Event-Driven Systems: The Next Wave of Customer Engagement
Emergence has long been a student of customer engagement software. In 2002, we made our very first investment in Salesforce.com, which was the first major system of record in the new cloud computing era. Since then, we’ve led investments in other customer engagement software companies including Salesloft, SteelBrick, and Chorus. Each of the founders we have backed reimagined the world in which companies would be able to engage with their customers, whether it be through conversational intelligence, industry-specific context, or through modern orchestrated workflows.
It's been 20 years since our first investment in a system of record software. And yet, when we look around the room today, we are surprised that the same set of software players from the last generation are still tasked with representing the customer relationship today.
The job to be done around customer engagement is changing
When cloud-based customer relationship management (CRM) software was built in the early 2000s, the only interaction layer between a company and its customers was the sales representative. As such, the specific job to be done was narrowly focused on being a place to record the following: customer names, sales representatives who owned those customer relationships, and subsequent calls between those two parties. We call this “explicit sales data.”
Over the course of the next two decades, the world completely changed. The mainstream adoption of mobile devices enabled mobile websites, e-commerce shopping carts, SMS, chatbots, and many more ways that customers can engage with a company before they are actually ready to buy a product or service. These “events” are typically time-series data and represent the implicit ways in which customers are interacting with a company. Oftentimes, there is not even a human sales rep on the other side of that interaction, but rather a digital surface area.
What’s crazy about this—and where we think the next big opportunity is—is that none of this surface area is being recorded by the traditional systems of record today. Salesforce’s data architecture is designed in such a way that it cannot capture time-series data and tie it to a customer. A sales rep living in Salesforce today has no idea when a potential customer is browsing on their website, evaluating competitive solutions, or looking at a Loom product demo. Customers today want to be reached at the right time on their medium of choice. Companies who fail to adapt are going to be left in the dust.
Our thesis on Event-Driven Systems
In a world where many software systems try to address the question of “What” and “Who”, the Event-Driven System is tasked with answering the question of “When”.
The key ingredient of Event-Driven Systems is software that gathers insight from a stream of longitudinal events, and identifies actions to take based on those event triggers. These events can either be first-party or third-party. These systems are built on the principles that (a) companies should be customer-obsessed and (b) their customers want to be engaged at the right time, with the right context.
“No one has ever wanted to get a spam call. Event-driven systems will finally help brands update their outreach programs from cold calling to timely, relevant conversations that remove friction from the buyer journey. Instead of a one size fits all, “batch and send” cadences that result in low answer rates and few good conversations, this new software will give sales reps superpowers—helping them skyrocket answer rates to over 35% and drive more revenue.”
Co-Founder & CEO of Regal.io
There are already some companies that are paving the way forward, and we think they show some core principles that will set successful Event-Driven Systems apart.
- Answer the "When" question, not the "What." Successful Event-Driven Systems think of data as a story to tell. As with every story there are peaks and troughs, and with every customer there are optimal times to engage with them. Timing is everything.
- Context is queen. People who are using the software should be armed to the teeth with all relevant data points for the customer interaction. This empowers the rep to be the superhero that they were hired to become.
- Drive operational impact. It’s not nearly enough to be another pane of glass that people idly scroll through. A successful Event-Driven System will be able to narrate the story to drive operational changes that are measurable. If you A/B test the software with half of the team using the product and half not, there should be noticeable delta in customer acquisition and retention.
Event-Driven Systems applied: Regal.io
Regal.io has built an event-driven customer engagement platform that enables brands’ sales teams to communicate with their customers through branded calls and SMS. For instance, an online B2C healthcare brand might use Regal.io to trigger a branded call when a customer has performed a key series of high intent actions (such as adding items to a cart) but not completing the purchase process. Sales reps love Regal’s solution because it directs their attention to high-intent customers who have completed parts of the customer journey but just need some human touch.
Customers also appreciate receiving a call from the company with a rep who already is up to speed on what recent actions the customer took so they can finish signing up when the self-serve flow fails.
We’ve also seen companies successfully integrate real-time third-party data with existing sales systems to add data-rich context. Total Expert is a purpose-built CRM focused on financial institutions. They are able to aggregate third party data on mortgage rates and alert sales reps at mortgage broker companies when to reach out to their prospects based on rate changes.
Software companies that are event-driven are going to be built on a fundamentally different stack compared to the last generation. In the past, companies used to have to build their own tracking pixels and ETL pipelines to route customer data properly. Today, companies are likely to be using customer event collection tools such as Segment and are building on a Modern Data Production Pipeline. As such, we believe that there is a rigid foundation that paves the way for the next generation of Event-Driven Systems to be built.
Imagine a world where people engage with you when you are ready to chat, and they know the questions that you already might have. In this world, spam no longer exists, instead it is personalized engagement. Every interaction is time well spent. At Emergence, we like to dream of companies that are changing the way the world works, and we believe that this is the way the world is headed.
Now is the time to become event-driven.
If you are thinking about building an Event-Driven Systems company, we would love to hear from you. Drop us a note at email@example.com / firstname.lastname@example.org.
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