The easy money of the tech boom has made a lot of investors skeptical of investing in anything having to do with Silicon Valley.

It was an era of “venture capital gone mad,” as the money guys just kept pouring cash into businesses that only had hopes and dreams — no real products, and certainly no real profits. Consequently, it was no real surprise when the dominoes began tumbling.

Not suprisingly, in the wake of the tech wreck, many investors have given up on high-tech stocks, too afraid to jump back in. But if you count yourself in that crowd, I suggest you reconsider.

There are plenty of good companies that managed to survive the tech bust. Chief among them is Chordiant Software, Inc. (CHRD).

Chordiant is a company that  helps large businesses provide good customer service and, in turn, increase their bottom line.

Chordiant in the Business of Providing Seamless Customer Interactions

Have you ever had the annoyance of calling a bank or credit card company and being asked, repeatedly, for your phone number or account number, by various electronic voices (before you get to a real person) and then again by an assortment of real people?

The problem lies with the way a company’s computer system is set up, where each department (or voice mail prompt) is looking at a separate screen and doesn’t have access to the same information. Consequently, every time you make a new selection or speak with a different person, they have no clue that you have just given that very same information to the last automated voice or person.

Chordiant’s software solves that problem by allowing businesses to integrate each customer service screen.

Here’s an example you may be familiar with: When you call to activate a new credit card, you first punch in a bunch of numbers (like your credit card number or telephone number) in response to a prompt. Then, if your bank is trying to sell you something new that day, you are transferred to a real person who pulls up on his computer the products you currently have and the ones you may be interested in. Now, you may or may not like the sales pitch, but the fact is that they work and are profitable for companies that do them well.

However, most places don’t do them well. The real person you eventually chat with doesn’t have that credit card number you’ve already put into your phone, and they probably don’t have knowledge of all of the products you may have with the bank outside of your credit cards, like trust accounts, car loans or your depository accounts. So they are really at a disadvantage to try to help you or bring new products to your attention.

With Chordiant’s software, the customer service rep has broader access to the depth and breadth of the business you are doing with the company. The software allows the computer to pick and choose, pulling in information when it is needed for a particular transaction. That way, they can much more effectively up-sell or cross-sell you additional products as the opportunities arise.

An important advantage of Chordiant’s product is its flexibility. By sending the information where it’s needed, Chordiant’s customers don’t have to build numerous databases for each separate department, many of which would contain a lot of the same information. This is a huge cost-savings for companies, because multiple databases are exorbitantly expensive to build and maintain.

One of the software’s popular uses has been when two companies merge. After the merger, the software can be put right on top of both companies’ databases without trying to sort out which part of which database to keep.

Chordiant’s software helps businesses not only increase sales, but it also gives them the ability to retain more customers. This is extremely important to a company’s bottom line. Statistics show that acquiring a new customer is up to ten times more expensive than keeping one you already have. According to Chordiant’s research, reducing customer defections by just 5% can increase a company’s profits by up to 80%. That’s what I call paying off.

Chordiant Is a Leader in the Field

The company’s mantra is simple: The opportunities for meaningful customer interaction are rare, so maximize them. That’s exactly how Chordiant has become #1 in its field, gobbling up market share since its founding in 1985.

The company’s customers are primarily in the financial, healthcare and telecom industries, using its software for call centers, customer service, marketing campaigns, lead collection, credit card disputes, financial transactions, teller services, risk mitigation, fraud prevention and lending.

Because its software is geared to handle complicated, back-end transactions, the company’s customers are major blue-chip businesses that generate incredibly large volumes of customer interactions. It’s no surprise, then, that Chordiant counts among its clients one-half of the world’s top 20 banks, 10 of the top 40 global telecoms and half of the top 10 global insurers. The list includes MetLife, Lloyds TSB, UPS, USAA, Capital One, Time Warner and JP Morgan Chase.

Also impressive, the company has little debt, lots of cash and a gross margin that is more than three times its competition.

Chordiant has created an exciting niche for itself and is ready to leap ahead, as technology spending ramps up with an economic recovery. Chordiant is an excellent buy.

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