Engagio is an account-based engagement platform co-founded in 2015 by Jon Miller, the co-founder of marketing automation company Marketo. ClickZ recently spoke with Miller to learn more about Engagio, their unique approach to account-based marketing, and the changing dynamics between sales and marketing that companies are using to fuel growth.
I studied physics as an undergrad at Harvard and spent my summers doing fusion research at the Lawrence Livermore National Laboratory. I was accepted to MIT for a PhD program in physics, but before I committed to academia, I wanted to try the business world out, so I deferred MIT for a year and got a job in management consulting. Because of my quantitative background, I worked on very analytical projects.
In 1994, I read the book, The One to One Future, by Don Peppers and Martha Rogers, which described a vision where companies could be truly personalized using the data and analytics that was becoming available. It was a trend in the industry that intersected well with my quantitative background. I went on to work at a consulting firm that specialized in one-to-one personalization. From there, I joined an early martech company called Epiphany that was building software for 1:1 marketing and which became the hottest IPO of 1999. I spent seven years there until it was sold in 2005.
While at Epiphany, I met Phil Fernandez, who had been Epiphany’s COO. We had a shared vision to build the next generation in marketing technology that was as powerful as Epiphany, but was easier to buy because it leveraged SaaS. Together, we founded Marketo which has been the leading marketing technology platform in the last 10 years.
I held marketing leadership roles at Marketo for nine years before getting the itch to start another company. I felt that the whole process of marketing and selling was changing a lot faster than Marketo was evolving.
I left Marketo in 2015 to start Engagio where we initially focused on a specific business problem—account-based marketing (ABM). ABM has been a great place for us to play as we build to that next generation marketing platform.
When we were starting Marketo, martech wasn’t a thing yet. There had only been a handful of marketing technology companies, including Epiphany. Before Marketo, marketing technology was bought as on-premise software, which meant that it was a capital investment. You had to lay out $400,000 plus services to buy it. People don’t buy capital investments for marketing, so there just wasn’t any marketing technology.
Companies and investors didn’t understand the category. They didn’t understand how a company that serves the marketing department could be successful. The challenge was convincing people that marketing could get value from technology. When you fast forward nine years later to Engagio, it’s no surprise that now there are thousands of marketing technology companies. The ability to sell software as a service unlocks marketing tech, because marketing has a large operating budget.
Marketers get the largest discretionary budget in the enterprise. The challenge is that there are so many marketing technology companies that it’s hard to stand out. It’s hard to differentiate. There are only so many dollars people are going to spend on tech.
There’s way too much martech out there—what I’d call a vitamin and not an aspirin. An aspirin solves the pain. You have to have it or you suffer. A vitamin just makes something that’s healthy, somewhat better. You can live without the vitamin. So, I’d really try to focus on finding something that’s going to be an aspirin.
My philosophy on CMOs is that there are three pillars of marketing. One is revenue marketing, pipeline creation, and demand generation. Another is corporate marketing and branding—what is the story and the positioning of the company? Number three is product marketing, strategy, and positioning. CEOs are often looking for a unicorn CMO who is going to be good at all three of those things. I don’t think such a CMO exists.
Every CMO is going to have what I call a “major” in one of those areas, a “minor” in one of the areas, and a gap in the third area. My advice to any CEO is always make sure you hire the right CMO for what you need. Early in your business, maybe your number one priority is going to be revenue marketing, so make sure you hire a CMO who is good at that. Sometime later, as the company grows, the number one priority might be product marketing or corporate marketing. I think that’s part of the reason you see turnover of CMOs, because as companies grow and evolve, their key priority evolves as well.
We decided to start with account-based marketing at Engagio based on the work I was doing at Marketo. We were trying at Marketo to do ABM using the technology available, which is Marketo, Salesforce, etc. and it didn’t work.
I made my managing operations team crazy with the requests I had for how to target accounts, how to orchestrate a multichannel program, and how to measure the results. Because the technology we had in Marketo, of course, was not an account-based technology. Marketo only looked at leads. It created all this difficult manual effort just to answer basic questions like, hey, are we even reaching accounts that we care about? That was the inspiration for what we built at Engagio — we deliver an account-based architecture.
We connect through your existing systems like CRM to deliver an account-based lens. We also provide intelligence and analytics to the marketing department and provide insights to the sales team about the accounts that they care about. For the first time, marketing and sales teams are looking at the same data about the same account which helps enable sales and marketing alignment. And, lastly, we help companies orchestrate that complex interaction.
The number one tip I would give to every one of our customers or prospective customers is that your success is going to come from involving sales. Sometimes we see marketers who are afraid of sales for whatever reason. They want to keep Engagio insights just in the marketing team and don’t want to put it in front of sales. That’s never going to be as successful as when you share information with sales, so everyone’s looking at the same data.
One of our customers, Snowflake, is a hyper growth company that makes cloud databases. They’re trying to be the next Oracle, but in the cloud. Their CMO dictated that they are going to use an account-based go to market. They assign territories to their sales team, not by geographic territory, but by named account.
Each rep initially picked 100 accounts and that became their territory. They recognized that it’s not enough to know WHO you want to sell to. If you’re going to be personalized and relevant, you also have to know HOW they behave. They ultimately bought and implemented Engagio to help enable their sales team to better understand those target buyers in their 100 accounts.
They built something called a MAFF, which is a “monthly account fit score” that compares how good an account is with how engaged the account is. The engagement is key. It turns out the MAFF score was highly correlated to the salesperson’s likelihood to create opportunity in an account. Sales used that to prioritize where they spent their time and energy to go after these target accounts.
The other piece they’re using Engagio for is in sharing the engagement data with the finance team, not just the sales team. If they saw a territory that started to have a ton of engagement, they would know that they could hire another salesperson to support that territory, which is ultimately what helped feed their hyper growth because they were able to bring salespeople into the territory where they most needed another sales rep. Engagio provided that account-based infrastructure so sales could see what’s happening with their accounts and marketing could measure what’s working.
The outcome was that their ABM target accounts had twice the amount of engagement of the average accounts and are twice as likely to close. They also had three times the deal size, so their target accounts represented only 9% on the account, but 20% of their business.
Account-based marketing is the go-to-market strategy that coordinates personalized marketing and sales efforts to land and expand target accounts. ABM is not a technology. It’s a way of thinking about how your marketing sales teams work together. It requires fundamentally changing some things versus the traditional lead-based management model. It’s really about marketing and sales efforts and that’s where ABM is such a misnomer. The best companies recognize that if you are only doing this in marketing, you’re going to fail.
If you’re doing the same thing for every account, you’re not really doing ABM, you’re doing targeted demand generation (which is still better than non-targeted demand generation). But if you really want to see the huge benefits that companies get from ABM, you’ve got to focus on marketing to accounts so you can really be personalized.
Marketing traditionally focuses way too much on landing new logos. That’s built into the traditional demand gen process, but so much revenue today happens after the initial sale, especially in subscription businesses. ABM brings a wholesale focus to your largest accounts, so that you’re not only landing but you’re also expanding.
I talk to a lot of people who mistakenly conflate ABM with advertising. It’s not surprising that this happens because all the big ABM vendors (besides us) sell advertising. But ABM, at its core, is about how marketing and sales teams are working. How personalized is it? How relevant isn’t it? How coordinated is it? That is your hamburger. Ads are just the ketchup that you can put on top of it. It may make some things a little bit better, but if all you have for your meal is a big bowl of ketchup, that’s not a very good meal. I think that it’s important to clarify that ABM is not advertising.
People get into the most in trouble around metrics and measurement. This is partly my fault. Back at Marketo, I literally wrote a book called The Definitive Guide to Marketing Metrics ROI. In it, I talked about how marketers earn respect and credibility by being able to talk about how they impact revenue. I explained that meant doing things like counting how many leads you generate and MQLs you create.
There are a lot of marketers whose compensation revolves around MQLs and opportunities created. It’s all about counting things and not looking at quality. ABM is more about quality. It doesn’t care if you’ve generated 100 leads, it cares about whether you’ve engaged the right people at the right companies. When people embark on ABM efforts, but don’t change how they measure marketing success, in some cases, the quality metrics go down and it looks like marketing is doing a worse job and not a better job. You’ve got to change how you measure things.
I hate to say it, but I don’t think so. You can outsource the advertising, but that’s just the ketchup. At the end of the day, ABM is about sales and marketing alignment. It’s about changing how departments work and work together. I don’t see how you can outsource that. Marketers are always looking for the easy button. They’re so busy and they have so many things to do and such high expectations, they’re desperate for somebody to come along and say, “I can do that and I can make it easier.” The reality is that when it comes to ABM, there isn’t an easy button. ABM works, but it requires work.
Because sales is from Mars and marketing is from Venus. These are two departments with many reasons why they should work along and get together, but they have fundamentally different views and personalities.
Sales is very focused on the here and now. They are thinking about this month or this quarter. Marketing, by definition, needs to think long term—next quarter or next year. So the timelines aren’t aligned. People get into sales versus marketing for very different reasons. Salespeople are competitive. They’re looking to make money. They make a lot more money typically than marketers do. Marketers bring a different personality to the dynamic.
The departments are measured differently. It’s easy to see sales output. You see deals close but they get paid through payroll and you don’t tend to feel the cost. It happens automatically, so it’s easy to look at sales as the hero—you see all that revenue, you don’t feel the cost.
Marketing is inverse, where you see all the costs of marketing because every single one of those is an invoice that the CFO or somebody must pay. Every single cost is felt, but the benefits, the outputs are much more subtle. It’s much harder to say that a webinar or a great piece of competitive research or great positioning is what drives the output.
So, you have all these differences between the two teams and you have to work extra hard to communicate and get along. You all do want the same thing, but you’re thinking about the problem differently.
I love talking about this topic. We think that the opportunity exists not just to be an ABM platform, but to truly be the next great marketing platform. Marketing and sales are changing faster than the current platforms are changing. We’ve talked about some of those trends already including the need to look at accounts and people. We talked about the need to look at pre-sale and post-sale. We talked a little bit about how the traditional marketing model generates leads and does a baton handoff to sales. Now that model is falling apart.
Increasingly, the right model is one that looks more like sales and marketing working like a soccer team, they pass the ball back and forth as they move down the field.
For all those reasons, I believe that tools like Marketo are not built to support the way marketing and sales need to work today. There’s going to be a new set of platforms in the future. If you look at Gartner, TOPO and some of the other analyst firms, they’re all saying that it’s likely that the ABM platforms of today will be competing against marketing platforms of tomorrow. We see Engagio as being in the best position for any company to be doing that, so that’s, that’s where we’re headed—building a next generation marketing platform.
I predict that we’re going to see more consolidation in the martech space. There are too many companies in martech. Then, on top of that, you have the uncertainty that’s going on right now because of the coronavirus. A lot of martech vendors get big parts of their pipelines from conferences which are being canceled. That’s going to put even more pressure on large tech companies and is something we might see as doubling down on that consolidation trend driven partly by uncertainties in front of us. It’s easy to start a new martech company, so even if some companies consolidate and others die, there’ll be new ones coming behind them. The total number of vendors may not go down, but you’ll see movement.Reblogged 7 months ago from www.clickz.com