Less than a year after a controversial report highlighted major complaints among Siebel Systems Inc.'s reference customers, new research that Siebel paid for states that nearly all of its customers are satisfied.
Boston-based analyst firm Aberdeen Group produced the new report. Aberdeen surveyed 325 individual Siebel customers, 69% of which have used the San Mateo, Calif., vendor's software for more than one year. Thirty-seven percent of the respondents have been live for more than two years.
The results featured some gaudy statistics. According to Aberdeen, 95% of Siebel's customers are satisfied and said they would continue to use Siebel CRM. Seventy-three percent indicated that they plan to expand or upgrade their Siebel CRM systems sometime during the next year.
In terms of specific business benefits experienced by customers surveyed, the report states that, on average, sales productivity increased by 17%, service and contact center efficiency grew by 16% and marketing effectiveness rose by 12%.
The report found that nine out of 10 respondents would recommend Siebel to other companies. Fewer than 1% of users said they would discontinue using their Siebel systems altogether, with a mere 1.5% reporting that they plan to change software vendors.
Some may wonder if those numbers are too good to be true for the largest vendor in this software sector and one whose failure rate has been widely publicized.
In fact, the Aberdeen report stands in stark contrast to a report published last fall by Wellesley, Mass.-based Nucleus Research. That survey of 23 reference customers listed on Siebel's Web site found that 61% of users did not achieve return on investment (ROI) after two years of use. Most of the complaints revolved around challenges with end-user training and systems customization.
Just two weeks ago, Siebel was publicly embarrassed when several slides from a confidential internal report on customer satisfaction were mailed to analysts and reporters. The slides showed a moderate level of dissatisfaction with some features in Siebel 7.
When asked how the Aberdeen survey could stray so drastically from other research, report author Denis Pombriant, a vice president and managing director at Aberdeen, said it's a simple matter of methodology and perceptions.
"A couple of years back, someone said that 80% of all CRM projects would fail, but there was no data to back that claim up; it was just an estimate," Pombriant said. "That estimate took on a life of its own, and this is the first time anyone really said, 'let's ask the customers.'"
Pombriant disputed the Nucleus report, saying that a survey of 23 users couldn't compare with his research methodology, which began with questionnaires sent out to more than 1,400 Siebel CRM customers, roughly half the vendor's total installed base.
According to Pombriant, in the past, Siebel deserved a less-than-stellar reputation. In fact, he said he had heard from some customers that they'd prefer a CRM vendor "that's easier to deal with." However, Pombriant pointed out that this sort of response is very much in keeping with the mold of fast-growing, young companies.
Such was the case with Siebel several years ago, but Pombriant said his one-on-one interviews with current users found that, while some customers would still say the software maker is hard to deal with, many have noticed an improvement during the last six to12 months.
Like Siebel, Aberdeen has also drawn its share of criticism of late. In June 2002, The Wall Street Journal reported that the research firm had written positive reports on companies paying for its services. Aberdeen officials quoted for that story cited this apparent breach in objectivity as a commonly accepted practice across the research industry.
When asked about the possibility that some CRM market observers might link this latest Siebel-sponsored report with that criticism, Pombriant defended his research.
"I think reasonable people will conclude that the evidence in this case points to Aberdeen producing a respectable report," he said. "We got the big number of respondents we were looking for, and this report is far more statistically valid than research other firms have publicized."
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