Thursday, April 24, 2014

InfusionSoft ICON: Contined Focus on Helping Small Business

Seth Godin gives speaks at so many conferences that I’m beginning to suspect there are several Seth Godin impersonators sharing the load. Be that as it may, Godin or someone looking like him gave a keynote at the InfusionSoft ICON conference this week, and he observed you only see videos of bicycle crashes on YouTube, not videos of people riding along smoothly. The point was well taken and crystallized my feeling about InfusionSoft itself: the company is expanding successfully at a breakneck pace – better 50 percent per year -- but has remained so consistently focused on its goal of helping small business that it looks like little is happening. The ICON conference itself illustrated the paradox: it has grown so much that it now needs the space of Phoenix’s main conference center, but the huge size of new location seemed to dissipate the intensity of previous years.

But this is a marketing technology blog, not a theater review. InfusionSoft managers’ relentless repetition of the corporate slogans is part of a very conscious strategy to build a culture that will help the company grow successfully. The more concrete expressions of that strategy are the company’s product, service, and partner offerings.

The actual product news at the conference was fairly modest. There is an improved PayPal integration, several dashboard widgets for business insights, some subtle performance improvements, and full support for the Chrome browser. This limited scope is intentional: the company is moving towards more frequent, smaller releases to reduce the impact of change on existing users and to field new features sooner. It is also reacting to research showing that its customers wanted “better not more” solutions, a mantra that translates into prioritizing effective use over new capabilities.

What this means in practice is that InfusionSoft development is aimed at making small businesspeople more effective marketers. This goes beyond making the system easy to use.  It includes comparing client results with industry benchmarks, recommending types of programs to run, offering a library of prebuilt programs, and making it easier for partners to share programs of their own. These product changes blend imperceptibly with service and partner issues, such as a customer life cycle simplified from seven stages to three, streamlined customer on-boarding process, and better APIs for partner system integration. This mutual support among product, service, and partner programs may be the best evidence of how well InfusionSoft is executing its core strategies.

The one spot where product, service, and partner offerings converge directly is InfusionSoft’s definition of itself as a platform. As you might expect, the company uses the term in the broadest possible sense, to encompass not just the technical features that enable access to its functions and data, but the help it provides to customers’ businesses and how partners can extend its reach. Still, technology is the core of a platform strategy and APIs are the core of that. InfusionSoft’s existing APIs are fairly limited, but the company is engaged in a long-term project to expand them and to write its own applications so they work through the published APIs. I consider using your own APIs as the One True Measure of a platform architecture, so it’s good news that InfusionSoft is moving in that direction. Even better, the company says its new mobile apps are already API-based, so there’s more going on than just talk.

Passion, clear strategy and focused execution may improve the odds but they can’t guarantee success. InfusionSoft could be wrong that there’s a mass market of small businesses willing to invest in better marketing and operational processes.  They may also be more open to competition than it seems. But at the moment, the road ahead looks clear and they’re smoothly cycling along.

Tuesday, April 15, 2014

Matching Marketing Technology to Business Strategy: A Starting Framework

As you may know, I’m working with Scott Brinker of Chief Martech blog fame and Third Door Media on the MarTech marketing technology conference set for August 19-20 in Boston.*

When Scott asked for content suggestions during the early stages of the conference planning, my reaction was that one thing everyone needs is a framework for relating marketing technology investments to larger business strategy. Scott was flatteringly enthusiastic and – I totally should have seen this coming – came back two weeks later with the suggestion that I present such a framework.

Bluff called.

Every consulting engagement I do starts with the relationship between business strategy and marketing technology.**   But I've always defined it on a case-by-case basis.  Until Scott asked, I never had a reason to create the framework for a generalized approach.

So, where to begin? The first thing to remember about strategies is that they’re about making choices: a strategy is a method for reaching a goal; knowing the method gives you a way to decide whether a particular choice is consistent with it.  More concretely, “make money” is a goal; “make money by building high quality products for which customers will pay a premium” is a strategy. Even a strategy as simple as that one tells you a great deal about where to invest, what kinds of systems to build, what kinds of marketing to perform, whom to hire, and much else. I do this analysis for my clients so we can be sure to find marketing systems that are consistent with their business approach and resources.

But here’s the thing: just about every discussion of marketing technology starts off with the (true) fact that today's customers demand a highly personalized experience informed by detailed knowledge of their history. The implication is that every business needs to adapt a strategy of customer intimacy. But if everyone has the same business strategy, then shouldn’t everyone use the same technology strategy as well?


I think the answer is no, for two reasons. First, everyone doesn’t have the same business strategy. Second, even the same business strategy could result in different technology approaches.

• Business strategies still differ. It’s true that customers today expect every company to track their interactions and respond intelligently across all touchpoints.†   But precisely because that expectation is universal, meeting it isn’t enough by itself to be a successful strategy. Remember, strategy is about choices and there’s no choice about whether to meet those expectations. It's HOW you meet those expectations that involves choices that are strategy-driven.

• Tech strategies can vary for the same business strategy.  Let’s say your business strategy is to be a low cost provider. You still have to deliver a reasonable degree of customer intimacy, just as you still have to deliver a reasonable degree of product quality. In this case, the goal of your tech strategy is always the same: “to deliver customer intimacy at low cost”. But the method could be “through extensive automation”, “through low labor cost via outsourcing”, or “through limiting services provided”. Each would imply a different technical approach.

Okay, the notion of a strategy-to-technology framework seems to make sense. [cheers]  So what would that framework actually look like?

It would start with strategic options. The classic big three are high quality, low cost, and high service (i.e., close customer relationships). Each implies different requirements for marketing, product design, production, customer support, and administration, which in turn drive technology, core competencies, and organization.††

Those requirements are the goals of the technology strategies. Methods to meet them are technology options, such as integrated suites, best of breed systems, and platforms-and-apps.  These are modified by other parameters such as in-house vs. outsource, scope of channels, sophistication level, resources, and scale. Note that some of these are choices while others are constraints.

The really critical challenge in setting your technology strategy is understanding the implications of each option so you can pick the technology strategy that best meets the business strategy requirements. Once the technology strategy is chosen, the final step is mapping the choices to the different layers of the marketing technology architecture: Data, Decisions, and Deployment (I just made that up but we all adore alliteration). The resulting framework would indeed be specific enough to give useful guidance. [more cheers]

I’m guessing this sounds like gibberish to at least some of you. Fair enough. Here’s an example of the framework for an online retailer trying to compete with Amazon by offering customers even lower prices. As you read this chart from left to right, each column provides guidance to the column that follows it.

The recommended strategy in this example is to buy an integrated suite and outsource its operation, accepting limited flexibility in return for lowest possible cost. You might not feel that suites actually give the lowest cost, but that's okay.  In fact, I recommended a suite specifically to make the point that the platform-and-app architecture seen as the future of marketing tech by many people (myself definitely included) isn’t always the right solution. Nor, alas, can a framework force you to make the best choice. What it can do is provide clarity about the options being chosen, so people can argue their case if they disagree, and then pull in the same direction once a decision is made.

So that’s what I’m thinking at the moment. It could well change by the time I reach Boston in August. Join us then and find out.


* The conference will provide a much-needed vendor-agnostic forum for understanding marketing technologies and how organizations can use best them. If you’re reading this blog, you should attend. Click here for more info and early bird pricing.

** You do know I make my living by helping companies define their marketing technology requirements and select tools, right? Some people seem not to realize this.

† Well, maybe not every company.  Some still don’t identify individual customers. But even former bastions of anonymity like consumer packaged goods manufacturers now increasingly connect to customers through targeted advertising, social media, and promotions. So we can modify the claim to state that customers expect this tracking when they know the data could be available. It doesn’t change the rest of this analysis.

†† This is all basic “strategy map” stuff based on work by Robert S. Kaplan and David P. Norton. Wikipedia tells me that strategy maps are obsolete but I still find them useful.

Thursday, April 10, 2014

Marketo Conference: Small Changes, Big Picture

Marketo wrapped up its three day Marketing Nation conference yesterday, having once more displayed its own marketing prowess by attracting national media attention (see here and here) with an appearance by Hillary Clinton. Still, the real focus was on Marketo’s own announcements, which included several product changes and a new positioning. (I wasn’t at the conference but Marketo briefed me on their plans.)

The product changes were quite modest: new search engine optimization features for entry level users; a global marketing calendar; and relabeling of InsightEra, which Marketo purchased in December, as Marketo Real Time Personalization. The SEO and calendar features are still in beta and will be rolled out this spring and summer. Real Time Personalization already exists, obviously, and will remain a separate product that can work with any marketing automation system.

The company also announced a deal to use Acxiom data for personalization and, somewhat more interesting, to coordinate advertising messages purchased through Acxiom with email and Web site messages delivered by Marketo. This borders on integration of Web display with marketing automation, an extremely important trend. But it's Acxiom, not Marketo, doing the hard part of matching advertising audiences with identified individuals.

Marketo placed these changes in the context of unveiling itself as “customer engagement platform”. Ordinarily, I don’t pay much attention to these announcements: after all, Marketo has pivoted more than Ben Franklin dancing a gavotte. But Marketo had the hype-blasters turned to 11, so the news is impossible to ignore.

My main reaction was, what’s new? Marketo has described itself as a platform for at least a year now (see this press release, for example) and I’ve been talking about marketing systems as platforms for even longer. More important, the value of platforms has been widely recognized through the tech industry for decades: classic examples include’s own AppExchange, Apple’s iPhone AppStore, Microsoft’s operating system software, and, going way back, the original IBM System 360. The appeal of the platform model is obvious: platform systems are quasi-monopolies (or actual monopolies), so their owners can charge high prices while the app developers compete brutally with each other and must keep prices low. Consumers are intuitively reluctant to accept the monopoly relationship, but usually trade away their freedom because no other choice available or in exchange for convenience and low total cost. App developers make a similar calculation, trading lower margins and less control for the larger marketplace and less development expense.

The trick to winning these benefits is becoming a platform in the first place. This requires a large customer base, easy access by app developers, enough power to be useful, and a barrier that keeps the monopoly intact., Oracle, IBM, Adobe, Microsoft, and other contenders to own “customer experience platforms” all did it the hard way, by first building up a big customer base for their conventional systems and then opening that universe as a platform to app developers.

Every major marketing automation vendor has tried to do the same.  But their customer bases are nowhere near as large, so what’s actually happened in most cases is that app developers have integrated their systems with multiple “platforms”.  One of the more subtle tricks in the platform playbook is to prevent this by making your system different enough from others that it isn't easy to support them as well.  This is usually done by means of a uniquely structured application program interface. But developers won’t put up with this unless a platform offers a big enough audience or other benefits to make it worthwhile. It’s doubtful that Marketo, or any other remaining independent marketing automation vendor, has the market power to do this.

Let me be clear. I’m not saying the platform approach is a bad one for Marketo.  I’m saying they lack the market strength to erect barriers to collect monopoly rents. They’ll have to keep their APIs simple enough that app developers can integrate with other marketing automation systems as well.  This means Marketo will be competing with other platforms for app developer relationships and can’t rely on Marketo-exclusive apps to attract new customers or prevent old ones from leaving. This is good news for app developers and marketers, if not for Marketo investors.

But it’s not enough to decide to be a platform. You have to decide whom the platform will serve and what functions it will include. In the case of customer management, the big question is whether the marketing system should be separate from sales and service systems. The obvious answer is they should be the same: after all, we want a unified customer experience across the entire life cycle, so all departments delivering those experiences should be on the same platform. Indeed, Marketo seems to imply as much with the term “customer experience platform”.

But in an excellent blog post describing the new positioning, Marketo VP Marketing and co-founder Jon Miller makes clear that Marketo believes marketers alone are in charge: “marketers are responsible for an all-consuming process that starts with attracting initial buyer attention and continues all the way to locking in customer loyalty and advocacy.” To remove any doubt, he later clarifies that the “customer engagement platform is the core system of record for marketing, just like CRM is the system for sales and Human Capital Management is the system for HR.”

I’d say this approach is debatable.  It will probably be harder for a marketing-owned system to integrate with customer-facing systems in other departments. Certainly other “marketing cloud” providers like and Oracle would argue otherwise – that, at the least, there should be a shared customer database, and probably some shared processes to select customer treatments, even if those treatments are delivered by channel- or department-specific systems.

Marketo’s conclusion does position them as the best choice for marketing buyers, since they are the only marketing platform vendor with such a limited scope. To quote Miller again: “The marketing platform provider should be a partner to marketing, a company that truly understands what’s happening in marketing and that 'has marketing’s back'. Your marketing platform is not an add-on to sales technology, or a component of an IT solution. It’s the core foundation to all aspects of marketing success. That’s why at Marketo, we think that a marketing platform should come from a company 100% focused on marketing.” Fair enough.

The second big question is what’s included in the core platform and what’s provided by partners. In many ways, this is where the discussion moves from theory to reality, since there are specific choices to be made. Marketo’s published diagram lists three major functions at the platform layer – decisioning (a.k.a. “the brain”), database (“marketing system of record”) and analytics. They put an application layer on top of that, including marketing automation, interactions (real time personalization, search engine optimization, social marketing), and operations (marketing management). The third layer includes delivery in different channels (email, social, landing pages, sales, web/mobile personalization, search). APIs are available to connect each layer to third party applications.

My own definition of the platform layer is pretty much the same as Marketo’s. But Miller’s post lists six components of a marketing platform, corresponding to both the platform and application layers. And Marketo actually delivers functionality across all three layers. In other words, Marketo is not actually selling the platform by itself: it sells the platform in combination with applications and delivery systems, some of which are included and some of which are optional.

At first I thought this violated the platform concept, since the vendor’s own tools will likely have tighter integration with the rest of the system than the APIs make available to third parties. But, on reflection, there’s no requirement for a platform to be fully “application neutral”. Marketo seems to be proposing to sell a basic set of applications and delivery systems and let clients supplement them with third party applications as needed. APIs are an escape hatch for emergency use only, not Lego blocks that let users build a custom collection of products from scratch.

There’s a good case to be made for bundling the platform with applications and execution systems, boiling down to that it saves marketers from having to make a lot of choices before they get started. It also justifies a much higher price than the platform alone, especially if the monopoly position is unavailable. Of course, this ends up looking an awful lot like a traditional marketing software suite, which is exactly what Marketo was and remains under the hood. Marketers excited by the platform vision should look very closely at the reality before assuming that Marketo, or anyone else, can deliver the benefits they expect.

Wednesday, April 09, 2014

Vocus Purchased by Private Equity Firm GTCR: This Could Be Interesting

Vocus announced on Monday that they were being acquired by private equity firm GTCR  for $446.5 million in cash, a premium of 48% over their stock market price. It’s still a modest multiple of 2.4 x revenue, compared with the 6 to 7 x multiples paid for ExactTarget and Responsys by and Oracle and the 14 x that Marketo commands in the stock market. I can think of several reasons for the discrepancy: GTCR isn’t a big software company looking to fill out an existing marketing suite; Vocus sells mostly to small business, not enterprises; Vocus hasn't created enough buzz.  But the main reason is probably that under 15% of Vocus' 2013 revenue came from its marketing automation products.  .

Vocus has been working hard to change its profile. When I wrote about them last July,
they had already created a Marketing Suite separate from their PR Suite. At that time, the marketing product was missing key marketing automation features including lead scoring, multi-step workflows, and integration with Those were all added last month.  Based on a preview the company provided me in February, the implementations are more than adequate for the small marketing departments that are Vocus’ core customers.  To give a flavor for the implementation: 
  • lead scoring holds separate scores for attributes and engagement activities; can assign activity points based on recency and frequency of email, Web visits, landing pages, and news release activity; and automatically recalculates scores over time.  But it only allows one score per customer.
  • workflows are built on a graphical flow chart; support yes/no branching on attributes and activities; can execute next steps immediately, after a specified period, or after an action is completed; and support actions including send emails, add the customer to another workflow, update a list, update a contact record, and remove the customer from the current workflow.  But it doesn't support a/b splits within the flows.
  • synch is bi-directional and works with lead and contact records.  But it doesn't (yet) synchronize opportunities or custom objects.

Email, landing pages, behavior tracking, and reporting were already available in Vocus Marketing Suite, so the new features mean that Vocus now ticks all the major marketing automation boxes. It also still provides the advanced social media monitoring and influencer identification, press release posting, and local directory submission services that most competitors do not.  Plans include an expanded partner marketplace to make third party integration easier, expanded social marketing including social sign-on and social media campaigns, and anonymous visitor tracking without relying on cookies.  The vendor will also increase the sophistication of its core marketing automation functions, adding features such progressive forms, dynamic content, a/b testing for landing pages, and synchronization with additional objects.

Beyond all that, my February notes include some vague but intriguing mention of automated analytics to help marketers do more effective lead scoring, segmentation, and workflow design. That kind of automation could be the key to expanding the number of marketing departments who can take full advantage of marketing automation opportunities.

To sum things up, GTCR has bought itself a very competitive marketing automation product for small to mid-size companies.  It will still mostly sell the business marketers but the social media, directory listings, and press release functions give Vocus more opportunity to serve consumer marketers than usual. The company now reports more than 8,000 marketing automation users,. expected to yield $40 million in bookings in 2014.  This easily makes it one of the largest stand-alone vendors in the industry. If GTCR allows Vocus to spend more freely on marketing and to continue improving its product, there is a good chance that Vocus can elbow its way to a top position in the hyper-crowded SMB marketing automation universe.

Friday, April 04, 2014

Bottlenose Offers Real-Time Trend Intelligence For Social Media and Beyond

I had an interesting briefing a few weeks ago from Bottlenose, which sells what it calls a real-time “trend intelligence” system. The general idea is almost boringly straightforward: monitor events as they occur and pick out new and interesting information. But the technology to make this happen is mind-bogglingly complex, since it includes real-time ingestion of diverse data types, several levels of natural language processing, and sophisticated trend detection.

To give some idea of the scale involved, the company said that simply monitoring “BeyoncĂ©” across social and broadcast media creates 220 billion (with a “b”) data points relating to 2 billion times series tracking more than 100 metrics on 2.5 million entities. The company currently stores trillions (with a "t") of observations for its current dozen or so clients, all big enterprises and agencies including Pepsico, General Motors, Microsoft, Digitas and Razorfish.

Bottlenose keeps up with the world pretty much the same way that you and I do: it scans news, social media, and other sources for information, extracts what’s relevant to our needs, and identifies new information or trends that might require some action. But while we humans can only process a tiny amount of information at each stage, Bottlenose works on another level entirely.

• Data sources. The system ingests huge swaths of social media, virtually every TV and radio broadcast in the U.S., U.K., and Canada (via automated speech-to-text conversion), Nielsen ratings and audience demographics, and stock market data. It can also accept other market and industry data, as well as a company’s own Web analytics, customer purchases and service interactions. This is all processed in real time, using technologies that handle thousands of messages per second per processor. The system can accept any data format from structured transactions to unstructured text.

• Interpretation. Specialized natural language processing extracts entities such as people and topics, identifies concepts and links, and assesses sentiment. This happens without predefined taxonomies or linguistics, although the system does work with nearly 100 rule-based, expansible classes of messages. It appends metadata to entities by matching them with other data sets, such as audience demographics for a TV broadcast. The system maintains profiles on 350 million individuals world-wide, including demographics, cumulative sentiment, language, geography, and social media influence.

• Trend identification. Bottlenose builds a time line tracking more than 150 metrics per entity, such as cumulative sentiment, audience size, influence scores, and demographics. Software agents constantly scan this data for trends, which could include connections, correlations, overlaps, clusters, or other relationships. When the system finds emerging trends that appear to be more than statistical noise, it highlights them in reports.

• Actions. Automated alerts for new trends are high on the Bottlenose agenda, but hadn’t been released when we spoke in March. What users get is a variety of interfaces that let them select a given topic, see relationships and what’s trending, and dig into as much detail as they want – all using real-time data. Key capabilities include seeing connections among topics, seeing the volume of messages and trends in sentiment, analyzing audiences demographics, and comparing statistics for two entities such as competing brands or media channels. Practical applications include identifying the most important influencers on a given topic, finding the most effective hash tags for social media, assessing advertising impact, and buying more effective media.

The underlying technology for all this involves a variety of tools, some proprietary.  The company calls its core processing stack "StreamSense" and says it uses several open source technologies including the Cassandra distributed database and Elasticsearch  real time search and analytics engine.  Although StreamSense is a platform that could be used for many purposes, the company so far has only offered it in conjunction with the Bottlenose trend intelligence application.

Of course, this platform potential is one reason I find Bottlenose so intriguing.  (The other is, it's just plain cool to work with so many kinds of data in such volume so quickly.)  Bottlenose is certainly not offering a Customer Data Platform, since its system is an application, not a central database available to external applications.  I'm not even sure that StreamSense meets the operational requirements for a CDP database, which have less to do with real-time analytics than easy access and flexibility.  But I do know that CDPs deal with higher data volumes and more varied structures than conventional databases can support, so I'm keeping an eye out for alternative technologies that might be better solutions.  Bottlenose might just have one.

Bottlenose was founded in 2010 and launched its original social media dashboard in 2011. It has expanded beyond the social listening category with its enterprise product, which adds TV and radio to social activity. Pricing starts at $200,000 to $500,000 per year, although some deals are larger.