Earlier this month, Sprinklr announced its Q2 revenues, which grew 11 percent year-over-year (YoY) to $197.2MN.
Such double-digit growth is strong in the CX tech space. Yet, it’s notably down from 18 percent, the figure Sprinklr recorded in the same quarter of last year.
That’s perhaps a surprise, given Sprinklr’s reported megadeals over the past 12 months, including high-profile wins with Deutsche Telekom and BT.
Nevertheless, during the earnings call, Ragy Thomas, Founder & Co-CEO of Sprinklr, pinpointed three core reasons for its stalling revenue growth:
- A renewal process that was not effective enough in demonstrating value.
- A push into CCaaS has required Sprinklr to invest more in product and implementation as it gained scale in a competitive market.
- Entering new markets and launching new product innovations quickly over the past three years has added product and operational complexity.
The first issue is commonplace in CX tech. As such, brands are doing more to help customers track the impact of their solutions and ensure they’re leveraging more of what’s available. Salesforce’s recent release of a product discovery tool for Service Cloud is an excellent example.
For Sprinklr, that issue is particularly pronounced. After all, many still put it in the box of social media management when it’s much more than that. So, if there are customers just using its tech to schedule social posts, they’re overpaying and missing out on significant value.
Yet, the latter two reasons align with how it shifted to CCaaS, with Thomas admitting that Sprinklr had to onboard “40 years of learning” to scale its contact center business to proficiently meet global demand.
Along the way, Sprinklr suffered growing pains. But now, the CEO believes the business is much better placed to deliver value to its CCaaS customers.
Sprinklr on Growing Pains and Its Newfound CCaaS Muscle
Many vendors, including Microsoft and Google, have pivoted towards CCaaS over the past couple of years. Impressively, Sprinklr has matched these heavyweights with several megadeals.
However, most enterprises – the brands Sprinklr wants to attract – still choose the likes of Five9, Genesys, and NICE to support their CCaaS transformations.
Why? Because of the complexity of a global contact center roll-out. That includes regional partnerships, worldwide carrier relationships, and custom solutions for specific market regulations. It’s a muscle that a CCaaS vendor must build-out.
Sprinklr has had to do that while gaining customers at an unexpectedly successful rate, resulting in the business having to handle new layers of business complexity, fast. That comes back to the “40 years of learning” that Thomas noted.
Fortunately, the CEO suggests that Sprinklr has now digested much of that learning. “What we’re doing is developing partners and building our own internal muscle, creating playbooks, working with an external company to document it so we can enable our partners,” he said.
I’d say it is probably the first quarter that we feel like the bulk of the heavy lifting and development is done.
Now, much of the focus will turn to simplifying the CCaaS adoption process for on-premises contact centers, which – in some cases – have leveraged their legacy platforms for 20+ years.
“There’s a lot of learning on how do you troubleshoot the customers’ infrastructure instrument and fix things quickly when they’re not in your control,” Thomas continued.
“[But], I’m pretty happy with the way we are progressing.”
While the openness of Thomas in discussing those struggles is refreshing, the CEO also shared several recent successes of Sprinklr’s CCaaS customers.
For instance, he highlighted how a large North American retailer – which leveraged Sprinklr’s CCaaS and conversational AI platforms together – increased its call deflection rate by 35 percent. That resulted in an estimated 420,000 fewer calls a year for live agents.
Meanwhile, a large global bank reported that customer usage of its AI self-service increased by 60 percent. It also launched several successful outbound virtual agent campaigns.
Such examples aim to demonstrate the value proposition of Sprinklr to some of the world’s largest enterprise customers, which have embraced Sprinklr’s vision.
The Vision Hasn’t Changed: To Become the Operating System for All Customer Conversations
Across all the channels customers engage through, customer experience teams are more closely considering how they connect.
Whether they are near and dear or sit at the perimeter of the experience stack, brands understand the need to pay more attention to what is being said, felt, and contributed to deliver more consistent experiences.
Sprinklr’s vision appeals to these brands, as it aims to become – via its Unified CXM offering – the operating system for all customer conversations. Customer service interactions and CCaaS are just one – albeit hugely significant – part of that.
As Liz Miller, VP & Principal Analyst at Constellation Research, stated on LinkedIn Live: “They have a bigger vision and an enclave of CX functions and pros that they’re looking to tie together and empower, whether they sit in sales, service, or marketing…
Wherever that person sits, they should be able to hear the same high-fidelity signal that influences email, advertising campaigns, earned media… It needs to run across all of it. That’s their vision.
That vision hasn’t pivoted, despite its CCaaS success. The message just keeps changing. While Sprinklr may not have always got that right, it has always had the same focus.
“They know who they want to have be their customer,” continued Miller. “Those are the companies… that want to see all those experiences and engagements come together in a connected, measured, intentional manner. They want to solve big problems.”
Sprinklr must stay on top of rising AI, communications, and digital requirements across the front office to do that.
Thankfully, the company – with a new co-CEO strategy – appears much better set to do that than 12 months ago.
