April 11, 2016

KUBRA CEO Rick Watkin Discusses Innovations, Investments & Partnering With Hearst

BY ABIGAIL ALDERMAN, HEARST Published on 04.11.16

In September 2014, Hearst Magazines acquired 80 percent of KUBRA, a leading provider of digital bill delivery and payment services. KUBRA is changing the way people interact with their gas, water, waste and electric companies by making payment and outage information available at customers’ fingertips, in real time. KUBRA President and CEO Rick Watkin shares more about KUBRA’s evolution in customer experiences and its recent acquisition of iFactor.

Rick Watkin is the CEO of KUBRA.

Tell me about KUBRA’s history. How did you get started?

Rick Watkin: The nucleus of the idea came from the founder of the business, Tim Conroy. He was selling large printers and inserters, and he realized that they weren’t being used to their full extent. He purchased several machines for himself and began renting them to multiple groups of people, thus maximizing their full capacity. As the business evolved, it took on a much broader view. In addition to printing and mailing invoices and bills, KUBRA began managing financial information by taking a closer look at the data in those invoices. This was 25 years ago, before the Internet became part of our culture. From there, KUBRA developed software and applications to support electronic experiences: electronic delivery of financial information, payments, inbound/outbound voice calls, text messages, emails and alerts. KUBRA became a ubiquitous interaction network between its clients and their customers. Since our inception, we have always looked at delivering the right interaction to the right person at the right time, every time. That was the foundation we built upon. I was the eighth employee, and now, with over 500 employees, our purpose remains the same.

Can you talk about how KUBRA has evolved over the years?

Watkin: In the early ‘90s, much of KUBRA’s focus remained on printing communications. Utility companies, such as gas, electric and water suppliers, were printing so many customer communications that they needed to outsource the process to our team. All of the materials and branding still came from the utility company, because the end customer already had a sense of trust with that source. KUBRA was the unknown piece powering all the interactions—we were like the Intel inside. KUBRA has always recognized the critical importance of data. We processed and managed the data we received from the customers and built a content management system that allowed for the universal delivery of communications. The majority of our revenues and interactions, which we now call “experiences,” are contracted directly with businesses. However, a large portion of our research and development is allocated toward our consumer-branded applications. As the Internet evolved, KUBRA started leveraging it by building websites and mobile applications. By working with banks and search engines, we were able to open up a whole different spectrum of opportunities for our business clients—the large gas, electric, government and insurance companies—and also for the consumers of our applications.

KUBRA’s cloud-based interactive platform.

We recognize that consumers all have very different behaviors on the Internet. We focus on making sure that the experiences we provide are delivered as agnostically as possible. For the most part, we still are behind the scenes, but in the last several years, we’ve started building our own consumer brand called KUBRA EZ-PAY™. The product, which now serves millions of customers, acts like a digital wallet, allowing customers to view, analyze, dispute and pay the majority of their household bills on a single app.

Tell me about the recent iFactor acquisition. What does the company do and how are you expecting it to help enhance the KUBRA business?

Watkin: iFactor develops software products and delivers complete communication solutions for the utility sector, delivering information to more than 150 million people in North America through deployments at more than 45 utility companies. The company takes data directly from the grid, whether it’s a street light outage, or a gas or electric outage in the home, and proactively informs the customer about the situation and estimated restoration time. The alerts drastically reduce customer calls into the utility call centers, lowering costs and keeping customers happy. We saw many ways that iFactor’s technology could complement what we are already doing with data at KUBRA. We’re consistently adding analytics to our data warehouse, and we knew it would be game-changing to alert customers with this information.

With the acquisition of iFactor, KUBRA will accelerate the formation of the most advanced Customer Experience (CX) Management solution portfolio in the marketplace. Our combined client base will exceed 500 companies across a diverse range of industries, affording KUBRA unparalleled economies of scale and market share. There isn’t another business in the competitive landscape offering both billing and payment services, and grid reliability services. Over time, we will continue to add more analytics to this platform. It’s an incredible acquisition for us, and we’re very excited to see what else we can do together. With iFactor, we have acquired incredibly competent engineers, mobile developers and software architects that add unbelievable depth to our highly regarded KUBRA team.

Tell me about the landscape of the industry you operate in. Who are your competitors and what differentiates KUBRA from them?

Watkin: We don’t really have any one competitor—I think that’s one of our major differentiators. Because we influence so many different services, the landscape is quite broad. There isn’t one competitor that supplies everything we offer. Some of our competitors need to partner with other companies to offer the entire suite of services. In the payment arena, we compete with money transmitters and financial institutions. When it comes to traditional outsource processing, we compete with very large payment and data processing companies, from payroll, accounts receivable/payable, call centers services, card and cash collections, etc. We operate and build software and services in a very large customer interaction ecosystem. We have universal integrations with bank websites, credit card processing platforms and physical cash applications to allow for a variety of payment functionality. We made the investment early on to offer digital experiences to our clients, recognizing their customers’ desire for electronic commerce. We provide the transitional bridge as people change their behaviors. Our clients love that they only need to manage one strategic partnership, not a variety of different vendors all cobbled together. All of our technology is proprietarily built, which allows us to operate independently. Because of that independence and commitment to a company-agnostic platform, we’ve been able to stay ahead of the curve as new channels emerge. Wherever consumers are looking to go, we can serve them and provide intelligent and meaningful experiences.

How important is mobile to your business?

Watkin: Mobile is the fastest-growing channel for KUBRA. We’re seeing interest in digital customer interaction management increase exponentially, and we’re experiencing actively engaged customers. More and more, people are leveraging their smartphones and mobile applications in all facets of their lives. Together, iFactor and KUBRA have built award-winning applications in mobile and native apps. It’s a very important channel for us and one that we continue to watch. By 2024, 70 percent of the workforce will be millennials. That’s a significant statistic for us and we’re actively following that demographic’s interests and preferred channels. Many of our current development efforts are going to the mobile channel. The experience on a mobile phone is very different than the one on a big monitor or laptop, and experiences across devices can be disparate as well. We’re working hard to make sure everything is consistent across iOS, Android and Windows.

Many of KUBRA’s current development efforts are going to the mobile channel.

It’s been about a year-and-a-half since Hearst acquired 80 percent of KUBRA. How has the relationship and partnership benefited KUBRA and how are the synergies within the company allowing for future collaboration?

Watkin: The partnership with Hearst has been an incredibly valuable experience for us. As we continue to scale, we are focusing on a few key business areas where Hearst’s insight has been invaluable. One element is the financial rigor needed in order to make acquisitions and investments. The M&A advice and resources that Hearst has provided has already led us to make one acquisition, and we are looking at several more. The strength of the Hearst team—across technology, finance, legal and M&A—has been incredibly effective. They’ve helped to build leadership within our organization by inviting us to events that allow us to explore a variety of leadership experiences from adjacent industries and high-level meetings where we shared knowledge, explored macro trends and discussed problem solving. We are now spending more time managing on the business as opposed to being in the business—this allows us to look at things more broadly. The Hearst brand itself has also opened doors to opportunities that we never could have explored without our partnership. We are fortunate to have many Hearst executives at the KUBRA board level, allowing for long-term strategic planning and direction to take shape.

What’s next for KUBRA?

Watkin: Our main focal point at the moment is embedding more intelligence into the data so we can deliver a more meaningful experiences to everyone within our network. We process billions of interactions each year, and our goal is to be proactive with all our customer experiences, while reducing our clients’ costs of supporting their customers. Our investment in the analytics space will continue; we want to better understand consumers’ behaviors online, offline and across platforms. We are also processing data from other sources that allows consumers to cost-effectively manage all services provided in the home. This year, we’ll also be looking at other acquisitions that can help bring automation to home services. We want to be actively engaged with any form of technology that can help facilitate people’s communications with their services companies. We envision one technology platform that aggregates everything, from electricity, water and waste management to video streaming and home financing—developed and managed by KUBRA.

The original article may be accessed on the Hearst website here.