I’d like to say it’s going to be a good year in CRM and I firmly believe it, though I can’t offer a single all encompassing reason for my optimism though there are plenty of small things that begin to add up. In an earlier time the metaphor might have been “straws in the wind.” So what are they?
First, the economy is looking better but that’s faint praise. Things are not as bad as they were a few years ago, for instance the economy is adding in the neighborhood of 200,000 jobs monthly but I read an article the other day that said at this pace it will be another five years before we’re back to the employment level before the crash — in part because we need to absorb all the people who are entering the workforce. But as I like to say, black ink is better than red no matter how little there is.
More concretely, in our financialized economy, the markets are healthy and the broad CRM industry is doing its part to pump out new public companies. While all of them can’t be Salesforce caliber there have been many recent IPOs and the new year looks to have a few more teed up. That at least shows us that companies are evolving as they should and finding markets for their wares.
As usual, companies that are expanding the margin of our markets are the ones to keep an eye on. While I have seen my share of emerging CRM companies as an analyst and a judge in CRM Idol, the ones that are most interesting are those at the margins while the companies that try to reinvent the wheel don’t usually capture the imagination. Companies that I am watching for the year ahead include Xactly, InsideView, TreeHouse Interactive, Scout Analytics, Full Circle CRM, Lattice-Engines, HubSpot, Apttus, and Zuora. My good friend Paul Greenberg will publish a list of a bazillion companies he likes in his watch list. This is not intended to be all inclusive, just a smattering of companies I am well acquainted with.
All of these companies are expanding the margin of the market, expanding our horizons, and while only a few will have an IPO this year, the rest are worth keeping tabs on for sure. IPO candidates in my humble opinion include Xactly, Zuora, Apttus, and InsideView. Interestingly, none of these companies is what you would call a social company, which shows that there are more margins than just social. However, each is squarely positioned as a SaaS value proposition and that says the cloud is a live and well.
Xactly is reinventing compensation management, not just for sales where it got started but in every department of the enterprise. Zuora is making the subscription model mainstream by making accounting and finance in this new world easy. Apttus is a double or triple threat offering configuration, pricing, and quotation technology but they also have invented a way to be into and using Microsoft Office applications in conjunction with SaaS products like Salesforce. The result is a new kind of uber app. Lastly InsideView started as a sales intelligence tool but is expanding its footprint to provide sales and marketing teams with the data and insights they need to pursue opportunities.
I am warming up to TreeHouse because they have an interesting product line including partner relationship management (PRM) and marketing automation. PRM is one of those things that has come and gone more than once over the last twenty years, always with different players. I think this time might be significant as increasing numbers of vendors seek quality partner channels as a means of streamlining their operating costs.
If there’s a theme for the last group — Scout Analytics, Full Circle CRM, Lattice-Engines, HubSpot — I’d say it’s analytics. You might not think of HubSpot as an analytics company, and I don’t think they are one. But analytics is a part off what they do when they provide inbound marketing solutions. Inbound, done right, can be a big boon to business.
The other three offer mainstream analysis, if not analytics. Full Circle focuses on marketing management which I have written about many times because I think the idea of understanding the data and the metadata of marketing programs can do much to make you look smart if you’re a marketer. Lattice loves to crunch data about marketing and the sales process and they do it well. I don’t know any sales manager who doesn’t want better knowledge about all of the processes his or her team is involved in and Lattice is one way to get it.
Lastly, Scout has more mainstream analytics but for subscription companies and they make a good partner for Zuora. Subscriptions generate mountains of customer use data that can be used to predict everything dear to a subscription company’s balance sheet — I mean heart. With Scout’s analysis of use data, companies can spot revenue opportunities as well as danger signs like potential churn. Any way you slice it, this makes knowledge and that translates into market power.
So that’s some of what I am looking at as we start the year. I think it will be a year of base hits with an occasional sprinkling of home runs. Many, though not all, of the companies in this article have raised significant cash over the last year indicating both that the VC markets believe in their stories. But this also means clocks are ticking, investors want to see some returns and IPOs or private sales are on deck. Either way this makes for an entertaining start to the year.
It’s been wonderful this spring being a part of all the vendor briefings now in high gear because in short but sometimes painfully dense bursts we get to know what each vendor has in store for the months ahead. It’s a lot and that’s a good sign. There seems to be a breakout happening.
One of the themes running through all the events like a kid on a tricycle is marketing. Everywhere you look marketing is making noise. Oracle completed the acquisition of Eloqua, Marketo filed for an IPO, Salesforce is putting significant resources behind its Marketing Cloud and, most importantly, marketers are in the ascent.
SiriusDecisions, an analyst firm, is holding a conclave this week in which it is discussing its new marketing waterfall methodology and marketers as well as associated vendors like Lattice-Engines and Full Circle CRM, just to pick two, are sending contingents to the event to see and be seen and to soak up the new marketing vibe.
Closer to home, I am attending HubSpot’s second (?) annual analyst day at its Cambridge offices. HubSpot became an early darling of the new marketing movement a few years ago when it turned marketing on its head and said, no, no, no, try this — which turned into inbound marketing — and was very successful.
Generally, when marketing kicks it up a notch, as it is doing now, there are a couple economic possibilities. Either we’re entering a new market/category/paradigm or the economy is showing signs of life after a recession and I think it’s possible both are happening right now. The recession is slowly ending and marketing as a discipline is the new paradigm.
In fact, and this is most interesting, the marketing upsurge started at the depths of the recession when austerity was big news and almost nothing was getting traction. But it was almost as if the crowd said no, we don’t buy it, let’s get the economy moving again. Let’s go on offense, let’s start marketing and selling again and we’ll spend some money to make it happen.
Here’s where economics imitates life — a couple of weeks ago, the economic ideas underpinning the austerity argument, which has devastated Europe and made the sequester in DC a bad word, fell apart. Two Harvard economists named Reinhart and Rogoff whose work had led the austerity charge were proved to have made significant spreadsheet errors. If there was an Oopsie Award they’d win it this year for sure.
The translation is that the Austerians (as Paul Krugman likes to call them) got it wrong. The math errors and erroneous assumptions of the Reinhart-Rogoff model were inaccurate and the data did not support their conclusions. Over night austerity is, if not stinking like a dead fish, at least sitting in the sun and beginning to decompose.
What’s interesting to me is that the general marketplace began reacting long before the fall of the Reinhart-Rogoff model. No one needed to be hit over the head with an old tire tool to change directions. We’re anything but doctrinaire in this country and when something doesn’t work we make little adjustments, regardless of what officials and supposedly smart people tell us.
That’s the beauty of our free market system. It’s distributed and as non-hierarchical as you can get it and it works beautifully in a pinch. In my own mind, I often compare democratic capitalism practices in the West with totalitarian capitalism practiced across the Pacific.
The Chinese have a great ability to marshal their people and resources to output great quantities of goods but they still operate in a hierarchical, command and control manner. Democracy and totalitarianism are political systems just as capitalism is an economic one. Politics and economics have to operate together, you need one of each.
I could never fathom how totalitarian capitalism could orchestrate the changes I’ve seen this spring. The very idea of individuals deciding for themselves what to do in a confusing market with a totalitarian political system — even with free market capitalism as the economic model — and breaking away from official thinking is hard to imagine.
To me that’s part of what CRM captures. It’s the chaotic and the spontaneous that CRM tries to ride herd on. Sometimes it works well and at other times it can fail. But CRM has made important leaps forward. Like economics and sociology or any of the soft sciences, it has come into its own as it has adopted many of the tools of soft science — the bell curve, crowd sourcing, big data and analysis, and, most of all, probability. There’s just no way a political-economic system other than what we have in the West could come to the same conclusion. It would be like asking a fish to invent fire.
Bulldog Solutions Blends SiriusDecisions’ Waterfall Method with Full Circle’s Performance Management for New Paradigm in Marketing Management
One of the great unsung themes running through marketing today is organization, which says a lot about how far marketing has come in the Internet Age. Not long ago, organization was less critical because virtually all leads were the same. They were low quality and generated from broadcast methods like advertising and direct mail, which meant that they required much more effort to convert into something useful in sales.
But a lead that comes from a business card collected at a trade show is potentially different. So is a registration on a website that provided a piece of thought leadership to the prospect in exchange for the data provided on a form. These leads should take less time to make sales ready and have a higher chance of closing on average. So why would a marketing organization comingle these leads with those that came from a lower productivity campaign?
They shouldn’t. When comingling occurs it becomes hard or even impossible to determine which marketing campaigns provide the biggest bang for the buck. That’s the essence of SiriusDecisions’ new and improved marketing waterfall methodology. Now, I am not an expert in the method nor do I work for Sirius, but intuitively it makes a great deal of sense to do that kind of organizing.
Keeping birds of a feather leads conceptually segregated makes it much easier to do meaningful things with them. For instance, you wouldn’t send the same introductory content to a prospect that has a defined need, budget and timeframe that you would send to someone just looking for information. Rather than that, you’d fast track that lead and ensure that every time you touch it you add value. And that takes organization.
If you organize your marketing pipeline into distinct tracts, or as SiriusDecisions would say, waterfalls, you will be better able to apply consistent policies and procedures. You will also be able to determine to a higher degree of certainty, which programs work best in particular situations.
Bruce Brien is senior vice president of client success for Bulldog Solutions, a business-to-business demand generation agency for enterprise businesses in high tech, financial services and insurance, and he knows quite a bit about marketing, demand and organization. Bulldog has been using Full Circle CRM since December of 2012 and with a full quarter of data and experience he has a good perspective on the Sirius waterfall methodology and Full Circle CRM. I caught up with him the other day to see how things are going.
Brien is level headed and logical about everything and while he rarely uses the word “organization” that’s pretty much what he means when he says things like, “Full Circle is not a magic bullet, you have to decide to fix your processes first.” Fixing processes means making sure your data is clean and that you have data governance rules in place and follow them. In a word, organized.
If you are an old school marketer this might surprise you but the point is clear, if your database includes opportunities without contacts or it has multiple duplicate entries, then you will need to de-duplicate and update your data before you can reasonably expect to have success with either the waterfall or Full Circle. While you are at it institute some data governance rules to prevent this sort of thing from happening again. You will also need some buy-in from sales about what a lead really is and about how the SFA system needs to relate to marketing for the simple reason that many SFA systems don’t offer data governance so people must. That’s organization again.
With organization, Brien has discovered he can learn a lot using Full Circle. For instance, Bulldog now measures four separate waterfalls for each of its key lead sources — one for marketing, one for sales, one for telesales, and even one for existing customers making repeat purchases. Each waterfall has a cascade of well-defined events and rules that stipulate how and when a lead matures along its path to a sale.
The rules and data governance are all part of more organization. In this case, they represent agreements within marketing and between marketing and sales, concerning what a lead is and what should be done at each step in a phase. Full Circle CRM comes into play here because its analysis can tell the user how things are proceeding at each part of the waterfall. Full Circle CRM helps managers to understand what specific results accrue to each process and how well matched results are to the type of lead in each phase.
In prior marketing approaches, where the leads were less organized it would have been harder or even impossible to figure out if a particular program was working or what its returns were because the programs were operating over a heterogeneous group of leads. But with the Waterfall method to organize marketing flow and Full Circle to do the attribution, it’s easy for Brien to see what’s working and what’s not.
Full Circle’s greater ability to attribute results to specific inputs, “Just gives you the information you need to make adjustments,” according to Brien. Early in the life of a Full Circle implementation, those adjustments might come frequently but over time the pace should slow as you might expect in any fine tuning situation.
You should also expect that the cadence of change would depend on your sales cycle. Enterprise sales cycles that can take six to twelve months are slower than sales of more tactical goods and services and so the rate of change would be different. But no matter how you slice it, the days of quick and sometimes dirty marketing are behind us. What’s here now is a demand for greater accuracy and precision and that takes greater organization.