Enterprise Engagement Tech Remains Blue Ocean: Big Money Still Focuses on Gifting and Recognition
Eight years since ESM published a report on the potential for enterprise engagement technology, no technology company has yet come close to doing for stakeholder engagement what Salesforce has done for customer relationship management (CRM): create a thriving marketplace of tens of thousands of implementers customizing the technology for individual organizations. In fact, venture capital and private equity money continues to flow into the recognition and gifting marketplaces that have never yet scaled to investor expectations.By Bruce Bolger
What Is Enterprise Engagement Technology
The Current State of Engagement Technology Options
Where Is Engagement Value Truly Created? Rewards or Program Design and Impact Measurement
The Opportunity for an Internal Engagement Rollup Strategy
Enterprise Engagement Technology Companies
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Can there be a true unicorn in engagement technology? After almost 30 years since the dot-com boon, it has never occurred, and the jury remains out that any company will come close to what Salesforce and other technology firms have accomplished in terms of revenues, profits, and scale: not one engagement tech has ever gone public despite probably over 100 funding rounds since 1996, including from some of the biggest Silicon Valley venture capital firm.
This article updates the state of the Enterprise Engagement technology marketplace published two years ago. As of today, it remains a category with enormous unfulfilled potential. The leading technology players remain focused on selling channel and consumer engagement programs; gifting; recognition, and niche loyalty programs, and the majority are small, privately owned companies with no outside funding. Not one company has formally embraced the vision of creating a highly configurable enterprise engagement technology to harmonize the interests of all stakeholders and integrate and align the myriad communications, voice and survey, recognition, appreciation, incentive, reward, wellness, safety, and other engagement tactics dispersed ad hoc across most mid- to large-size organizations.
What Is Enterprise Engagement Technology 
The Enterprise Engagement Alliance first identified the opportunity for Enterprise Engagement technology in 2017 as outlined in this special ESM report. The EEA company created to promote ISO and related certifications, International Center for Enterprise Engagement (now under independent ownership) created an ISO 10018 certification for enterprise engagement technology. Augeo, the Minneapolis-based full service engagement agency, is the only company with the ISO 10018 certification for its technology. The certification, renewable every three years, remains in effect.
Nonetheless, eight years later, even though a half-dozen or so companies provide what can be defined as enterprise engagement technology, not one markets itself that way. The emphasis remains on rewards, recognition, gifting; using communication, surveys, and learning as part of that effort, generally supported with mostly unsubstantiated claims about business results. Not one company analyzed for this report across any of the technology companies provides any concrete information on the actual impact of their solution on profits or other concrete metrics.
Essentially, enterprise engagement technology enables companies to house all key engagement efforts on a single configurable platform for each group of stakeholders—customers, sales and non-sales employees, distribution and supply chain partners, communities, shareholders, or any stakeholders. Moreover, the platforms include a common set of tools for communications; surveys, suggestions, feedback; learning; social recognition and appreciation; rewards; analytics, and more, so that all stakeholders have the same experience customized for their needs.These platforms provide tangible value by making it far easier to harmonize the interests of all stakeholders toward a common purpose, goals, and objectives, and to ensure the alignment of all the tools used to engage people. They support the implementation of holistic strategies and tactics that integrate communications, training, rewards, etc., across the organization rather than letting these fall into the traditional silo traps.
Does it make sense for even a small to medium-size business to have different programs for sales and non-sales employees; customers; distribution and supply chain partners, and other stakeholders, when it’s possible to run multiple types of engagement tactics to different audiences using the same platform and tools? Doesn’t it make sense for organizations to have all their engagement tactics on a single, configurable platform with the same branding, as they have for all their other business functions? Visualize seamless cross-functional analytics. Imagine the ability to harmonize the interests of all stakeholders across the enterprise.
On the other hand, for companies that are mostly running simple do-this, get that campaigns, or aren’t seriously measuring the impact anyway, enterprise engagement technology sounds like corporate speak.
The Current State of Engagement Technology Options
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Today, the engagement technology world remains a highly fragmented marketplace of several dozen recognition, gifting, and loyalty platforms. Only a few enterprise engagement platforms enable organizations to engage all their stakeholders on a single interface, with specific incentive, recognition, communication, social walls, surveys and suggestions, gamification, and metrics as needed for each audience or program. None of these have done what it takes to create a true unicorn: build a universe of implementers dedicated to helping their clients configure the technology to meet specific needs considered worthy of an ongoing serious investment.Engagement remains the equivalent of telecommunications and electricity in the early days: A tangled mess. If I were an investor in the engagement space, I’d ask two questions:
- What are any of the gifting companies doing that can’t be done via retail or some other competitor with greater transparency. Look at the Smart Gift platform of 1-800-Flowers.com building off the retail base of a publicly held retail brand that includes Harry & David and nearly a dozen other desirable gifting brands.
- What tangible value are recognition platforms providing that make them a must-have in a belt-tightening economy? Do companies really need these fixed costs when they won’t have any measurable impact unless the front-line managers are engaged in using them, or when no one is seriously measuring their tangible impact measurement other than perhaps enhanced employee engagement scores? Would these investments stand the test of what today are easy to conduct assessments?
- Engagement agencies. This category includes few major engagement agencies focused on helping large companies engage multiple audiences, customers, employees, distribution and supply chain partners—companies such as BI Worldwide, Augeo, Maritz, ITA Group, EGR International, Madison Global, Next Level Performance, Xceleration, Motivation Excellence, Extu, Brandmovers, 360 Insights, One10 Marketing, Rymax, each of which offer their own technologies. Only Augeo promotes a multi-stakeholder, holistic enterprise engagement technology platform. None of these companies have a technology or distributor model analogous to Salesforce or other technology platforms.
- Recognition platforms. About a dozen recognition firms most recently Awardco have received venture capital or private equity funding, but none in the 30 years since money has flowed into this category have ever come close to fulfilling the promise of the original investors. The best known companies include Workhuman.com, O.C. Tanner,Terryberry, Achievers, Bonusly, Kudos, Worktango, Motivosity, Engage2Excel, Inspirus (part of the enormous Sodexo conglomerate) and Merit Incentives in the Middle East, None have shown any signs of scaling to the potential achieved by companies like Salesforce, Microsoft, Hubspot, Apple, Oracle, and other technology platforms, nor have any built a robust channel of engaged distribution partners—the only proven way to truly scale technology. Many recognition platforms are created and sold by smaller privately held recognition firms such as All-Star Incentives, CA Short, Engage2Excel, Point Recognition, Quality Incentives, RecognNation, Rewardian, some of which sell through promotional distributors.
- Gifting companies. Snappy, Smartgift.com by 1-800-Flowers.com, Runa, Tremendous (previously Sendosa), E-gifter, Neocurrency, E-commerce by CarltonOne, CatalogAPI, Fasteezy by Incentco, Pulse Experiential Travel and others support rewards and gifting only. Most are sold directly to end-users.
- Loyalty or targeted consumer platforms. There are a growing number of sector or function specific platforms, such as Bilt or Incentco for the rental appartment market; Seated for restaurants, and Upside for gas.
Where Is Engagement Value Truly Created? Rewards or Program Design and Impact Measurement
An old adage of investing is to go where the most value is created. That does not apply to the engagement space. Investors in the engagement technology field for decades have assumed the greatest source of value creation exists in simplifying rewards, recognition and gifting, even though very few senior executives rate gifting and rewards as a top priority or challenge. On the other hand, having highly engaged customers and employees working at their best is usually considered a high priority, especially when the efforts can be measured in terms of profitability or other tangible impacts. In no field is technology alone sufficient to create measurable value: it always requires addressing an unmet need configured to each organization's requirements along with the engagement of all the stakeholders involved and some kind of measurable outcome.
Almost all the engagement investment money has poured into recognition and gifting platforms designed to provide what investors see as a scalable return based on developing a user base of millions of people redeeming or giving rewards. Few in the private equity or venture capital world apparently wish to hear the term “professionals services,” but the fact remains that none of these platforms create any tangible value even close to that offered by customer relationship management, employee relationship management or human resources information systems, which have become in essence necessities by automating tedious processes. Companies will pay upwards of $70 per seat for CRM; they struggle to pay $1 a seat for engagement technology.
Almost everything the gifting and even recognition platforms offer can be easily duplicated today by multiple companies with minimal switching pain—adding the AI buzzword and related features is table stakes. It remains to be seen if Awardco.com, the latest recipient of investor largesse in the recognition, will find a way to do what no one in recognition technology has done before it: demonstrate a level of value differentiation for which organizations will make a serious financial commitment as they do in CRM. What is in fact the sustainable return on investment in any recognition platform in terms of tangible returns sufficient to get the attention of the C-suite?
The unicorn technology companies in other fields have addressed this issue by creating legions of third-party companies that implement the technologies on behalf of the end-user, providing all the program design, implementation, and measurement the technology companies prefer to avoid. This model, while employed to some degree in the engagement space, has yet to yield a result analogous to what has occurred throughout the rest of the technology world.
The Opportunity for an Internal Engagement Rollup Strategy
There is a compelling reason why so many investors continue to put money into a category that has never provided the desired results. There are over 200,000 US companies with sales of over $10 million, every one of which can benefit from having happier investors, more loyal customers and distribution partners, highly engaged non-sales and sales employees, donors, volunteers, etc. However, there is currently no way to measure the return on investment of almost any engagement effort as there is in technology to manage customer relationship management and multiple related business processes that otherwise would be done manually by hand, email, and spreadsheets. So, rather than being willing to pay $50 or more per seat to use CRM or other types of software, the average per-seat charge for engagement technology ranges from $1 to free in return for the markups paid for gifts and rewards.
Without the ability to demonstrate a compelling, tangible return on investment, it’s hard to convince companies to make a serious financial commitment.
Imagine how many US companies have multiple engagement platforms for sales or non-sales employees, customers, distribution and supply chain partners, community members...Most require from time-to-time similar content or other engagement features, and most companies want all stakeholders to receive a consistent branding message, whether they are external or internal to the organization; yet, many companies have multiple platforms for different types of stakeholders.
It took time, but the demand for customer and employee relationship management and human resources information systems eventually created true unicorn-level marketplaces. That simply has never happened in the engagement space.
Our market analysis identifies only six enterprise engagement technologies listed in general order of size and scale, years in business, capabilities, and distribution models that meet the criteria of an enterprise engagement technology configurable to support the needs of all stakeholder groups on a single platform and include the key tactics of engagement, communications, voice, learning, rewards, etc.
These companies are in the best position to profit from positioning themselves as enterprise engagement technologies and developing a reseller distribution channel that goes beyond promotional products distributors to include marketing services and human capital advisory firms. For investors or companies looking for technology offerings with a business model similar to those that have scaled in other categories, these are the only options we know of.
Enterprise Engagement Technology Companies
It appears that not a single company of those listed below has strategically embraced achieving a Salesforce-level role in the enterprise engagement technology space. Is that because everyone believes there is more value being created by rewards and recognition platforms than in harmonizing the interests of all stakeholders toward organizational purpose, goals, objectives, and values at the strategic or tactical level?
Below is an overview of the companies with technologies that supply configurable enterprise engagement technology based their latest position statements on their web sites, and the degree to which they have demonstrated the ability to deploy a Salesforce-type distribution model.
Despite their enterprise capabiities, all focus on the sale of incentives, rewards, and recognition to engage sales and non-sales employees, customers, distribution and supply chain partners, etc. In terms of front-end program management features, all listed below advertise the ability to engage sales and non-sales employees, distribution partners, and customers, with features including surveys and feedback, communications, recognition, social walls, wellness, loyalty, referral, analytics, and related capabilities; yet, none tie these features into a cohesive story about streamlining and harmonizing engagement tech or demonstrating performance impact that addresses CEO and board priorities.
CarltonOne: The World's Most Powerful Engagement and Ecommerce Platform
“We help the world reward exceptional people, with an engagement platform that creates recognition, loyalty, sales and channel incentive programs... all powered by an ecommerce store with millions of rewards in 196 countries.” The company actively solicits reseller partners on its web site and promotes a robust partner support platform.
Overview. The company was recently purchased by Goldman Sachs Assets and under the new management of CEO Blair Cameron. The traditional focus of the company is partnering with large incentive, recognition and related agencies worldwide to provide front-end program management, back-end reward fulfillment or both to high volume resellers. It is the closest approximation of the Salesforce model in the engagement space, but the company does not appear to actively market itself that way.
Potential. This is the company best positioned to become the Salesforce of engagement. It has the financing, a robust technology infrastructure, and an active learning platform to support resellers.
Partners for Incentives. “America’s Premier Dedicated Third-Party Incentive Merchandise Fulfillment and Program Administration Resource....Complete Online Incentive Program Management.” The company’s web site understates the breadth of the solution it provides sold exclusively through reseller partners.Overview. Privately owned, with over 70 years in the business, it developed the first online technologies in the late 1990s and has low-cost, highly configurable applications for almost any type of engagement requirement. It sells exclusively through resellers backed by five full-time program sales and support managers each with years of experience. It offers them complete turnkey support services as well as marketing materials.
Potential. With perhaps the largest distribution channel of any of these companies with reportedly up to 1,500 active partners, its established distributor support team of five veteran employees, the company has high potential in this space.
Hinda. Engaging the People Most Important to Your Business
“Create an engagement program that customers and employees love. When you recognize and reward them, you create a sustainable competitive advantage. Engage, inspire, and reward the people who matter.” The incentive and recognition company actively solicits distribution partners on its web site and provides extensive resources for support.
Overview. A Chicago-based division of Engage2Excel, a private equity-owned recognition firm, Hinda is also well-positioned to become an enterprise engagement technology contender in that it has a suite of low-cost engagement technologies for most stakeholder and tactical applications and a robust information support platform for resellers. It appears to have an active reseller network in place as well.
Potential. This firm has high potential as well.
Online-Rewards: “We’re a Global Rewards Agency Focused on Connecting Organizations of All Kinds with the Reward and Incentive Software Solutions That Meet Their Unique Needs.”Overview. Part of a privately own group that also includes WorkProud.com, a recognition firm, and CatalogApi.com, which powers real-time catalog feeds of merchandise, gift cards and other rewards around the world, the company provides a full suite of engagement technologies and features but does not appear to have a clear reseller strategy at this time.
Potential. With a complete suite of low-cost front configurable platforms and a nearly worldwide redemption platform, the company has potential to be a market leader in enterprise engagement but also does not position itself that way.
Incentco: Recognize, Reward, Retain“Our mission is to transform the landscape of customer and employee engagement by providing a comprehensive, budget-friendly platform that seamlessly integrates rewards, recognition, and communication.”
Overview. Privately owned, the company appears focused on its real-estate niche and its new Fasteezy referral platform. It does not have a reseller strategy and has not embraced the enterprise-engagement story.
Xoxoday. Engage, Reward, and Retain Your Most Valuable People“Implement global reward and loyalty programs across employees, customers, and channel. Building the future of loyalty and rewards. We’re empowering thousands of businesses across the globe with our end-to-end suite of products to make loyalty, engagement, incentives, and rewards, seamless and exciting.” The solicits partners on its site.
Overview. This private-equity funded, India-based company with worldwide customers appears to have the technology but has not embraced the enterprise story. It has representation in the US but has not yet demonstrated the potential to have much impact here.
Potential. It appears to have the technology in place. It is unclear whether the company has the resources and patience to make a significant impact in the US.
Enterprise Engagement Alliance Services
Celebrating our 15th year, the Enterprise Engagement Alliance helps organizations enhance performance through:
1. Information and marketing opportunities on stakeholder management and total rewards:
ESM Weekly on stakeholder management since 2009; click here for a media kit.
RRN Weekly on total rewards since 1996; click here for a EEA YouTube channel on enterprise engagement, human capital, and total rewards insights and how-to information since 2020.
2. Learning: Purpose Leadership and Stakeholder
Management Academy to enhance future equity value and performance for your organization.3. Books on implementation: Enterprise Engagement for CEOs and Enterprise Engagement: The Roadmap.
4. Advisory services and research: Strategic guidance, learning and certification on stakeholder management, measurement, metrics, and corporate sustainability reporting.
5. Permission-based targeted business development to identify and build relationships with the people most likely to buy.
6. Public speaking and meeting facilitation on stakeholder management. The world’s leading speakers on all aspects of stakeholder management across the enterprise.
