Top News Thursday, June 4, 2015
Anyone who worked with customer relationship management (CRM) software back in the PC era knew that once upon a time, there were really only two CRM software packages out there: Act! and Goldmine. Recently, Denver-based Swiftpage (www.swiftpage.com) acquired Act!, and is updating that software for the Internet age. We spoke with John Oechsle, President and CEO of Swiftpage, on how the company is bringing Act! into the cloud, and how the company ended up owning the Act! software and brand.
Tell us a little bit about how Swiftpage ended up owning Act!?
John Oechsle: We were foundedin 2001, by three serial entrepreneurs, Bob Ogdon, Matt Scholwater, and Frank Johnson. They originally established Swiftpage as an email marketing company. I came along as an investor, and joined the board around 2006, and eventually took over as CEO in 2012. The company had started out and grown rapidly to around $5M in revenue, mostly focused on white labeling and OEMing our email marketing technology. One of the products that we OEMed our product into was Act! and Saleslogix. In mid 2012, Sage, which owned those properties, divested those properties as well as five others, and we worked with a couple of partners and were able to acquired both Act! and Saleslogix in March of 2013.
Why did you make that acquisition?
John Oechsle: It was a very good thing for the company, and it was a good fit. We had rapidly integrated Swiftpage and Act!, and also had Saleslogix, which was more of an enterprise software product mostly competing with Salesforce, SugarCRM, and Microsoft Dynamix. We held Saleslogix for fifteen months, and then divested that in September of 2014 and slowly focused our attention back on our roots, as a maker of small business software. The reason we were so excited to acquired Act!, is that it’s been around for probably 28 years. Over the years, it has had over 8 million customers and users. However, beyond that, it was the niche that Act! served that really got us excited, which is micro and small businesses. There are four, distinct areas that small businesses need to grow. The first is presence, such as a website and Facebook, and that’s very crowded. Everybody needs to do that. Once they have a web page, they realize that no one is coming to that page, so they start looking at generating traffic, using SEO, SEM, to hopefully start driving an enormous amount of customers to a site. That generates leads, and they then need to figure out what to do ith those leads. That’s the third part, conversion and retention, the conversion of those customers. The fourth part, is optimization tools, optimizing finances, software, HR, payment systems, and etc. Where we solidly play is in conversion and retention. What we saw with Act!, is it is at the center of the universe for conversion and retention. It’s the center of the universe, because it houses critical information for small businesses to grow. It has all of the information about their customer. That’s why we got excited to buy that. With email marketing, you have only a very small piece of that information.
Act! had stagnated quite a bit at Sage, did that give you pause when you decided to purchase the software line?
John Oechsle: It did stagnate when it was owned by Sage, and sat unattended for almost four years. There was very little, if any investment in technology, and there was no marketing and no development. However, it has a phenomenal brand recognition across the world and across the country. If you talk to anyone, in any country, people know Act!. However, when you talk about Act!, they definitely ask you—is Act!still around? We had a challenge, of taking something with great brand recognition, but a tired brand, and figure out how you refresh that. A couple of ways we’ve done that, obviously, is a lot of brand messaging. But, more importantly, we’re taking the technology and the application, refreshing that, making it contemporary, and reintroducing it to the market. That’s what we’ve been working on for the past eighteen to 24 months. That application, which was a tired, desktop only application, was still very functional and had people using it, but people were tired of having to download it to their desktop and buying a perpetual license. So, instead, we created a new portfolio of Act! software, including a pure, software-as-a-service, lighte version of Act!, called Act! Cloud. We just rebranded that recently as Act! Essentials, which costs $10 a month, and is geared towards the solopreneur up to five users. That is pure SaaS, and runs on any device. We then took Act!Premium, the desktop software, wrapped that into APIs, and put it into the cloud. That really lifted the portfolio. So now, we have three main components, Act! Essentials, Act! Premium, and Act! Premium Cloud. We’ve also decided to move to a subscription model. We found out that, even though we had a contemporary portfolio, modern look and feel, improved brand messaging and a different constituency, no one wants to buy perpetual licenses. They really want a flexible payment system and subscription. That’s what we launched recently, which is making our entire portfolio available via subscription. The entry point is Act! Essentials at $10, Act! Premium at $25 per month, which you can either run on your servers or on our cloud, and Act! Premium Cloud for $35 a month. Really, we’ve completely refreshed our portfolio. Everyone is talking about the new Act!, which has the same great functionality, is now cloud based and subscription based, and runs on any device.
How would you compare this to Salesforce and other CRM companies—where is your sweet spot?
John Oechsle: Our sweet spot is micro and small businesses. We define micro as one employee or solopreneur, to probably ten employees. Anything from ten to fifty employees is what we think of as a small business. Our super sweet spot is one to 25 employees. If you look at the competitive field, there is Salesforce, SugarCRM, and Microsoft, and they’re all bigger players. However, they don’t like to come anywhere below forty seats, because below forty and it’s just not economic for them. So, we don’t run into them very often, except every so often, when someone might be looking for fifty seats, and they might include us. At the lower end, we’ll run into Zoho and Insightly, but we never see Goldmine anymore—I don’t think they’re even a viable competitor. But, believe it or not, our biggest competitor in that area are Excel spreadsheet and Microsoft Outlook. People at the very low end are using that. Once they take a look, they see that we have an ability to help provide an essential point of information on their customers, and to help market to those customers, and capture every interaction across their business, and that we even offer a recommendation engine. One of the most difficult things for micro and small businesses, is that they don’t have a lot of time to sit in front of software, and enter data, and get a Ph.D. In computer science to write reports and that sort of thing.What we do, is provide a recommendation engine, which creates a to-do list, which on the low end gives you a call list, and at the upper end gives you an action list, which basically tells you every day what the next interaction you should have, in order to continue to drive a transaction. The software actually works for them, and with them, rather than you working for the software. That’s a big differentiator.
What’s your big goal now, and what should we be watching for?
John Oechsle: Right now, we have over 400,000 active users. We’d like to see fifty percent of them convert in the next 24 months to a subscription plan, and would like to see another 100,000 net new users added to the platform. At that point, we’ll have almost 75 percent of our existing customer base on our new subscription plan. The other thing to be looking out for, now that we’ve released our subscription plan and platform, is to continue to add to that platform, both with strategic partnerships, acquisitions, or just pure integration with things like Office365, native Mac iOS and Android clients, and integration with different payment systems. There’s also a whole set of integration with e-commerce products out there. We’re spending an enormous amount of time taking conversion and retention, and integrating it across the entire small business stack.