Last year saw a major explosion of interest in marketing automation a.k.a. revenue performance management and social marketing in particular. What makes this interesting is that we also saw the first clumsy attempts from a strategic standpoint to align marketing to the other pillars of CRM - customer service (AWK-ward) and sales (not too bad at all). Still, many CRM vendors either don't have marketing modules or do it rather poorly. But a few independent vendors stood out this year and are poised to make an impact in 2012. Some surprises, one or two repeats, but some of those who dropped off or back to the 6 months list were unexpected. I can't say that for these three winners though. No one is a sure shot but these guys came close. What'sch noticeable about this batch is that there is a strong small business flavor with all three (though, to be fair, that is only one part of Marketo's focus).
Before we get started, here are all the previous posts.
CRM Watchlist 2012 Pt 1A - The Big Guns
CRM Watchlist 2012 1B - The Big Guns Again
CRM Watchlist 2012 - The Winners List
CRM Watchlist 2012 - Let the Reviews Roll: The Top of the Top
CRM Watchlist 2012 Winners - The Generalists
Okay. Now we roll.
Put your hands together for Hubspot, Infusionsoft and Marketo.
is kind of an amazing company. When they started in 2006, they were a modest company that had a site and some software that specialized in Inbound Marketing and not much else. Now they are a marketing powerhouse with a platform, some software and a site, a strong position as thought leaders with great market presence and a claimed market share of They also have money. In 2011, they received a $32 million Series D round of funding from salesforce.com, Google and Sequoia. That brings their total funding to $65 million - more than a little, no?
But they put their money to good use. They've built out their platform so that not only does it provide the key features that small businesses need to do inbound marketing, but also have made the system highly SEO friendly and genuinely easy to use (here's one of their supports, ahem, lionizing them). What makes their move to a platform from an app and a site particularly valuable is that they understand that it is small business that they are building the platform for Not the enterprise.
But they take it a lot further. They've drunk the CRM Kool-Aid, and rightfully so. They have built integrations into salesforce.com, SugarCRM, NetSuite, Infusionsoft, Microsoft Dynamics CRM, Zoho, Highrise and soon enough Nimble. With them, they've managed to cover the range of businesses that they target from the smallest company to the largest upper midmarket entity. They've recognized that capturing the data that marketing systems provide from lead scoring information to campaign intelligence and incorporating into CRM systems adds to the likelihood of success for the small business. Their one weakness, though an understandable one, and more of an intellectual one than a practical one, is that they define CRM strictly around sales, which certainly makes sense in their world. However, just an FYI to Hubspot, customer service is part of CRM systems too and having marketing data incorporated into the customer record is valuable for customer service too. I'm just sayin'.
Even so, their approach to integration is as intelligent as their highly focused management of their mission and vision around small business.
What makes them more remarkable is their thought leadership when it comes to inbound marketing. They have a vast resource library, participate actively in external events with their leadership and provide the kind of training that makes use of their platform much easier for their existing customers and piques the interest of their future customers at a level that you don't see very often. For example, they developed a document just for CRM Resellers who might want to part of the Hubspot ecosystem.
But they go further than that, with highly acclaimed free tools like Website Grader, that are used to provide some insight into how effective a small business is being in their varying efforts ranging from SEO to marketing effectiveness (e.g. their new Marketing Grader). They also provide a very good API so that third parties can build on their tools and platform.
They also practice what they preach. For example, in 2009, they did a webinar with CRM Playaz partner and major CRM thought leader Brent Leary on Social CRM back in the days where it was still a topic for discussion and less for execution. They built the webinar. They had 6500 registrants and 2674 actually attended. What makes this even more remarkable than it is, this was the 4th largest of the year for them, not the largest. That's execution.
Yet, they had a year, 2010, where they fell off my radar completely. The reason was fairly simple. I had no idea what they were doing and they weren't in touch with me. When I checked around during the Watchlist selection process, I found out that they weren't really doing much in the way of outreach to the analyst community then. In 2011, this seems to have been corrected to enough of a degree to put them on my winner's list because everything else they do is just so damn smart.
However, that doesn't mean I don't have concerns. One of my biggest concerns is one of their biggest selling points - their amazing culture.
This is a company that has a good time innovating and tries to do what it can to encourage innovation. Like any other company, it has its disgruntled employees but all in all, hearing what I hear and with my first hand experience with it, it has been open, outstanding. Also I'm a sucker for a company who has no problem doing music video satires with their own pop star, Rebecca Corliss.(here's their music video parody channel). The only thing as it stands now is that I wish they wouldn't name their teams at work after Boston sports teams. That part sucks. LOL.
But, but, but, they are growing. And that means that the culture will have to evolve. The saddest part of growth is that there are some practices and processes that need to be put into place that encourage some standardization so that the staff can be made accountable.(God, I hate saying that since it goes against my emotional grain, but that becomes necessary after awhile) But in a younger culture and one that's based on a bit of the wild west, this can create either unintended consequences or minimally be responsible for serious growth pangs. Yet, with the growth of a company from a little company "where everybody knows your name," to a larger business where you just don't - is necessary to sustain the growth. Maybe they've been doing that lately. My indications are not that. If not, they need to start thinking about it.
Additionally, they need to be more active in the CRM world since it is such a big part of their technology strategy. Get out, sponsor some of them, show up at others, just like they do elsewhere. On their list of conferences attended in 2011, I didn't see a single CRM conference. Maybe I missed one or two. The point remains. For Hubspot, with their platform commitment and CRM integration, this isn't an optional issue. This one is a must do. Their exposure in the CRM community is their exposure to the thought leaders they should be exposed to, the customers they might desire, and will provide some of the market presence they need to expand. No resting on laurels - which they have plenty.
I don't see much else this exceptionally dynamic company needs to do except keep doing what they've been doing. Keep their focus, keep their product strategy on time, build out their platform, continue to integrate with CRM systems, use themselves as a case study for success and I'm sure in 2013, I'll be crowning them again.
has been one of the least known, most interesting companies in the CRM world. Over the past three years, they have made quiet but VERY significant progress with a laser focus on their vision and mission despite being all over the map with their messaging which, I am happy to say, got straightened out two years ago. Mission and vision have been, for the most part, aligned with the messaging ever since.
Their vision/mission is to serve a specifically small business market - companies with sales teams of less than 10; companies with as they call it "influential coaches, experts, speakers" - small agencies is what it seems they mean here - and small local services businesses. That is a highly specific set of clients - which given what they offer may limit their market more than they should.
They have a wildly loyal customer base. Last year at their User Conference (Brent Leary and I will be doing a sponsored episode of CRM Playaz at their user conference InfusionCon 2012 in early April), they had 1300 attendees (roughly 4% of their entire user base of 28,000) which is amazing and shows the level of commitment their customers have to them.
More than that, their product addresses a key trend that is increasingly gaining credence - the alignment of sales and marketing.
The idea of a marketing/sales alignment was first brought to public attention in 2009 by the CRM Watchlist Lifetime Achievement award winners, Peppers and Rogers with their paper, "Sales and Marketing, the New Power Couple". The premise is simple. There is significant benefit to making sure that the relationship between sales and marketing has a set of well-aligned objectives that are supportive of each other's processes and return. While that sounds obvious, its not. Sales has had objectives that were typically short term while marketing objectives were longer term and that created disparities that were seemingly not resolvable. However, recent thinking shows that this isn't the case. In fact, from the technology side, the entire rebranding of marketing automation to revenue performance management (a terrible name) is the result of that recognition. The attempt is to tie marketing to sales revenue objectives. So for example, rather than the traditional objective of sales for, say, quarterly sales quota and marketing for number of leads generated, instead, we now have some element of business profitability as a joint objective, since it takes both departments to do that. (source: Sales & Marketing: The New Power Couple; Peppers & Rogers 2009)
Infusionsoft actually engineers their software to address that alignment for the small businesses they target. Which is a huge plus (and probably should be reflected in their vision statement. More below). They also provide an extra bonus - ecommerce capabilities for small business, something that I'm unaware of in any other CRM-related small business focused vendor's portfolio - though I could be wrong. More recently, they started to address something I was concerned about last year - the integration of social features into their applications - with some Facebook and Twitter integration, sharing features, a simple social media reporting capability and some workflow associated with this. Not bad at all for a first effort. Small business needs with social media are not that complex.
They have a strong, healthy analyst relations program, something that most small business only focused vendors lacked. In fact, the only one that might be better than theirs in that realm is Nimble's which I'll speak about in their review. Infusionsoft has a set of "inner circle" targets they keep briefed regularly with at least one face to face meeting each year. Due to the excellent work of Laura Collins and Kathy Sacks, they also spread a wide net for those not in their circle so there is a broader band of influencers covered too.
They participate in conferences that they need to and they produce thought leadership pieces via a full time content team. You really can't ask for a whole lot more.
Let me be clear, Infusionsoft is an impact player - whether you heard of them or not. They have approximately 8000 customers with over 28,000 users and pretty much own the tiny slice of space they are in. They have a sound leadership, a powerful set of applications, a laser focus, a strong influencer outreach program and thought leadership effort. So what do I see that they need to do in 2012 to be the impact player I expect them to be.
Not much. But there are some things they could do in 2012 to strengthen their long term impact.
- Focus their vision around one of their greatest benefits - the alignment of sales and marketing. Thing is if they are going for all in one around that in particular - then they need to reflect that. At the moment their vision is to "be the marketing software that small businesses use to grow quickly and profitably." Just like everyone else. This needs some serious tweaking because vision is their statement to the small business community about what they can do for them. It could stand a little future-think and poetry in its expression. What they have here doesn't really reflect much visionary thinking at all.
- For a company as successful as they've been, they don't really have the high profile they should have frankly. They have market presence to some extent in the marketing world but not in either the general business world - e.g small business world to the extent they should nor in the CRM world to the extent they should. They should think more about a series of events that are higher visibility types that are not their conference. They throw a lot of eggs into the conference basket and have been great with that in the past few years, but there are 360+ other days in the year too and a few need to be filled with something more...uhh...explosive.
- Also, I'm not sure they need to do much, but I think their partnership program is a bit too tactical. They are not going to get Accenture as a partner because their target size and revenue model don't make sense for Accenture, but strategic partnerships for Infusionsoft to fill out their offerings and go to market with those companies that fill out their offering, do. The partnership idea would be along the lines of their relationship with First Data, which involves the integration of merchant services in their ecommerce offering. Perhaps Infusionsoft might consider the model Sage has with Act! which involves the integration of business services into their offering via partnerships with service companies.
That's really about it. Infusionsoft is a leader in the SMB focused space and despite my brain freeze in leaving them off the winners list accidentally, they truly belong on this in 2012 as a winner.
In one year, Marketo
went from an up and coming marketing automation company to a powerhouse leader in what they and Eloqua call revenue performance management (RPM). This rather impressive rise is something they have every right to be proud of. But, to make a relatively lame analogy, if you move too quickly to come from the depths of the ocean to the top, you can get the bends, so you have to be careful about what you, what you claim and the kind of infrastructure you have to support this exciting and fast growth.
Marketo started out in the small and medium business (SMB) marketing automation space. But responding to the increased interest of the enterprise in marketing automation and at the same time, recognizing that there was a gap in thought leadership that could be filled, they moved quickly to focus on the enterprise as their key market and at the same time, grab the thought leadership in order to capture the mindshare that was necessary in a fast moving market.
But they haven't forgotten their roots either. In 2011, they released Marketo Spark, a very well constructed small business product that doesn't just dumb down their enterprise product. In fact, aside from the traditional marketing automation components, and a tight salesforce integration, it has a couple of really interesting, useful features - a sales insight add-on that provides some basic analytics for SMBs like website visits, email opens, etc. and a one click upgrade to their revenue performance management suite. You might think the latter is a bit self-serving and perhaps it is, but that opprobrium is far outweighed by the convenience it provides a growing business in the Marketo customer ecosystem.
This is an award winning company. They have deservedly won dozens of awards in the last two years and proudly display them on their site (with the exception, I might add a little bugged, since I am human, of winning the Watchlist in 2011. Nowhere to be found. They have been non-responsive to this year's victory so far, also). Most recently, they were put on the Forbes Most Promising Companies of 2011 list, a top 100 of 3000 entries.
They've done one other thing that makes them the company to eclipse in the RPM world. They've captured (for now) the thought leadership in their space.
Back in 2009 and even more so in 2010, it became increasingly clear that marketing automation (sorry, boys) was going to be a potentially explosive segment. What made this particular space peculiar was that no one had thought leadership in the space. No one. Most times, when a market segment gets hot, there are multiple companies that attempt to seize the high ground of thought leadership. Not in this group.
The first attempt at it was from Eloqua who did some good things but let the ball drop in 2010 and throughout 2011 in that sphere. But Marketo went whole hog with several intiatives. First, they developed a best practices resource library with some top flight materials like this one on lead scoring. They created what they call Marketing Moguls - a group of high powered sales and marketing thought leaders in the marketing world like Ardath Albee and Jill Konrath. This group of 11 "moguls" provide both advice and thought leadership to the Marketo customer world. A smart move.
But I can't say that just because they did all this, that 2012 is going to be a guaranteed impact year. Though I think it will be.
For that to happen, there are several things that they need to solve pretty quickly, because they are in a very hot market with increasing demand for software solutions that meet marketing department needs.
- They need to provide considerably more social features than they have. They are one of the strongest traditional marketing platforms on the street. But their social components lack badly. Hopefully, their recent announcement of an alliance with Crowd Factory will begin to resolve this issue.
- They have a puzzling lack of strategic relationships with the biggest players in the consulting world. In fact, their most significant strategic partnership is with CRM Watchlist 2012 winner the Pedowitz Group. That is high quality and provides some of the firepower but it isn't Accenture, CSC, Deloitte, Capgemini, etc. This has to be remedied quickly if they really want to play in the enterprise big leagues. Without those relationships, their marketing to the enterprise is just that - marketing. Who's going to implement it besides the Pedowitz Group? Not enough.
- While they have a very tight (best in the business) native integration with salesforce.com, their other CRM integrations are through third party partner connectors to Microsoft, Oracle/Siebel, SAP, SugarCRM and NetSuite. But by leaving it at this level, they have a disturbing lack of strategic partnerships with their most natural allies. Third party connectors are valuable and necessary but they don't include go-to-market strategy, just connectors.
This is a company that is either going to continue to undergo massive growth or be acquired. Either way, depending on what they want to do, they are positioned to maintain their leadership in the RPM/MA space - and that's why they win in 2012. Because they should.