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Wednesday, June 18, 2014

How Will Hootsuite Spend its $165m War Chest? The Battle for Enterprise Social Media Management Software Part 3



Last year, Hootsuite raised a whopping $165 million.Well known for its free and inexpensive Pro offerings, Hootsuite has set its targets on winning the enterprise. I recently caught up with Dee Anna McPherson, VP Marketing and Susan Perry, Senior Product Marketing Manager, Enterprise, at Hootsuite to get an update on their progress and plans.

This article follows interviews with executives at two other major social media vendors targeting the enterprise: the VP of Marketing at Sprinklr and the CEO at Spredfast.



What is Hootsuite Enterprise?

Hootsuite’s enterprise offering is derived from its Pro edition and offers some enterprise oriented features, removes usage restrictions, and comes with more robust services.

There two primary enterprise features are 1) Collaboration support: when a message comes in through a company account monitored by one function that is pertinent to another department, the message can be assigned and routed via the Hootsuite dashboard; 2) Permissions management: Enterprise enables a read-only permission level where messages drafted by team members require approval before publishing.

Two primary usage restrictions are removed 1) Social media accounts: there are no restrictions in the number of social accounts managed whereas Pro is limited to 50. Hootsuite shared that the average enterprise has 178 social media accounts; 2) Analytics Reporting: Enterprise clients have unlimited analytics reporting whereas Pro clients are restricted to 10 reports.There are also exclusive analytics modules for Enterprise clients that are integrated with Hootsuite’s back-end infrastructure.

Each enterprise client has a dedicated Customer Success Manager, tasked to answer questions, provide new product demonstrations, assist with upgrades, ensure goals are met, share best practices, and provide training. Additionally, Hootsuite provides Enterprise clients assistance with the implementation and launch of their platform. Enterprise clients also receive priority service on support tickets submitted online and can access support through email. Enterprise clients also get free access to an education and training database and customized training, e.g. for social media policy, is also available.

Lastly, Enterprise clients have first access to new features and functionality, including API access to networks like Pinterest.


Enterprise Adoption

Hootsuite defines its enterprise client base as those who adopt more than 10 seats. Based upon this criteria, Hootsuite reports 1,300 enterprise customers. Approximately 40 percent of the Hootsuite Enterprise reviews on TrustRadius are by companies with more than 500 employees.

Describing enterprise customer adoption, DeAnna stated, “Typical deployments are in the dozens of seats. We are seeing customers in the thousands of seats. More customers are transitioning from the social profile being solely maintained by marketing to having social centers of excellence which support social adoption across the enterprise. Q1 was a really good quarter. We added 186 new enterprise customers.”
Dee Anna also shared that Hootsuite has 42 enterprise customers with over 100 seats. Examples include John Wiley & Sons (250 seats), Local World (300+ seats), Tangerine Canada, formerly known as ING Direct (100+ seats), a major global hotel chain (1,000 seats), and a branch of the U.S. Military (1,000 seats).

To illustrate how a large enterprise customer uses Hootsuite Dee Anna shared, “We have a government sector client, a military organization, that’s using us for recruiting. They use Hootsuite to engage with their audience through geo-targeted messaging. They have different employees located around the country, and are using Hootsuite to target based upon demographics and language. It’s a very wide scale deployment. They use Hootsuite to collaborate, to hit their specific targets in regions.” 

The reviews of Hootsuite Enterprise on TrustRadius currently describe implementations of fewer than 30 seats in PR and marketing, though some, like this one, do extol the importance of team workflow capabilities.


Enterprise Product Direction

As we reported in our Buyer’s Guide to Social Media Management Software, large enterprise deployments have significant requirements for team member collaboration. Hootsuite Enterprise enables collaboration in three principal ways:

1) Avoiding duplicate response to tweets – responses are very visible in the dashboard.
2) Triage where response is required – messages can be assigned for follow-up.
3) Permissions management for content approval before publishing.

However, embedded capabilities for digital asset sharing are currently limited, “We do have our own content library in beta. We also integrate with Box, Dropbox, Uberflip, Kapost. We don’t want to disrupt a customer’s workflow.”

Hootsuite is planning further investments in workflow for collaboration, security and analytics. “We have addressed analytics through our acquisition of UberVU and will continue to innovate on that platform. We are building out security natively but also have a partnership with NextGate”. NextGate provides the following capabilities as a service:

1) Social media asset audits. An average enterprise has 178 social profiles. An audit can help identify unauthorized profiles.
2) On-going monitoring. This is particularly important for regulated industries. Monitoring messaging, keywords, and content that cannot be shared by employees; and supporting pre-approved content moderation.


Ubervu Analytics Acquisition

As we cited in the Social Buyer’s Guide, analytics is an important requirement for the enterprise. In January, Hootsuite acquired a small social analytics company called uberVU.  Dee Anna stated, “We wanted to acquire a next generation analytics company. When you look at the first generation tools like Radian6 and Brandwatch, they were designed to be used by analysts and are too complex. The technology was developed at a time when capturing the data was challenging. Today, you can buy access to social data. That’s a commodity. The newer analytics tools are much more advanced in terms of usability.” Dee Anna added, “Another thing that’s very popular with uberVU is the pricing model. You are not charged for more mentions. We hear that a lot from Radian6 customers.”

Ubervu has approximately 200 customers and while it currently has just two reviews on TrustRadius, both are extremely positive. The reviews on TrustRadius affirm Dee Anna’s statement:


UberVU has been added to the Hootsuite app directory, which means that social interactions in Hootsuite can be accessed by uberVU for analysis. Susan Perry stated, “We have a really robust ecosystem with over 100 applications with which we have integration including Salesforce, Zendesk, and Marketo. UberVU is now one of the apps.” When asked about plans for tighter integration beyond the app directory, Susan shared, “It’s our #1 priority. We will it complete this year.”


Social for Customer Support 

The customer support function is becoming an increasingly important area for Hootsuite, and social media management adoption in general. As one Hootsuite customer shared in a review “Today, 10% of [our] customer care cases originate in social media.

Dee Anna stated, “We typically start in marketing organization and social organization, and then oftentimes the next department is customer support. It’s a very important area. Customers are wanting and expecting to have responses from companies. Typically the marketing department is the one that is monitoring chatter, but their metrics do not focus on response.” 

One client using Hootsuite for support in an enterprise context is Flightcenter, says Dee Anna. They have agents across the world and try to direct people to their social channel. “They are able to monitor all the conversations that are happening.  They can proactively identify those customers and respond to them.”


Social Selling

Using social to boost sales is also growing in significance. Dee Anna shared, “We’re seeing that it’s very important in B2B as there are longer sales cycles and you’re building that relationship.  Social can enable sales reps to build their reputation as an expert.”

Hootsuite is starting to see roll-outs to entire sales teams; however they are finding that training is key. Susan shared, “We will be launching a new service offering custom education for enterprise customers that have a social business strategy and want bespoke training.” 


Competition

When asked about competition, they cited the Marketing Cloud offerings from Salesforce (formerly Radian6 and BuddyMedia) and Adobe as primary competitors.

When prompted about whether they compete with enterprise focused social vendors like Sprinklr and Spredfast, they said sometimes. Based upon 19,282 comparisons run by social media software buyers on TrustRadius during Q1 2014, Hootsuite enterprise is compared most frequently to Sprout Social (19%), Radian6/Salesforce Marketing Cloud (9%), Sprinklr (7%), and Spredfast (7%). It is compared to Adobe Social just 3% of the time.

When asked about differentiation when compared to the large software company Marketing Clouds, Dee Anna responded, “We emphasize our social DNA. Social moves very quickly. Being a nimble, smaller organization allows us to change. On top of that, we emphasize our ease of use as an analytics product, and our level of support and service, as we live and breathe social”.

When asked how they differentiate themselves from pure-play enterprise social vendors like Sprinklr and Spredfast, Dee Anna expressed, “Look at the adoption of Hootsuite. We have 9 million users. That ability to scale gives customers great comfort. We have customers in highly regulated industries. We provide peace of mind about security and scale. We are also focused on education to ensure our customers are getting ROI – we have been able to educate 60,000 professionals.”


Globalization

One of the areas they are spending their $165m is international expansion. “We’re very focused on being able to support global customers. Our dashboard is available in 16 languages, and we offer support in six. Our European headquarters is in London and we have a development center (through the acquisition of Ubervu) in Bucharest. We have 100 employees in Europe. We have launched in Asia Pacific. Our Singapore office is both for sales and support. We integrate with 25 social networks including Bebo and the major Chinese and Russian networks.


Closing Thoughts

Hootsuite has leveraged the freemium model very effectively to build a massive client base and significant brand recognition. That model has also allowed it to penetrate the enterprise rapidly, albeit mostly in small pockets or departmental implementations. However, to be a true enterprise contender, the platform will need to evolve significantly. The $165m in funding is a huge war chest to both fund organic development and further acquisitions. The company is also using its funds to add enterprise DNA. They hired a new CTO who was formerly VP Product & Technology at Groupon and VP Technology at Expedia. They also hired a VP of Community who was formerly Cisco’s Senior Director of Social and Digital Marketing.

If you're a Hootsuite Enterprise customer, please share your opinion by writing a review or adding your comment below.

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