Five9 Award Write Up

2016 North American
Cloud Contact Center
Customer Value Leadership Award
2016

BEST PRACTICES RESEARCH
© Frost & Sullivan 2016 2 “We Accelerate Growth”
Contents
Background and Company Performance ........................................................................3
Industry Challenges..............................................................................................3
Customer Impact and Business Impact ...................................................................3
Conclusion...........................................................................................................7
Significance of Customer Value Leadership ....................................................................8
Understanding Customer Value Leadership ....................................................................8
Key Benchmarking Criteria ....................................................................................9
Best Practice Award Analysis for Five9 ..........................................................................9
Decision Support Scorecard ...................................................................................9
Customer Impact ...............................................................................................10
Business Impact.................................................................................................10
Decision Support Matrix ......................................................................................11
The Intersection between 360-Degree Research and Best Practices Awards.....................12
Research Methodology ........................................................................................12
Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best
Practices .................................................................................................................13
About Frost & Sullivan ..............................................................................................14

Background and Company Performance
Industry Challenges
Cloud contact center providers are enjoying an upswing in interest and adoption in North
America. The uncertainties that dampened adoption of cloud applications five years ago,
including concerns over reliability, scalability, and security, have mostly dissipated, and
cloud adoption is now at an all-time high.
But with new opportunity comes various challenges, particularly with so many contact
center providers as well as enterprises jumping on the cloud bandwagon. New market
entrants have emerged; while existing cloud participants have added contact center
functionality organically and through partnerships or acquisitions and legacy contact
center systems providers now offer cloud-based versions of existing solutions.
The primary challenge for any provider in this space is to differentiate themselves, proving
real business value now and in the future. This entails excelling at core competencies in
the contact center, while enriching applications to address ongoing challenges that impact
customer service delivery. Cloud providers must help improve agent productivity and
empowerment, increase employee satisfaction and engagement, reduce agent churn,
increase satisfaction, and enhance the Customer Experience.
Customer Impact and Business Impact
Criterion 1: Customer Purchase Experience
With over fifteen years of cloud experience, Five9 is one of the leading providers of cloud
contact center software. Five9 was founded in 2001, introducing its Virtual Contact Center
(VCC) platform in 2003. This early entry into the cloud market has given it a breadth of
experience that many in the industry have tried to match, particularly legacy contact
center systems providers that have only recently introduced cloud versions of their
original products.
Being an early entrant has allowed Five9 to build expertise in cloud application delivery, as
well as innovate faster than most cloud contact center players. The VCC platform provides
a wide breadth of applications, including many features and applications others are just
starting to deploy. For example, it has advanced capabilities such as proactive/predictive
chat functions, and visual support capabilities leveraging WebRTC, with full multimodality,
escalation/de-escalation, and channel blending, to name a few.
In 2015, to ensure that customers receive the most technologically advanced platform,
Five9 rolled out its Freedom Release, which was a complete refresh of its VCC platform.
Freedom is a modern microservices-based Web architecture that includes an HTML5
browser-based agent desktop, a rich REST API layer, and new CRM adapters called Plus
Adapters, which provide deep integration into a growing number of CRM applications.

All domains were upgraded to the Freedom Server Release in mid-2015. Five9 took into
account the needs of its customers by doing a phased roll-out of its Plus Applications. At
launch, the platform supported both legacy java client and the new agent Web user
interface so that customers could allow their agents to use whichever desktop they were
comfortable with, pacing upgrades and reducing agent churn and onboarding costs. Less
than a year into the launch Five9 has thousands of agents on the new desktop.
This type of care to ensure that customer needs are met is one of the hallmarks of the
purchasing experience for Five9 customers.
Criterion 2: Price/Performance Value
Five9 provides a wide range of contact center functionality for the North American and
global markets on an integrated and efficient platform. The VCC platform was built in-
house, from the ground up, and initially just provided support for outbound dialing, but
has since grown to support the full spectrum of contact center functionality including
inbound, outbound, and blended agent capability for in-house, outsourced, and work-at-
home agents and remote experts. The platform also delivers voice self-service (IVR),
WFM, QM, analytics, and social, mobile, email, chat, and Web interactions.
Five9’s offering prices include training, support, and additional value. The company
provides simplified pricing, and typically the basic product includes a set of features and
bundled plans with unlimited talk-time and monthly per-agent fees, but it is also possible
to charge for unbundled pricing.
Delivering from the cloud means that Five9 provides swifter deployment and faster time to
value, giving companies faster access to new product and feature developments. In
addition, it provides greater business agility, flexibility, scalability, and business
continuity/disaster recovery.
Criterion 3: Customer Ownership Experience
Customers have come to expect enhancements to existing capabilities as well as new
applications, often earlier than others in the market. For example, social media as a
customer contact channel gained real momentum around 2010, and contact center
participants began to toy with its use and partner with companies providing it. In 2013,
Five9 had the smarts to acquire one of the most innovative of the social media companies
at the time, when it acquired SoCoCare, a social media monitoring, analytics, and
response company.
One of the key pieces of the acquisition was a natural language processing (NLP) engine,
branded Five9Connect, which processes through all text-based interactions, to influence
routing decisions or provide insight to agents with context and other factors. Business
rules can then automatically route posts to the appropriate agent or agent group for

response. Responses also can be prioritized by author sentiment, social influence, and
customer value. The company now provides a stand-alone solution called Five9 SoCoCare,
as well as a version that is integrated into the VCC platform, called Five9 Social.
The Five9 social solutions were built from the ground up for contact centers, unlike some
other social media engagement platforms. These applications provide robust agent tools
that offer things like next-best actions based on rules and policy, and a panoramic
customer journey timeline giving agents a complete history of social, email, and chat
interactions with that customer.
Along these lines, in its most recent release, Five9 improved the capabilities of the agent
desktop, giving agents deep visibility into the customer journey, historically and in real-
time. For instance, it introduced a preview chat function that appears when business rules
indicate that a customer on the web is perhaps struggling. This pops up onto the agent
desktop information about the journey that the customer is on, from the pages they have
clicked to, to things like what they are looking at or putting into a shopping cart. It has
presence indicators that change if the customer leaves the website and goes to another
one as well. This tool enables the agent to see how the customer is progressing, along
with predictive scoring that shows if the journey is matching the desired business
outcome. This, along with next best action suggestions, allows the agent to intervene if
necessary, and engage with that customer for help, or click a withdraw button if it appears
that the customer is progressing well on their own. The agent has access to all prior
interaction journey maps as well. This type of innovative agent capability was unheard of
a decade ago.
Criterion 4: Customer Service Experience
Five9 has more than doubled its investment in Professional Services in the last 18 months,
adding skilled and experienced program managers and engineers as well as specialized
contact center experts in the areas of CRM, network connectivity, workforce management,
and other key areas. The company’s professional services resources employ an
established consultative methodology, employing best practices to develop solutions for
each customer’s unique business requirements.
In addition to standard customer support, Five9 offers premium support with a dedicated
account manager. Although this includes an extra monthly fee, customers have been
investing heavily in this. In 2015, its North American customers had a 90% uptake rate
for this service. This premium support differentiates the company from others by ensuring
that it remains customer-centric and keeps the churn rate low.
Finally, in October, 2015, Five9 became one of the few contact center companies to
publish a Trust Site for visibility on reliability that allows anyone (not just customers) to
see its reliability statistics over the last twelve months (the average monthly availability
for the last year). Five9 customers can log in to get more detailed information, such as

notifications on the API layer, and access other metrics regarding their own operations.
Criterion 5: Financial Performance
Five9 is a publicly traded company (FIVN) with more than 700 employees, 2,000
customers globally, and fields approximately 3 billion interactions per year. Organic
revenue has grown rapidly over time, increasing at a 37% CAGR from 2009-2015. For the
2015 fiscal year, the company had a 25% year-over-year increase of revenue to $129
million, and a record fourth quarter for turn-ups. It now supports 55,329 concurrent agent
seats or 82,994 named seats, which is a 19% increase over the prior year.
Historically, Five9 has catered to the small- to mid-sized market. However, it entered the
enterprise space a few years back and is now supporting healthy growth in the enterprise
market as well, with 38% growth year-over-year in enterprise subscription revenue in
2015, which further accelerated to 39% for the last 12 months ended March 31, 2016.
Also, enterprise revenue represented 65% of total 2015 revenues and increased to 66%
for the last 12 months ended March 31, 2016, driving a strong annual dollar-based
retention rate of 98% through Q1 2016.
Moreover, Five9 continues to execute on its path to profitability, achieving two
consecutive quarters of positive adjusted EBITDA through Q1 2016 with breakeven
operating cash flow. This is primarily due to the enterprise business driving high marginal
profitability of 64% for the last twelve months, compared to an average of 10% for the
SaaS universe (Marginal profitability is measured as the percentage of revenue growth
that drops to the adjusted EBITDA line. The SaaS universe is comprised of 57 companies).
Criterion 6: Growth Potential
Five9 has an attractive offer in a growing market, and continues to enhance its solutions
based on anticipating and paying attention to evolving customer requirements. In its
latest summer release of its Freedom architecture, the company introduced attractive
enhancements to existing features/applications. These included enhancements to increase
omnichannel engagement, proactive and predictive engagement functionality including
predictive web analytics, and customer journey analytics including visual display of the
lifetime customer journey on the agent desktop. Five9 also added to or improved CRM
integrations, including those for Microsoft Skype for Business, Microsoft Dynamics and
Zendesk.

Conclusion
Contact Center stakeholders are looking for providers that offer a wide breadth of
customer care functionality, flexibly, reliability, and at competitive price points. They are
also looking for suppliers who can add features that keep pace with today’s rapidly
changing customer care needs. Five9 provides a reliable, scalable, feature-rich platform
and a continual stream of innovative solutions for its customers. It’s for these reasons and
others that Five9 has earned Frost & Sullivan’s 2016 Customer Value Leadership Award for
Cloud Contact Centers in North America.

Significance of Customer Value Leadership
Ultimately, growth in any organization depends upon customers purchasing from your
company, and then making the decision to return time and again. Delighting customers is
therefore the cornerstone of any successful growth strategy. To achieve these dual goals
(growth and customer delight), an organization must be best-in-class in three key areas:
understanding demand, nurturing the brand, and differentiating from the competition.
Understanding Customer Value Leadership
Customer Value Leadership is defined and measured by two macro-level categories:
customer impact and business impact. These two sides work together to make customers
feel valued, and confident in their products’ quality and long shelf life. This dual
satisfaction translates into repeat purchases and a high lifetime customer value.

Key Benchmarking Criteria
For the Customer Value Leadership Award, Frost & Sullivan analysts independently
evaluated two key factors—Customer Impact and Business Impact—according to the
criteria identified below.
Customer Impact
Criterion 5: Brand Equity
Business Impact
Criterion 2: Customer Acquisition
Criterion 3: Operational Efficiency
Criterion 5: Human Capital
Best Practice Award Analysis for Five9
Decision Support Scorecard
To support its evaluation of best practices across multiple business performance
categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool
allows our research and consulting teams to objectively analyze performance, according to
the key benchmarking criteria listed in the previous section, and to assign ratings on that
basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;
ratings guidelines are illustrated below.
RATINGS GUIDELINES
The Decision Support Scorecard is organized by Customer Impact and Business Impact
(i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each
criteria are provided beneath the scorecard). The research team confirms the veracity of
this weighted scorecard through sensitivity analysis, which confirms that small changes to
the ratings for a specific criterion do not lead to a significant change in the overall relative
rankings of the companies.

The results of this analysis are shown below. To remain unbiased and to protect the
interests of all organizations reviewed, we have chosen to refer to the other key players
as Competitor 2 and Competitor 3.
DECISION SUPPORT SCORECARD FOR CUSTOMER VALUE LEADERSHIP AWARD
Measurement of 1–10 (1 = poor; 10 = excellent)
Customer Value Leadership
Customer
Impact
Business
Impact
Average
Rating
Five9 9 9 9.00
Competitor 2 8 7 7.50
Competitor 3 7.5 7 7.25
Customer Impact
Requirement: Products or services offer the best value for the price, compared to similar
offerings in the market
Requirement: Customers feel like they are buying the most optimal solution that
addresses both their unique needs and their unique constraints
Requirement: Customers are proud to own the company’s product or service, and have a
positive experience throughout the life of the product or service
Requirement: Customer service is accessible, fast, stress-free, and of high quality
Criterion 5: Brand Equity
Requirement: Customers have a positive view of the brand and exhibit high brand loyalty
Business Impact
Requirement: Strong overall financial performance in terms of revenues, revenue growth,
operating margin and other key financial metrics
Criterion 2: Customer Acquisition
Requirement: Customer facing processes support the efficient and consistent acquisition of
new customers, even as it enhances retention of current customers
Criterion 3: Operational Efficiency
Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high
quality standard

Requirements: Customer focus strengthens brand, reinforces customer loyalty and
enhances growth potential
Criterion 5: Human Capital
Requirement: Company culture is characterized by a strong commitment to quality and
customers, which in turn enhances employee morale and retention
Decision Support Matrix
Once all companies have been evaluated according to the Decision Support Scorecard,
analysts can then position the candidates on the matrix shown below, enabling them to
visualize which companies are truly breakthrough and which ones are not yet operating at
best-in-class levels.
DECISION SUPPORT MATRIX FOR CUSTOMER VALUE LEADERSHIP AWARD
High
Low
Low High
BusinessImpact
Customer Impact
Five9
Competitor 2
Competitor 3

The Intersection between 360-Degree Research and Best
Practices Awards
Research Methodology
Frost & Sullivan’s 360-degree research
methodology represents the analytical
rigor of our research process. It offers a
360-degree-view of industry challenges,
trends, and issues by integrating all 7 of
Frost & Sullivan's research methodologies.
Too often, companies make important
growth decisions based on a narrow
understanding of their environment,
leading to errors of both omission and
commission. Successful growth strategies
are founded on a thorough understanding
of market, technical, economic, financial,
customer, best practices, and demographic
analyses. The integration of these research
disciplines into the 360-degree research
methodology provides an evaluation
platform for benchmarking industry players and for identifying those performing at best-
in-class levels.
360-DEGREE RESEARCH: SEEING ORDER IN
THE CHAOS

Best Practices Recognition: 10 Steps to Researching,
Identifying, and Recognizing Best Practices
Frost & Sullivan Awards follow a 10-step process to evaluate award candidates and assess
their fit with select best practice criteria. The reputation and integrity of the Awards are
based on close adherence to this process.
STEP OBJECTIVE KEY ACTIVITIES OUTPUT
1
Monitor,
target, and
screen
Identify award recipient
candidates from around the
globe
 Conduct in-depth industry
research
 Identify emerging sectors
 Scan multiple geographies
Pipeline of candidates who
potentially meet all best-
practice criteria
2
Perform
360-degree
research
Perform comprehensive,
360-degree research on all
candidates in the pipeline
 Interview thought leaders
and industry practitioners
 Assess candidates’ fit with
best-practice criteria
 Rank all candidates
Matrix positioning all
candidates’ performance
relative to one another
3
Invite
thought
leadership in
best
practices
Perform in-depth
examination of all candidates
 Confirm best-practice criteria
 Examine eligibility of all
candidates
 Identify any information gaps
Detailed profiles of all
ranked candidates
4
Initiate
research
director
review
Conduct an unbiased
evaluation of all candidate
profiles
 Brainstorm ranking options
 Invite multiple perspectives
on candidates’ performance
 Update candidate profiles
Final prioritization of all
eligible candidates and
companion best-practice
positioning paper
5
Assemble
panel of
industry
experts
Present findings to an expert
panel of industry thought
leaders
 Share findings
 Strengthen cases for
candidate eligibility
 Prioritize candidates
Refined list of prioritized
award candidates
6
Conduct
global
industry
review
Build consensus on award
candidates’ eligibility
 Hold global team meeting to
review all candidates
 Pressure-test fit with criteria
 Confirm inclusion of all
eligible candidates
Final list of eligible award
candidates, representing
success stories worldwide
7
Perform
quality check
Develop official award
consideration materials
 Perform final performance
benchmarking activities
 Write nominations
 Perform quality review
High-quality, accurate, and
creative presentation of
nominees’ successes
8
Reconnect
with panel of
industry
experts
Finalize the selection of the
best-practice award recipient
 Review analysis with panel
 Build consensus
 Select winner
Decision on which company
performs best against all
best-practice criteria
9
Communicate
recognition
Inform award recipient of
award recognition
 Present award to the CEO
 Inspire the organization for
continued success
 Celebrate the recipient’s
performance
Announcement of award
and plan for how recipient
can use the award to
enhance the brand
10
Take
strategic
action
Upon licensing, company
may share award news with
stakeholders and customers
 Coordinate media outreach
 Design a marketing plan
 Assess award’s role in future
strategic planning
Widespread awareness of
recipient’s award status
among investors, media
personnel, and employees

About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth
and achieve best in class positions in growth, innovation and leadership. The company's
Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined
research and best practice models to drive the generation, evaluation and implementation
of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in
partnering with Global 1000 companies, emerging businesses and the investment
community from 31 offices on six continents. To join our Growth Partnership, please visit
http://www.frost.com.

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