Another week, another billion-dollar customer experience management software company. Sprinklr which offers what it calls a unified customer experience management (CXM) software suite, could be worth $5 billion by next week. The company filed with the U.S. Securities and Exchange Commission (SEC) on Monday, June 14 its initial public offering registration statement. It plans to sell next week 19 million shares at proceeds of around $335.2 million and could net a market capitalization topping $5 billion.
That would put it on the level of competitor Medallia, which has a market cap of around $5 billion as of this week. The Sprinklr news also comes about five months after another competitor, Qualtrics, went public and now sits with a market cap of $18.9 billion.
Not bad for survey software, right? OK, before the vendor community comes screaming at us for that jab, we’ll agree: the customer experience management software space has grown far beyond plugging in some surveys alongside checkpoints of the customer journey. So what does 12-year-old Sprinklr’s financial surge signal for the space?
“Overall, tech like this broadens the horizon for customer experience pros who must keep helping their organizations find modern ways to meet customers where they are, listen and respond, while managing risk,” said Stephanie Thum, CCXP, founding principal at Practical CX.
Where Sprinklr Fits Into the Market
The Sprinklr $5 billion IPO aspiration is yet another investment that validates the VoC and CX market as more than a third-party application that plugs surveys into large customer experience management software suites. (Sprinklr declined commentary for this piece because of a “quiet period.”)
It’s not cheap to deploy these full suites. Qualtrics had the highest percentage of deals over $1 million out of the vendors Gartner analyzed in its Magic Quadrant for Voice of the Customer published in November of 2020. Medallia, meanwhile, had the highest average revenue per customer. The number 1 reason for brands not investing in Qualtrics and Medallia according to Gartner’s research was cost.
Sprinklr, which had 1,021 customers as of April 30, was not included in that Gartner MQ. It has been recognized as a leader in Forrester’s Social Suites, Social Listening Platforms, Content Marketing for B2C Marketers, Social Advertising Technology, Social Media Management Solutions and Sales Social Engagement Waves and Gartner’s Content Marketing Platforms Magic Quadrant.
Sprinklr boasts in its SEC filing that its architecture, AI, enterprise-grade platform and data scale are its key differentiators. More specifically, it offers:
- Unified architecture, built to address modern channel proliferation
- Modern listening, built for digitally led, real-time and conversational data, yielding actionable insights
- Purpose-built customer experience AI engine for predicting intent
- Rapid deployment generates ROI
- Scalable enterprise-grade platform
“Sprinklr’s competitive advantage is the ability to have one true omni-channel platform to listen to everything, engage with customers, use AI to operationalize your processes and teams, and most importantly, to gain access to key information that drives not only meaningful, but actionable business insights,” said Amanda Sternquist, global head of the digital engagement practice at HGS Digital, a Sprinklr partner.
Related Article: What Does the Qualtrics $14 Billion IPO Mean for the CX Market?
CX Leaders Top Investment Priorities
More than half of digital customer experience leaders told CMSWire in its State of Digital Customer Experience 2021 report they see analytics, insights and dashboarding as a top investment priority (51%). Trailing behind are the following items:
- Customer journey analysis & optimization: 37%
- Digital experience/Web CMS platforms: 36%
- Personas, targeting and/or personalization: 34%
- Social listening and engagement: 29%
- Marketing automation and orchestration: 27%
- Mobile apps or mobile touch points: 25%
- Skills and training: 24%
- Voice of the Customer programs: 24%
“One common conversation thread in the customer experience world right now is that it is harder than ever to get customers to respond to surveys,” Thum said. “Feedback is vital, yet fewer and fewer customers want to answer surveys. So, businesses and government organizations must find other ways to listen and understand customer sentiment, on the customer’s terms. That is one of the business challenges this tech (like Sprinklr’s) helps to solve.”
A Glimpse Inside Implementations
Implementation and services are naturally a big part of software in this space. Gartner noted in its VoC Magic Quadrant issues related to a lack of professional services options for some vendors, and disconnect in architectures and instances that lead to problems with upgrades and configurations.
“Implementations are intended to be collaborative with the client,” Sternquist said of Sprinklr implementations, which her company does. “Sprinklr seeks to deeply understand their business problems and the use case that has led the client to seek a SaaS solution. From there, it’s all about the capabilities of the team, understand what they know and informing them of the details and opportunities that they don’t know that they don’t know. ”
Integration in this space needs careful planning and attention, Thum added. Nothing is ever as easy as you think it will be, and you need to make sure you have staff who understand how to use it and know how to communicate the insights within the organization. IT, CX, HR and others from within an organization need to partner up to get the most from their investment.
Related Article: What Is Customer Experience Management?
Big or Small Customer Play Here?
Until recently Sprinklr was primarily known for its large enterprise solutions, but it has made great strides in the past year to develop an SMB solution that fits the needs of any business, according to Sternquist. The SMB market is saturated with tools, and there may not have been an immediately obvious opening for a “big technology” like Sprinklr, and its price point might have excluded them right away.
Sprinklr in its SEC filing this week said it indeed focuses on selling its platform to large global enterprises, which it defines as businesses that have greater than $100 million in annual sales. No single customer accounted for more than 5% of Sprinklr’s revenue in the fiscal years ending January 31, 2020 and 2021 and the three months ended April 30, 2020 and 2021.
Future Is Bringing Automation and Deeper AI
Many brands today are focused on streamlining their social processes and managing both proactive and reactive conversation in one place. Sprinklr also solves for additional business problems, like CRM integrations, deep insight and analytics of their brand, their competitors, their industries, and even product and locations, according to Sternquist.
Sprinklr also helps with surveying, bots, chat, SMS, email and now telephony needs. “The best part is that all of that data then feeds into a central repository giving the brand one enterprise-wide look at what people are saying and how they are interacting with their brand,” she said. “Competitive insights offer even more opportunity to hone in on the revenue generation opportunities in their markets.”
What’s next for software like this? The next wave for software companies like Sprinklr will be to integrate more automation, back office bots to help assist in the currently human-guided processes and deeper more intuitive artificial intelligence capabilities. "This is not always intended to replace human jobs," Sternquist said, "but to allow us as users to work smarter and more efficiently in our roles."