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Interview with Greg Heaps, Allegiance Technologies

Our interview this morning is with Greg Heaps, VP of Sales and Marketing for South Jordan, Utah-based Allegiance Technologies (www.allegiance.com). Allegiance develops web-based, hosted software for feedback management, and we thought we'd get some perspective into their business, and hear a little bit about the venture round the firm is raising.

Techrockies: Greg, thanks for the interview. Tell us what you offer to your customers, and what your company does?

Greg Heaps: We focus on the area being referred to as enterprise feedback management. Up until now, there have been a number of tools to help you gain an understanding of your customers and employees. Those tools could be focused on the employee only, or the customer only, or might be a survey system, or an anonymous ethics systems. We're bringing all of those together in a suite of tools, rolled up into an enterprise feedback management system. For the most part, we provide an open feedback channel that is open 24/7, is web hosted, and where a customer can come in at any time to provide a comment, suggestions, question, or even a compliant. That information is routed to the responsible person in an organization, who can act on it immediately, and address concerns in a timely manner. Statistics show that a customer taken care of quickly and satisfactorily is much more loyal than those that are not having issues at all. Loyalty can impact your bottom line to a great degree, and improving retention and loyalty of customers and employees ultimately impacts profits, growth, and lasting value.

We do that through an open feedback channel, taking an active approach with a survey system, to pinpoint and zero in on specific issues you are interested in as a management team. It's all rolled up into a management console, where your team can collect the data, analyze, and begin to act on it immediately, in order to make adjustments to your organization to improve your overall efforts and get better growth and revenue.

Techrockies: Who are the kinds of customers who use your product?

Greg Heaps: We have a variety of customers, across multiple industries. As a result of customers and employees being such a critical asset of an organization, it's fairly horizontal across all industries. What those organizations do have in common, is they all have an interest in retaining customers, and satisfying employees and keeping them on board. The verticals we are getting more traction on in others include those where the customer base has a low cost of transitioning to another provider--for example, banks, where a customer can easily take money out of the bank and take it down the street to another bank. So that's one vertical we're having lots of traction in--banking and finance. Another one is healthcare and hospitals, which are very interested in retaining patients and keeping them where they're coming back into facility for care. Those are probably the two main focuses for us. Users of our product include Zions Bank, First National Bank of Ft. Collins, and a number of other banks. In health care, our customers include customers like Robert Wood Johnson Hospital in New Jersey, which won the Malcolm Baldridge service award for quality in 2004. They attribute a portion of winning that award to our system, which enabled them to listen closely to customers and respond quickly.. Bronson Health Care Group, also a customer of ours, also won that award in 2005. Hillcrest Hospital, part of the Cleveland Clinics is also a customer of ours, and we have a variety of other hospital and health care customers. Other customers outside of those verticals include Dunkin Brands--they run Dunkin' Donuts and Baskin Robbins--as well as Overstock.com, Sportsmen's Warehouse, eFax, and lots of other different organizations.

Techrockies: Where'd the idea for Allegiance come from?

Greg Heaps: It kind of came from two angles. A Ph.D., Gary Rhoads of Brigham Young University, probably twenty years ago now, began a very deep research and investigation into customers and employees--understanding them, and how to get feedback from them. He then put together an engineering team, which he deployed to put together technology which could benefit from his twenty years of research and findings. That grew into our customer voice and employee voice technologies. Separately, Adam Edmunds founded a company called SilentWhistle, which was built around a whistle blower and hotline solution. They both ran into each other, and started seeing lots of requests for products. They saw the value of the two companies. In addition, the Allegiance team was very focused on the technology, and the SilentWhistle team was very focused on sales and marketing. We came together a year ago last month, and merged to create this enterprise feedback solution.

Techrockies: Tell us a little bit about your funding?

Greg Heaps: To date we are funded by private and angel investors. Both companies have taken rounds of funding before the merger, and we took a small round after the merger. Through organic growth, we are kind of crossing the line with cash flow positive. We're seeing the need to lever the company now, and have a real interest in more extreme growth, so right now we're talking with and pitching more formal investors and venture capital organizations. We're putting together great interest in a series A, and have been talking with many venture capitalists out on the west coast, Bay Area, as well as a number in the Salt Lake area.

Techrockies: How big is the firm now, in terms of people?

Greg Heaps: We're currently 15 employees, and have five open headcount. We're closing in on those positions, and should be up to twenty in the next sixty days. Part of the funding we are taking on will take the company the company in other directions, and we think that in the next six months we could be double our size.

Techrockies: Are most of your employees engineering, sales, or marketing?

Greg Heaps: I have been involved in a number of startups, and in the past have always been trying to get the product ready. Often, three fourths of the company was engineering, and there was one sales and marketing guy, and selling the dream. Here, we're in a state where we have product, being used by credible organizations. The majority of our staff is sales and marketing, and that's where we're building our team. One quarter of the company is engineering, and three quarters is sales and marketing and corporate operations. A lot of that is implementation team--we have a web-based, hosted system, and when an organization purchases our system, it's on an annual subscription model. We have an implementation team that helps set up the system for our customers, instead of using their internal IT team, so they can utilize and access the system. We also have a best practices team which gives time and attention to our customers to help them get the most out of the system, and utilize it to the best advantage.

Techrockies: Thanks!