New year, new CEO proved the mantra for several customer experience stalwarts last month.
Indeed, Twilio, Vonage, and GoTo each replaced the head honcho of their executive table.
Of course, each company has its reasons – as shared below. Yet, Zeus Kerravala, Principal Analyst at ZK Research, believes it’s indicative of a much broader market trend.
"The capital markets have spoken," he told UC Today’s Big News Update. “A few years ago, they rewarded companies for growth at all costs.
Twilio, alongside brands like 8x8, RingCentral, and Zoom, poured money into their sales and marketing efforts in that environment. The latter two brands spent up to 50 percent of their revenue on such activities.
As a result, these brands reported big losses but also big growth. According to Kerravala, that led to ridiculous valuations.
"Today, that has changed," he said. "Wall Street rewards profitability, which brings a different executive skillset.
The goal now is to hunker down and try to run a profitable organization. That includes growing your customer base but also your stature within that base.
That trend proved present at even the biggest CX companies last year, with Salesforce focusing on profitability after investor pressure.
Such pressure may have influenced changes at the top of several other CX companies last year, too. Indeed, 8x8, Aircall, Calabrio, Cresta, Momentive (now SurveyMoney), RingCentral, and Sangoma all switched CEOs last year.
Yet, if January is a sign of what’s to come, expect even more changes in 2024. As Kerravala concluded:
It is something I hope we see more of because it’s a different time, and it’s good to bring some new talent into this industry.
What Happened at Twilio, Vonage, and GoTo?
Twilio recorded $1.38BN in annual net losses in May 2023, and despite a big push to profitability, it still records $100MN+ in losses each quarter.
Addressing this status quo is likely a significant focus for new CEO Khozema Shipchandler.
Yet, Jon Arnold, Principal Analyst at J Arnold & Associates, suggests that the go-to-market has held Twilio back in the customer experience space – and that needs adjusting, fast.
"Any company that is engineering- and developer-driven… it’s a risky approach," he said.