This is the latest in Localogy’s Website Windup series. It examines the ongoing evolution and advancement of SMB-focused website builders, including acquisitions and feature expansion to enhance product bundles.
Expansion activity in the website world continues to accelerate. Website builders from GoDaddy to Automattic expand functionality to create more attractive bundles. That includes things that stem naturally from websites — everything from eCommerce and CRM to social and marketing suites.
For similar reasons, we’ve seen expansion in the opposite direction, such as Constant Contact’s move into websites. The driver in all of the above is to grow average revenue per user and work towards all-important recurring revenue by embedding a service deeper into SMBs’ daily operations.
One of the exemplars on this list is Wix. After launching eCommerce and payment tools, expanding in Turkey, and acquiring Websplanet, its latest move is to spin out its customer support function as its own company. This gives it greater capacity to develop as a platform, which can be seen already.
Known as Wix Answers, this is a holistic customer support tool, including a full picture of customer queries from support ticket to resolution. It’s built to handle a range of incoming queries that businesses can get, including SMBs in verticals from retail to home services.
Its “360 degree view” notably includes some CRM components in being able to append customer data to a given support request. That can help businesses prioritize service requests based on things such as a customer’s importance (spending levels, longevity, support history, etc.).
Wix Answers also tracks activity across channels, given the fragmenting set of platforms and devices through which we communicate. That includes phone, chat, website ticket or email. Federating these within and across service tickets is a sizable pain point in the world of customer support.
This all comes together in a single dashboard (screenshots below) that includes several possible views and ways to filter information. It also includes some AI-driven recommendation features to prompt support agents to see potentially-relevant information about a given customer
Notably, Wix Answers sprouted from the company’s home-grown customer support tool that it uses. After scratching that internal itch, it recognized the value of the software and spun it out as its own product and company. We’ve seen this playbook before, including hit products like AWS.
One of the drivers here, as noted, is that expanded features can boost revenue per user and lifetime value. It’s all about having more tentacles that reach into business operations, thus anchoring a given vendor as a software provider. That can engender a lock-in effect, pursuant to recurring revenue.
Providing customer support software aligns with this concept and can deepen SMB relationships through vertical-integration. That depth of relationship results from the fact that a customer support system can be a mission-critical tool that’s deeply woven into a given SMB’s operations.
This deal also fits our prediction that we’ll continue to see lots of M&A activity in the SMB website sector, including CRM. As we wrote in December:
Website Builders Continue to Broaden Functionality: As the website sector in general matures, there’s less growth so competition intensifies for market share. The result is a spate of moves in the past six months to beef up their bundle of services with more functionality to attract customers and reduce churn. This has ratcheted up as website builders like GoDaddy, Automattic and others are rapidly expanding (though building and buying) to offer marketing and promotion, in addition to the core “presence” functionality of websites. That will continue into 2020, with feature expansion that most prominently includes email marketing, SEO and CRM.
We expect more feature expansion in the website builder space and will report back as we hear more about this deal. Meanwhile, see more about Wix Answers here, and check out our recent expert roundtable in which we unpacked some of the strategic dynamics of the website-builder sector.
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Mike Boland, senior analyst with the Localogy, was one of Silicon Valley’s first tech reporters of the internet age as a staff reporter for Forbes magazine starting in 2000. His comments have appeared in The New Yorker, The Wall Street Journal and The New York Times.