?
JAH: It’s funny to me that when I go to market research conferences they talk about the need to move beyond the survey and incorporate BI (Business Intelligence), and that when I go to BI and CRM (Customer Relationship Management) conferences they talk about the need to incorporate surveys! I’ve heard the BI folks say, “We know what they did but we don’t know why they did it.” So Forrester is right on, but this is a tediously challenging task.
Version 1 EFM systems required respondents to complete panelist profiles. Then everyone added CRM integration, so that you could incorporate much that you already know about customers into surveys: drawing sample based on product purchases and transactional activity, adding survey branches based on hidden information, and so forth. Today most of this integration is still pretty shallow – take a panelist profile and populate it from the CRM; typically it includes only a small amount of the data the organization knows about its customers. Future EFM systems need to deepen the CRM integration and then they need to embrace information outside the organization: consumer databases, social media activity, and so forth. LinkedIn, Facebook and Google+ all want your real identity so that they can sell information about you to interested companies. If a customer likes you on Facebook, you’ll be able to capture a tremendous amount of demographic information about them to inform your customer insights.
LFM: I didn’t know that you truly were the “Father of EFM”; you must be proud that your baby is growing up! It seems as if this model of multi-source data integration has moved beyond EFM into the broader Business Intelligence market, with the emergence of “social CRM” and “business analytics” as spaces that are moving down the same path. The biggest example to my mind comes from Salesforce and their push to be an insight engine via integrating Radian 6. Is the next step to see EFM absorbed into the broader BI space and consolidation there, such as a Salesforce/Confirmit deal?
JAH: What’s that saying, “Success has many fathers, while failure is an orphan”? EFM had many fathers: my business partner, Rich Nadler, now with BlazingFeedback, helped conceptualize it; my father helped name it; Esteban helped popularize it.
Salesforce/Confirmit?! Do you know something I don’t, Lenny?! I was always afraid that EFM would be completely subsumed into CRM, and I think the “social CRM” movement makes that collision inescapable. EFM will become “social EFM” and then be absorbed into social CRM systems.
LFM: LOL, I don’t know anything special about a Salesforce/Confirmit deal, just playing amateur prognosticator. That said, it wouldn’t surprise me! So now it’s your turn; if you had to make a prediction about future consolidation within the broad BI/EFM/MR spaces, what would you say? Who might be next and why?
JAH: There are different types of mergers – strategic, operational and tactical being one way to look at them. Text analytics is becoming a strategic necessity for BI, EFM and MR firms: I expect to see at least two more text analytics vendors acquired by the end of next year. Operational mergers will be about adding geographic coverage, with the larger companies acquiring firms that fill the gap for them in one or two regions. Social media monitoring has more vendors than the space will support; I expect some tactical acquisitions of such companies because they can be purchased so inexpensively, with the acquirers adding that technology to their existing product suites.
LFM: The missing element in this movement seems to be an analytical platform that allows for massive correlation analysis between CRM, Survey, Social, and other data. I would assume something that is focused on marketing mix modeling or predictive analytics would be the missing piece that would drive ROI on these systems. What do you think? What is needed for EFM to really come into its own?
JAH: I think my friends at IBM would argue that they’ve already achieved this with SPSS marrying EFM and predictive analytics. Whether they have or not I don’t know. The problem with implementing an EFM “Theory of Everything” is that you have to involve everyone – it becomes a complex enterprise implementation. At Vovici we always talked about different stages of EFM adoption: developing good analytic models is something that happens after years of prior work on survey centralization, data integration and social feedback collection. It’s a long journey, for both vendors and enterprises, to get there.
LFM: You made a pretty big shift going from Vovici, which arguably was focused on the back-end of the brand/consumer relationship, to Affinnova, which fits more into the front-end of the consumer lifecycle. Why did you decide to make that leap? Do you see an opportunity for innovation optimization to eventually be incorporated into an EFM framework as well?
JAH: Is EFM the alien Borg from Star Trek that will assimilate everything?! Certainly a couple of EFM systems today incorporate communities with ideation tools, and it’s logical to do concept testing with your community panels. But NPD work is typically done on a project basis with outside vendors, using sophisticated quantitative research techniques or proprietary cross-brand databases; I don’t imagine it will be a major component of EFM in the next five years.
Perseus – now Vovici – turns 18 next week on the night of the Perseids meteor shower. Earlier this year I suddenly realized that I’d spent a lifetime – the lifetime of my twins, as it happens, since they’ve just turned 18 – focused on customer satisfaction. We understand customer satisfaction, loyalty and experience so much better than we did two decades ago. It’s well-explored territory.
To go back to Star Trek, I was ready to explore a new frontier. Systematizing innovation is something that we still don’t understand well. We idealize the Thomas Edisons and the Steven Jobs of the world when both understood better than their contemporaries that innovation is about process not inspiration. Clearly the world needs innovation now more than ever, and Affinnova’s mission is to accelerate the pace of innovation for the prosperity of our clients, their customers and the world. It’s exciting, challenging and meaningful. What more could you ask for?
LFM: Since you’re a Star Trek fan, let’s end on a lighter note that ties that in. The Star Trek universe is arguably one of the most optimistic visions of the future out there in the pop culture lexicon. Since you’re so deeply involved in innovation work now and are entrenched in technology, how do you think market research can be used to help propel us at “warp speed” into a brighter future?
JAH: Well, unfortunately – unlike Star Trek – market research can’t violate the laws of physics for narrative purposes!
But storytelling can be more important than fact, and there’s an important lesson there for us. Market researchers need to be narrators, telling stories about customers that resonate with business executives and R&D. I remember being part of product discussions in the late 1980s and early 1990s for Personal Digital Assistants (PDAs) where people would reference communicators and tricorders from Star Trek. Unfortunately, where one client did a particularly poor job following through was on using consumer insights to paint a vision of the unmet needs that PDAs would address. If we want to inspire futures that seem like science fiction, we need to do a better job of presenting and narrating the unmet needs of our clients’ current and prospective customers.
Lenny, did you ever see the Discovery special “How William Shatner Changed the World”? Here’s hoping they someday film “How Market Research Changed the World”!
LFM: I missed that, but it sounds like a fun show! And if they ever do a show on market research like that, I’m betting that you’ll be included in it! Thanks for the time and fun interview Jeffrey.