A couple of weeks ago, Marketo announced its research-based belief that its form of revenue performance management (RPM) could help grow global GDP by $2.5 trillion by 2015. I love it when emerging companies talk about big plans this way. It reminds me of the young plumber who upon seeing Niagara Falls for the first time says, “I think I can fix it!”
But there’s something to this proposal that ought to be taken seriously and when you talk about trillions of dollars you are presumably talking seriously. Global GDP in 2011 is predicted at $68.65 trillion by the International Monetary Fund and the Marketo announced figure was spread over three years. But that’s a lot of improvement no matter.
To put this into perspective you have to back up and ask about the assumptions involved and Marketo was kind enough to anticipate the questions and perform a little research. According to the announcement, Marketo did some analysis of its customers’ revenues as they took advantage of the company’s marketing automation, sales effectiveness and analytics tools.
Side note: No one’s crown jewels were harmed in the analysis. Having a big pile of relatively homogeneous data for analysis is a side benefit of multi-tenant cloud computing. Multi-tenant cloud computing could provide important analytic benefits like this to all users if we could only 1) Put down some ground rules governing the use of the aforementioned crown jewels, thus creating a data commons; and 2) Get over our hang-ups about maintaining the pristine nature of our data in clouds. Really, it’s like the five year-old who can’t stand seeing the peas touching the mashers on the plate. But I digress.
The three tools, marketing automation, sales effectiveness and analytics, combine to provide the tools a company needs to implement revenue performance management strategies. RPM is still a relatively new idea but other companies like Eloqua, with whom Marketo competes and Cloud 9 Analytics (a Marketo stable mate in venture capitalist Bruce Cleveland’s menagerie) are conspiring to give the idea critical mass.
In the nub, RPM is simply about using the data that is routinely given off by our business processes as fodder for the analytics engine. Too often the data goes unused or simple reporting engines choke on the abundance. But an analytics engine spits out all kinds of ideas like what to offer the customer based on its experience, or generally offering insight that a human eye might miss but which a statistical model would discover easily.
So, two and a half trillion bucks over three years averages out to a bit less than one percent a year. In percentage terms that is not much but the existence of all the zeros in a trillion will get your attention. After all, that’s growth and incremental improvements like this are how markets and economies grow.
More importantly, the ROI can be stunning. Given the fact that RPM would not be applied evenly across big corporations and lemonade stands, the places where it could make a difference would notice the change. Moreover, the cost of implementing RPM where it’s needed would be much less than the incremental gains, especially with modern cloud computing delivering the tools cost effectively.
I am not an expert on RPM, yet. I am more like the one eyed man in the land of the blind. But my thought is that we ought to get familiar with this idea, which is essentially applied analytics. Our economy is still climbing out of the recession and the jobs numbers that I have seen for May are disappointing. Every recession ends with some new product or idea taking off and leading the way. I haven’t seen the big new idea yet but maybe this is it. Regardless, a little investigation won’t cost anything.
All the chatter about the Salesforce acquisition of Radian6 is quite interesting. A couple of postings from people I respect make good points. First Joe Payne, CEO of Eloqua:
“Conspicuously absent from Salesforce’s network of role-specific “Clouds” is one that centers on the marketing function. Is the Radian6 acquisition the beginning of a Salesforce Marketing Cloud? Someone on the investor conference call asked Marc Benioff whether this was the first move toward business-to-consumer. His answer was worth noting: ‘We’re really seeing the beginning here of the Marketing Cloud.’ Given the excitement we have seen around Revenue Performance Management – a discipline that requires both sales and marketing data – in the executive suite, it is not surprising to see Salesforce moving this direction.
And here’s Jon Miller CMO of Marketo:
“Personally, I think Salesforce will continue to make acquisitions “around” the marketing automation space (such as Jigsaw and Radian6) without moving directly into the category; I also would not be surprised if they bought an email service provider. Salesforce has never shown much interest in a “Marketing Cloud;” they seem more interested in Chatter, the Force.com Platform, and Service Cloud 3, and I suspect future acquisitions will focus on augmenting those capabilities more than in marketing.
It reminds me of the old joke, if you want three economic opinions ask two economists. We’ll need to wait a while to know which is right but I’m betting on Payne’s analysis more or less.
IMHO Salesforce has been deficient in marketing for a long time. Perhaps that’s because marketing’s business processes have been more amorphous compared to sales and service. But more likely, it was because Salesforce grew up selling to emerging tech companies that were selling new category products. Your marketing needs in such a situation are rather minimal. But today, there is much less category formation going on — that will likely change with the introduction of the tablet PC— but for now, companies wanting to sell, and who doesn’t, need to market like many of them never have.
Marketing and customer intimacy have driven the social CRM market for several years and the demand destruction caused by the financial meltdown a couple of years ago tipped the scale. That’s why ideas like revenue performance management are so important today and in order to do RPM you need tools. So it’s not surprising that Salesforce bought Radian6. It was time.
Announces first annual Short Tale Award™ for Excellence in Video Use
Stoughton, MA, February 8, 2011 — Beagle Research Group, today announced “The Beagle Short Tale Awards” for 2011. Beagle gives the annual awards for various aspects of video production and use by front office software companies in sales, marketing, service and education. Denis Pombriant, Beagle’s managing principal said, “We believe video is profoundly changing the way companies communicate with customers and prospects and this award brings recognition to the pioneers as well as encouragement to those using the medium.” The award is given for excellence in short videos (typically under six minutes) that are produced during the prior year (2010).
This year’s software vendor winners include Eloqua, Microsoft Corporation, NetSuite, RightNow Technologies, Sage North America, SAS, Salesforce.com, Zuora and a special award to Jess3 a creative agency. The grand prize for Strategic Use of Video went to Salesforce.com, which produced, among others, a video quantifying the effectiveness of its video library as a sales and marketing tool. Pombriant also said, “At this stage of a trend we often see unsubstantiated claims of effectiveness for a new technology. Salesforce, provided the needed proof.”
A full report including links to all winning videos is available at www.BeagleResearch.com.
About Beagle Research Group
Beagle Research Group, LLC is an analyst, consulting and market research organization focused on emerging front office software companies. Beagle Research investigates market trends and provides analysis and insight to vendors and buyers of front office computing solutions. Our content is presented in articles, blogs posts and free downloadable reports at multiple locations across the Internet. The Beagle Short Tale Award and logo are trademarks of Beagle Research Group, LLC.
We’re coming back. We aren’t out of the proverbial woods but we should be on the upswing from the long downturn. According the Labor Department the U.S. economy added 103,000 jobs in December bringing the unemployment rate down to 9.4 percent. Jobs are traditionally a lagging indicator so even better.
Most importantly this was not a one-time event. October and November each showed upticks in employment and the revisions announced at the same time as the December numbers paint a story of improving jobs growth through the fourth quarter. The revisions looked like this—October: from +172,000 jobs to +210,000; for November +71,000 from +39,000.
So that’s all good and you have probably digested this news and moved on wondering when it will effect you. Fair question. Coming out of recessions we always seem to find a new wrinkle to make us just a bit more efficient at our jobs. People get re-hired but the jobs they are hired for are not quite the same as the jobs they left.
I see a lot of this in the front office. I have been speaking with expert in various front office disciplines recently and they’ve given me some things to think about. In sales for instance Anneke Seley, co-author of Sales2.0, tells me that her clients are moving to web and phone strategies.
Phone and web might not be right for everyone but it fits many cases for some important reasons. Prices have taken a beating in the recession, which means that vendors have smaller margins to work with so anything a vendor can do to reduce overhead is worth a try. Reducing the field sales effort—if and only if it can be done without damaging the revenue stream—is a great way to save on overhead.
This does not mean giving up on field selling, it simply means doing a little less by judiciously picking your spots and supplementing with a combination of automation (social networking, analytics) and different job types. And that is why I say people get re-hired but the jobs they are hired for are not quite the same as the jobs they left. If you are in selling you might find yourself doing more phone work and on-line demos before you meet the customer in person. If you are a sales manager, maybe you are thinking of adding inside people rather than field people.
If you are really thinking strategically you are looking for better ways to identify the people you want to spend time with regardless of whether it’s on the phone or at a conference room table. In this vein, I was blown away by one statistic from Eloqua recently. According to the Eloqua Benchmark Report of its customers, users reported being able to reduce the size of their campaigns an average of 41% without sacrificing leads simply by using their automation.
Now, automation can only do so much and the point of automation is that it imparts a new and, hopefully better way, to do something, a method. The results Eloqua cites are methodological so my point is that similar results are within the grasp of anyone employing the right combination of social technologies and analytics. This takes nothing away from Eloqua, which had the sense, the right combination of products and the customer base to perform the analysis. Good for them.
Another statistic that impresses me, which I pass on for your benefit and possibly amazement, comes from a Salesforce video on how to use on–line video for B2B marketing and sales.
According to Salesforce they receive more than 7,500 hits per day on their video library. By their math, if the average view lasts two minutes, it’s like having an extra 46 “hyper-efficient” reps on the phone. Holy &^%$ Batman, that’s a lot of reps!
Now, the fine print here is that Salesforce has been building its video library for several years and today has a stash of over 1,500 of them online. They seem to add several per day lately and I don’t know how they do it. There’s no reason you can’t start today to invest in a video library too though it might require slightly different skill sets than you have in a marketing department focused on events, PR and brochures. Seems like the mantra plays out again, people may get re-hired but the jobs they are hired for are not quite the same as the jobs they left.
What impresses me is that the Salesforce video in question appears to be a primer for anyone who wants to check it out—customers, partners, competitors, it doesn’t seem to matter. That’s a sure sign that change is afoot. We aren’t marketing or selling quite the way we did before and, as usual, the first to pick up on this are the ones that will benefit most.