3 Winners From A Resurrected Form Of Marketing
A barrage of telephone calls, from everyone from my credit card company to the local auto dealer, annoyed me over the last week. Remembering back when telemarketing was ubiquitous, I decided to look closer at this resurrected form of marketing — customer contact.
We Have All Experienced It
You’ve just finished a long day a work and are relaxing around the dinner table with your family. Suddenly, your phone rings and the caller ID shows a number that looks oddly familiar. Reluctant but inquisitive, you take the call. The voice on the other end is pleasant and sounds curiously friendly, asking you non-intrusive questions about your credit card account. However, your intuition tells you that something is not right about this caller.
#-ad_banner-#In this case, your intuition is correct. The “person” you were just speaking to isn’t a person at all. It is the latest iteration of artificial intelligence-powered voice recognition and response software. You answered the phone since the number looked familiar, this is not random chance — the number was spoofed to look one you would recognize to increase the likelihood that you would answer the phone.
We are in the midst of a revolution in the call center business. What was once a room full of low-level employees dialing from lists has morphed into a high-tech, multi-billion dollar enterprise of predictive dialers, artificial intelligence, cloud computing and highly trained employees.
My research led me to discover the leading names in the field. The first name surprised me…
1. Amazon ( Nasdaq: AMZN)
This genre-defining behemoth of retailing has moved its technological and experience advantages into the customer contact computing industry. Over the next two years, Amazon is poised to become the overwhelming leader in this burgeoning industry. Rather than simply selling its own products, Amazon has started to offer its technological edge to other companies by assisting with customer management.
This pivot in focus will revolutionize the call center model and is a tremendous, cutting-edge opportunity for investors.
While most companies would keep their customer relationship technology proprietary, Amazon is taking a different path by opening up theirs to the marketplace. Its system, Amazon Connect, it is a self-service, cloud-based contact center service that makes it easy for any business to deliver better customer service at lower cost.
The technology is based on the same contact center software used by Amazon customer service associates around the world to power millions of customer conversations. Setting up a cloud-based contact center with Amazon Connect is as easy as a few clicks in the AWS Management Console, and agents can begin taking calls within minutes.
There are no up-front payments or long-term commitments and no infrastructure to manage with Amazon Connect. Customers pay by the minute for Amazon Connect usage plus any associated telephony services.
Tom Weiland, VP of worldwide customer service at Amazon, commented, “Ten years ago, we made the decision to build our customer contact center technology from scratch because legacy solutions did not provide the scale, cost structure, and features we needed to deliver excellent customer service for our customers around the world. This choice has been a differentiator for us, as it is used today by our agents around the world in the millions of interactions they have with our customers. We are excited to offer this technology to customers as an AWS service – with all of the simplicity, flexibility, reliability, and cost-effectivenesses of the cloud.”
The per-use payment plan will open up this opportunity to millions of potential clients and could bring yet another area of immense success to Amazon’s business.
2. Zendesk (NYSE: ZEN)
Zendesk is among the first to embrace Amazon’s AWS Management Console.
Boasting a $2.7 billion market cap, ZEN offers software for improved customer relationships. It empowers organizations to advance customer engagement and better understand their customers. More than 94,000 paid customer accounts in over 150 countries and territories use Zendesk products. Based in San Francisco, Zendesk has operations in the United States, Europe, Asia, Australia, and South America.
The company boasts 35 CTI integrations and has 10 years of experience in web-based customer service applications. Zen expects great things as it brings its deep contact center expertise to the Amazon Connect collaboration. As a result, businesses using Amazon Connect and Zendesk will be well-equipped to deliver support experiences that are tailored to the customer, and change dynamically based on their past and current interactions. The ability to customize each customer contact combined with the company’s entrenchment in the marketplace will supercharge its growth.
“The seamless integration of Zendesk Support with Amazon Connect is designed to create a unified agent experience which can increase agent efficiency and customer satisfaction,” said Pasquale DeMaio, principal product manager, Amazon Connect.
The company is well on its way to reaching its billion-dollar revenue goal by 2020. 2016 wrapped up with revenue of $312 million and 2017 is projected to climb to $415 to $425 million. Zen has created continual GAAP and non-GAAP operating margin improvement each year and expects this to continue into 2017. The company forecasts net positive cash flow this year.
3. Twilio (NYSE: TWLO)
This $2.5 billion market cap cloud communication platform was just named to JP Morgan Securities “highest growth” tech stock list. Its shares were upgraded to overweight by the venerable Wall Street powerhouse.
Twilio’s core revenue has exploded by a minimum of 70% for each of the last 12 quarters, creating an incredibly exciting growth trajectory for investors.
The messaging startup went public last June and boasts such genre-defining clients as Uber, Airbnb, Facebook, and WhatsApp.
Amazon’s AWS was first seen as a competitor to Twilio, but it now appears that they will be partners. As Amazon’s AWS expands, Twilio is expected to continue to work with Amazon.
Mark Murphy, a JP Morgan analyst stated, “Amazon, which invested in Twilio, has now used Twilio to power a succession of new AWS products; we do not think the same can be said of any Twilio competitor.“
Risks To Consider: Investing in high-tech comes with the inherent risk of the company being made irrelevant by innovation. Innovation and change are part and parcel of the high-tech world. Diversification is the key to mitigating this risk.
Action to Take: All of the above stocks have tremendous potential. However, my favorite stock of the above is Twilio. A secondary offering resulted in share price plunging over 55% in 2016 after hitting a high near $71.00. The current price of $28.40 per share sets up a great buying opportunity.
Editor’s Note: In the last few years they’ve seen gains of 296%… 545%… even as much as 696%! But a single new technology is poised to make 2017 their biggest year yet… Full story…