Investments Bleed When You Cut Costs: Q&A With Tigerpaw CEO Dave Foxall

Tigerpaw Software is a family-owned software company that, 24 years after it was founded, is about to enter a new phase of growth. The company’s enterprise CRM, inventory and project management platform has always had a loyal following, in no small part because of the care and attention Tigerpaw lavishes on its customers, CEO Dave Foxall told CRM Buyer.

However, some strategic changes it made in its product lineup a few years ago — primarily the embrace of managed services — plus a strong customer desire to save money via automation are positioning Tigerpaw to double or triple its revenue in the next few years.

CRM Buyer spoke with Foxall to find out how the company expects to achieve this feat.

CRM Buyer: How is Tigerpaw weathering the economic downturn?

Really quite well. In fact, we are in a growth phase. Since the beginning of the year, we added 20 percent additional staff, and we are still profitable even though we increased our staff. As a software development company, we are building products that won’t be released until next year, so that is a lot of R&D overhead.

CRM Buyer: What are some of the cost-cutting measures you’ve taken?

We continue to look at the expense side of business as we always have. But we are a company that believes in investment — in our staff and in our clients. It always pays off in the end. We invest heavily in trade shows for example, but only if we can speak in front of the audience. We find we generate a lot of revenue that way.

Another example: We have saltwater aquariums. Now, getting rid of those would be an expected cost-cutting measure to take, but it would defeat our objective of providing a good work environment for employees. And certainly the last thing we would want to do is cut our staff. We would never do that. Our philosophy is that it is easy to cut costs — but just as easily, you start to bleed long-term investments.

CRM: How can your products help your customers’ bottom lines in the near term?

For our sales and marketing application, we have a campaign manager that can send emails and schedule follow-up calls. It literally does what a full-time marketing administrator will do for you. It will immediately generate revenue for you. Our software has the ability to finish a proposal while on the phone; that can increase sales. It can produce dynamic invoices on the fly; that too can increase sales. It can manage services dynamically; users will realize immediate savings by ordering what is needed by the project phase. Those are just a few examples.

CRM Buyer: What are some of the bright spots for your company right now?

We are ready to cross a new frontier. We have been in the (US)$5-$6 million range for the last couple years. I think we can grow to a $10-$15 million range within the next few years. We are building products that our customers want to purchase, and are having a lot of fun taking businessfrom our competitors.

CRM Buyer: How will your company look a year from now?

A year from now, we will probably have gained 5 to 8 percent of our competitors’ market. We will have added 15 to 20 percent of new staff in support, training and sales. We will probably be expanding our office space, for sure. Right now, we operate out of a space designed for 40 people.

CRM Buyer: Who are some of your main competitors?

In the CRM space, mainly Salesforce.com, Microsoft, NetSuite. In [professional services automation], it would be ConnectWise and Autotask.

CRM Buyer: You said you were poised for a significant growth spurt. Why now? What’s different?

In the past, we were short on products or functionality that would have allowed us to be more competitive — but now we have those and are surpassing our competitors. We have a lot more visibility now, so when we talk to people on the phone, they have heard of us. In the past, we got new customers through referrals. Now, it is word of mouth.

CRM Buyer: What were the missing areas?

In the managed services area, we focused on [sales force automation] and service contract management and didn’t interface with new products in the market. We weren’t heavily involved in managed services, which we are today. A few years ago, we redirected our efforts to focus on those sectors and built the necessary products.

CRM Buyer: Besides the internal changes you’ve implemented, what other factors may account for your growth?

Companies are looking to reduce their people overhead, so automated monitoring or automated scheduling is looking more attractive. In fact, I would say the current economy and managed services are at a good point in their marriage right now.