Dan Martell - Building Marketing Technology Solutions with Jon @ Engagio.com - Escape Velocity Show #17

00:00:00.240 Marketers will all glom on to any tactic that works in volumes that will eventually ruin it.

00:00:05.440 Yeah. We ruin everything.

00:00:07.280 Yeah. You know, and so, you know, great. Maybe, like right now, direct mail is working pretty well.

00:00:13.840 Yeah.

00:00:14.400 You know, everybody else is going to start doing direct mail.

00:00:17.120 And the next thing we know, we're going to be like overwhelmed and we're going to have to find something else.

00:00:21.120 So that's why I ultimately come back to the most important thing is that getting that sales and marketing team dynamic working, you know, so that way you can actually reach out to people with a human touch, maybe say something personalized and relevant, you know, and, you know, you'll figure out the channel to do that.

00:00:42.360 Ignition sequence start.

00:00:45.180 3, 2, 1.

00:00:56.480 Boom.

00:00:56.860 John Miller, thanks for being on the show, man.

00:00:58.480 Howdy.

00:01:00.180 So CEO, founder of Engageo, previously founder of Marketo.

00:01:05.640 You've been doing this now, I mean, SAS, what, 2005-ish?

00:01:09.420 Yeah, we started Marketo, kind of started

00:01:11.760 talking about it late 05 and then really started things up

00:01:14.880 and running in 2006.

00:01:16.040 That was coming off of seven years of Epiphany,

00:01:19.500 which was a non-SaaS company, but was still in the MarTech

00:01:22.120 space.

00:01:22.980 And did they call it ASP back then?

00:01:25.860 What was it called?

00:01:26.900 Was it called SaaS, like subscription as a service,

00:01:29.160 or was it application service?

00:01:30.480 Oh, I mean, by 2006, it was SaaS.

00:01:32.560 OK.

00:01:33.460 Yeah, no, but before at Epiphany,

00:01:36.420 we were this on-premise vendor who had ASP partners for people

00:01:40.620 who wanted to use the software in a host environment.

00:01:44.120 Yeah, but by the time Marketo came up and running,

00:01:47.140 we actually didn't make a big deal about the fact

00:01:49.880 that we were a SaaS solution.

00:01:52.140 It was sort of almost common enough that, no, of course,

00:01:57.700 that's how you would deliver a solution.

00:01:59.380 And where did that idea for Marketo come from?

00:02:03.340 What's the origin story?

00:02:04.460 And then obviously, as you parlay into the ABM space

00:02:07.080 with Engageo, how do you see these opportunities

00:02:12.060 in the markets?

00:02:12.900 Like, starting with Marketo and getting Engageo.

00:02:15.960 Well, I mean, the broader arc is my whole career

00:02:18.720 is marketing technology.

00:02:19.540 So Epiphany, even before Epiphany, before business

00:02:23.080 school, I was associated with a company called Exchange,

00:02:25.260 which is probably the leading marketing tech

00:02:27.180 of the mid-90s.

00:02:28.320 It was an ad platform?

00:02:29.640 No, no, no.

00:02:30.640 It was the first campaign management tool, really.

00:02:34.960 Part of the reason I got the job at Epiphany

00:02:37.120 as a guy with no tech experience

00:02:39.340 was because they were going to enter in the market

00:02:42.460 to compete against exchange.

00:02:43.700 OK.

00:02:44.320 You know, it's like, oh, hey, you know something about this.

00:02:46.020 Yeah, great.

00:02:46.480 Come do it here.

00:02:47.500 So the theme of all these companies

00:02:48.880 is really been pursuing this vision of truly one

00:02:52.900 to one marketing.

00:02:54.280 How can we use all this data and analytics that

00:02:56.340 are available to just make marketing better, right?

00:02:59.720 So that's not spam people want to avoid,

00:03:02.020 but actually meaningful and relevant.

00:03:04.460 So that's sort of what I've been inspiring to all along.

00:03:07.540 Yeah.

00:03:08.540 You know, when we, when,

00:03:10.340 so Epiphany got sold around mid 2005.

00:03:14.840 Okay.

00:03:15.960 And that's when Phil Fernandez and I started talking.

00:03:19.200 And, you know, we believed in this vision,

00:03:22.940 we both believed this vision of like this sort of future,

00:03:25.240 you know, marketing technology.

00:03:26.980 But we'd also seen the challenges that Epiphany

00:03:29.460 and the other companies had,

00:03:31.260 which is enterprise software, $250,000 price points and up.

00:03:37.380 That was hard for marketers to buy.

00:03:39.780 They just didn't have the budget.

00:03:41.260 Yeah, marketers have big operating budgets.

00:03:43.800 But nobody likes putting CapEx investment

00:03:46.020 into what they often see as a cost center.

00:03:49.240 And so the real idea for Marketo

00:03:51.480 was let's build enterprise, powerful marketing software

00:03:56.620 that we can deliver through software as a service that

00:04:00.060 would let us basically make the software as easy

00:04:05.760 to buy for the marketer as buying Google AdWords was.

00:04:08.580 OK.

00:04:09.380 And so the idea was a business model more than

00:04:12.780 And what was the initial price point

00:04:14.100 to make that happen?

00:04:14.820 Any specific feature.

00:04:15.660 So the interesting thing about Marketo

00:04:16.820 is our very first product was a tool

00:04:20.520 to help with pay-per-click advertising

00:04:24.180 and sort of bid optimization tied into the landing pages.

00:04:28.540 And the goal was when we wanted it to be really easy to buy.

00:04:31.300 So you could buy this thing self-service on a credit card

00:04:36.160 and then get up and basically we were just taking 5%

00:04:39.160 of whatever you spent.

00:04:40.600 So I think it was goofy.

00:04:42.120 We had customers who we were earning like $0.21 from.

00:04:46.060 Performance, yeah.

00:04:47.200 Yeah, and so we got up and running with that product.

00:04:50.920 And frankly, it wasn't particularly successful.

00:04:54.100 It was OK.

00:04:55.760 Gave us sort of some operational experience.

00:04:58.120 But through that time, we then built the product

00:05:01.340 that eventually became our marketing automation product

00:05:06.040 and made some hard decisions.

00:05:08.180 Let's drop the pay-per-click product

00:05:10.360 because it wasn't working that well.

00:05:11.500 And let's really focus on this new thing.

00:05:13.460 And what was the product hook for Marketo in the early days?

00:05:15.880 Was it understanding the journey of the potential buyer

00:05:19.280 on the website?

00:05:19.880 Because I feel like that was a really innovative understanding

00:05:23.240 if they showed up on the website and what activities they did

00:05:25.700 and then customizing campaigns from that.

00:05:27.460 that early days yeah that was yeah i mean definitely part of it was kind of tying the

00:05:30.740 the digital behaviors to the ability to kind of you know take action um the the real core problem

00:05:36.660 was you know gosh 2005 2006 remember google adwords was only about three years old yeah so

00:05:43.540 what was happening at the time was marketers were really for the first time generating

00:05:48.100 online leads that scale and and what they really needed was a place to capture those leads

00:05:53.540 you know and they needed a place to do something with them like store them somewhere

00:05:57.300 And then what do they do with the ones that aren't ready for sales?

00:06:00.080 In this case, they had to nurture them and develop them and score them so they could know when to pass the sales.

00:06:05.240 So that was the business problem that we were solving with that early Marketo solution.

00:06:10.880 As I said, we sort of dropped the self-service.

00:06:13.200 We actually raised the price point and actually made it a lot more successful because it was stickier.

00:06:19.380 It made it a little harder to buy.

00:06:20.560 People had to be a little bit more committed to it to kind of be successful.

00:06:24.760 And then Marketo, frankly, took off from there.

00:06:27.040 I mean, it was just got the right business model with a good product that worked in a good category that was growing.

00:06:34.000 And then I think we executed the market and sales pretty well.

00:06:36.640 Did you have a hard time picking the right customer segment, kind of the ideal customer profile in the early days?

00:06:42.400 Did you go pretty broad?

00:06:43.480 How did you figure that part out?

00:06:45.340 In the early days of Marketo, it was relatively straightforward because we had an advantage at the time.

00:06:50.620 There was this company Eloqua, and Eloqua was probably the leading marketing automation platform.

00:06:55.480 I wasn't sure who came out first.

00:06:56.680 Yeah, they were first.

00:06:57.680 Canadian.

00:06:58.680 Yeah.

00:06:59.680 We're talking kind of 2008 now.

00:07:01.680 OK.

00:07:02.680 2009.

00:07:03.680 Elqua is definitely a bigger company than Marketo.

00:07:05.680 And they had done a pretty good job, especially in sort of Sand Hill Road and the Silicon Valley community, kind of convincing people that you need something like this.

00:07:14.680 And the problem with Elqua was that it was pretty complicated, pretty expensive.

00:07:18.680 It was SaaS, but it was relatively long implementations.

00:07:22.680 So when we came along with something that,

00:07:24.900 remember our DNA had been,

00:07:26.520 let's make it really fast and easy.

00:07:28.900 And even though we sort of took away the self-serve,

00:07:31.600 we had all the kind of ease of use

00:07:33.320 that we put into it to enable that.

00:07:35.780 Compare that to then Alcoa, which is people- 1.00

00:07:38.260 Configuration.

00:07:39.060 Which thought it was hard.

00:07:39.880 So we were like, wow, it's just as powerful

00:07:41.600 or almost as powerful, but it's a lot easier to use

00:07:45.220 and more affordable.

00:07:46.640 And so we were able to just really go in and sell to,

00:07:49.160 frankly, the category they had helped to create.

00:07:52.540 And then once we got some scale, now that we're kind of

00:07:54.940 co-creating the category together,

00:07:56.740 and we sort of crossed the chasm,

00:07:57.900 got out of just venture-backed tech and started to grow.

00:08:00.840 Yeah.

00:08:01.380 But having Elko there really helped.

00:08:02.720 Yeah, so they kind of like,

00:08:04.000 I feel like every SaaS company owes Salesforce,

00:08:06.880 because they kind of set the whole even concept of like,

00:08:09.460 hey, let's put stuff in the cloud.

00:08:11.340 Their marketing dollar enabled us to be able to build

00:08:14.180 the companies we built today.

00:08:15.640 We didn't even have to claim that SaaS is a great benefit,

00:08:17.740 because it's just, yeah, of course.

00:08:18.780 Yeah, there's just a better model.

00:08:20.680 So you did Marketo.

00:08:21.840 And then what did you learn growing that company

00:08:24.760 as a founder?

00:08:25.620 Like what are some, if you had to say,

00:08:26.880 these are the three big things that I learned

00:08:29.380 in that journey about yourself or some of the skill sets

00:08:32.560 you had to develop, what would those be?

00:08:35.320 Well, one, I think Marketo was successful despite its culture

00:08:39.520 as opposed to because of its culture.

00:08:41.920 Phil and I didn't even spend one minute talking about values

00:08:45.820 and culture when we were founding the company.

00:08:47.840 We talked about product and strategy

00:08:49.260 and all those types of things.

00:08:50.680 We didn't even codify the core values

00:08:52.180 until we were about $30 million.

00:08:53.640 Wow.

00:08:54.780 And as a result, we ended up with a sort of fragmented culture.

00:08:57.420 It wasn't, I don't think everybody would say like,

00:08:59.260 oh my god, Marketo was such an awesome place to work.

00:09:02.540 Was the product market fit that enabled the growth?

00:09:04.660 We were winning because of a great product market fit,

00:09:06.720 good product, good execution.

00:09:08.580 Phil certainly drove the team hard.

00:09:13.280 So people were generally happy because winning feels good.

00:09:15.900 People like to win, yeah.

00:09:17.500 But it wasn't a great place to work.

00:09:18.940 So that's one thing I wanted to bring to engage you,

00:09:21.400 a much more intentional thought about building culture.

00:09:27.100 It sort of alluded to kind of the whole,

00:09:29.420 sometimes actually putting some friction into the process

00:09:33.880 can help.

00:09:36.040 Because the real problem with marketing technology

00:09:37.780 is there's so many options out there for the marketer.

00:09:42.100 It's like their kids in a candy store.

00:09:44.260 And everybody's like, I've got the solution

00:09:45.780 to help you solve pipeline.

00:09:46.820 I've got the solution to help you solve your problems.

00:09:49.820 And if it's really easy to buy, people are like, sure, I'll try it.

00:09:52.360 I'll try that.

00:09:52.860 I'll try that.

00:09:53.360 You're like, oh, yeah, no problem.

00:09:54.480 Yeah.

00:09:54.980 But they're also going to be quick.

00:09:56.160 It's hard to get sticky.

00:09:56.480 It's hard to get sticky.

00:09:58.400 And actually, like, no, no, no.

00:10:00.500 You actually have to commit to wanting this thing.

00:10:04.260 And then they put the energy in to really be successful.

00:10:07.380 It can help.

00:10:09.380 I think the third lesson is probably a pretty good segue

00:10:12.700 into engaging.

00:10:13.200 Because they didn't have, did you guys call customer success

00:10:15.200 back then?

00:10:15.780 No, no, no, no, it was just needed renewals.

00:10:18.420 Yeah, yeah, it's like revenue retention.

00:10:19.900 It's like, yeah, I like to keep the customer.

00:10:21.940 Yeah, exactly.

00:10:22.540 No, we didn't build, we had, yeah, I mean,

00:10:27.780 I think we had like ACSM at some point.

00:10:30.360 We had like $40 million in revenue or something.

00:10:32.040 Yeah.

00:10:32.580 You know, like to help with the enterprise guys.

00:10:34.500 Yeah.

00:10:36.220 So I think the third lesson kind of evolved

00:10:40.500 over the years doing marketing.

00:10:43.400 because it started with this whole vision of generate a lead, nurture it till it's ready,

00:10:50.040 pass it to sales. And it works really well, especially kind of at the lower ACVs.

00:10:57.240 And then as Marketo got bigger, that engine sort of only took us so far effectively.

00:11:07.160 And what breaks at that level? I mean, what did you guys see in regards to the lower ACVs,

00:11:12.360 interesting lead scoring etc kick it off but then you're saying at a mid-market or enterprise a

00:11:18.120 couple things you know one you reach the point where you know doubling the number of blog posts

00:11:23.240 you write yeah isn't going to double the amount of pipeline you create right and goals are high

00:11:28.040 like you know it's like okay i can't just keep doing more of the same thing yeah you know i need

00:11:32.360 a different engine the other one is you know i always use this fishing analogy you know you're

00:11:37.800 You're fishing.

00:11:38.300 We were fishing with nets.

00:11:39.980 We put our stuff out there, and we didn't care who responded.

00:11:42.660 We just cared, did we catch enough?

00:11:44.160 Yeah.

00:11:44.760 Right?

00:11:45.060 But the problem is you catch a lot of small guys with nets.

00:11:48.280 And the economics for going after bigger companies

00:11:51.220 is usually better.

00:11:52.440 Yeah.

00:11:54.280 You know, you can have three times the deal with only 30%

00:11:57.800 longer sales cycle type of thing.

00:12:00.040 So yeah, but you just don't naturally

00:12:02.820 catch those big fish in your net.

00:12:04.680 You got to kind of go after them with a spear.

00:12:07.300 Yeah.

00:12:08.620 And so what started to happen was sort of a breakdown

00:12:11.300 of the kind of traditional marketing and sales model.

00:12:14.980 Yeah.

00:12:15.520 You know, like the baton, it wasn't a baton handoff anymore.

00:12:17.860 Yeah.

00:12:18.360 Like, no, we're going to pick these big accounts.

00:12:20.620 Named accounts.

00:12:21.280 And we're going to go after them.

00:12:23.080 And you're not going to go after them

00:12:24.640 just by marketing doing the same stuff we've always been doing.

00:12:27.480 Yeah.

00:12:28.300 Better analogy.

00:12:29.200 And you learned this at Marketo.

00:12:30.340 Yeah.

00:12:30.840 Oh, cool.

00:12:31.340 Better analogy was that it was kind of more like a soccer team.

00:12:35.260 You know, marketing was in its position.

00:12:37.380 Sales was in its position.

00:12:39.220 But we had to work past the ball back and forth

00:12:41.500 as we kind of moved the ball down the field.

00:12:43.320 Yeah.

00:12:45.220 And that different dynamic, and frankly,

00:12:49.660 the challenge of trying to do that kind of dynamic

00:12:51.760 with Marketo as my platform is what

00:12:54.160 made me realize it was an opportunity

00:12:55.880 for kind of a new solution.

00:12:57.340 Now, what change in the market?

00:12:58.940 So obviously, inbound, content marketing really took off.

00:13:02.760 Obviously, marketing, having a seat at the revenue table,

00:13:06.200 and that stuff is all fairly, even RevOps as a thing.

00:13:12.400 These are all new things lately.

00:13:14.460 But what did you see change in the way

00:13:17.040 that either companies were buying that made you realize

00:13:20.160 an ABM or an Engageo platform was ready?

00:13:23.340 Because we could be early and wrong,

00:13:24.880 and we could miss the market and be late.

00:13:28.440 What did you see that made you feel

00:13:29.880 like that was the right timing?

00:13:31.140 Well, it's a little bit of some of what I just said.

00:13:33.240 I mean, there's this whole thing.

00:13:34.980 People talk about content shock and peak content

00:13:39.480 and different phrases of just describing what I said.

00:13:41.580 It was like, I just can't grow.

00:13:44.520 It just doesn't work as well as it used to.

00:13:46.500 I need to do something else.

00:13:48.480 I think that's one.

00:13:49.740 I think that GDPR obviously happened later,

00:13:57.600 but there were other privacy regulations

00:13:59.900 were hitting and so you had some dynamic where it was harder for marketing to kind of just do this

00:14:05.900 let me just get a list of people and then i'll start emailing them you know that that kind of

00:14:11.020 went away for marketers but what happened was then you had tools like outreach and sales loft

00:14:17.660 come on the scene and also now marketers weren't the only people who had the ability to email

00:14:22.860 anymore sales people had their own ability to email and frankly they didn't want marketing

00:14:27.420 doing it anymore.

00:14:29.040 And so the role of marketing at the top of the funnel,

00:14:33.300 the only people who can send email

00:14:34.740 and the only people who could work at the top of the funnel

00:14:36.600 went away.

00:14:37.680 That's interesting.

00:14:38.820 And marketers kind of had to.

00:14:40.620 It's true.

00:14:40.980 Sales didn't do that before.

00:14:44.040 Not at scale.

00:14:44.740 No.

00:14:45.120 I mean, before marketing, salespeople.

00:14:46.620 They had enterprise.

00:14:47.400 Yeah, they'd go out and try to get these whales

00:14:49.200 or big accounts, but they didn't have the tools to do this.

00:14:52.980 Any kind of scale or whatever.

00:14:54.660 So that changed the role of marketing.

00:14:58.300 you know obviously buying committees are getting bigger everybody knows that yeah right the

00:15:02.300 implication of that though is that you know now if there's 16 people involved in a decision

00:15:07.740 wow what are the chances that any sales rep is really having one-to-one conversations with all

00:15:12.940 16 it's pretty low very low and so but marketing is the function that's pretty good at talking to

00:15:19.340 mass yeah you know and so the best marketers are starting to think about how all right i have less

00:15:24.620 of a role at the front of the funnel how can i actually play a bigger role later in the funnel

00:15:29.980 you know while sales is already engaged yeah you know by accelerating the deal and you know that

00:15:34.860 kind of thing which is just back to the soccer ball analogy like closer it's not a handoff anymore

00:15:39.340 it's you're working together and i think the third big change is um you know through sas and

00:15:46.860 everything we were talking about most companies make their revenue today off of recurring revenue

00:15:51.660 models you know and expansion has become more important than ever yeah as a result most companies

00:15:57.660 make most of their revenue after the initial sale yeah the whole marketo baton handoff regenerate a

00:16:04.860 lead model is totally focused on new business and unfortunately i think most marketing departments

00:16:11.820 they look at today are still overly focused on acquisition in their business but that's

00:16:16.620 not the reality of revenue rev the revenue is happening after the sale attention yeah

00:16:20.700 you know and and so those are just to sum it up you know you have marketing spending less time at

00:16:27.260 the front of the funnel sales spending more yeah marketing spending more time late in the sales

00:16:32.060 cycle yeah you know to help accelerate deals marketing should be spending more time post-sale

00:16:38.540 to both expand and retain accounts collectively those are the key forces that i think drove

00:16:44.620 of this new model for how sales and marketing teams

00:16:47.860 need to operate.

00:16:49.180 That's crazy.

00:16:50.020 So when you start thinking of a platform for Engagio,

00:16:54.860 what was the first product features

00:16:57.580 that you put together?

00:16:59.500 What did the MVP look like?

00:17:02.040 Well, so remember, in many ways, my North Star

00:17:04.480 hasn't changed.

00:17:05.260 I want to build that platform for true one-to-one marketing

00:17:10.600 that makes every interaction more personalized.

00:17:13.060 intelligent now i'm going to focus that on b2b but yeah but that's sort of the north star yeah

00:17:18.260 uh and i just want to engage you to be you know frankly the next generation of that kind of same

00:17:24.420 sequence yeah you know in order to do that the the most fundamental thing you need you know is

00:17:31.940 the proverbial single view of the customer yeah 360 view you gotta you know and and and the abm

00:17:37.860 the challenge was especially in this b2b account-based world you have you had a a complete

00:17:43.940 view of the lead sitting in marketo but nothing about the account you had data about the account

00:17:50.340 sitting in salesforce right but because the scoop away salesforce works the leads didn't tie to the

00:17:55.060 accounts no so you had a disconnect there you had you know what your website and tools like lead

00:18:01.620 lander that could tell you through reverse ip lookup which companies were visiting the website

00:18:06.660 but that didn't tie to anything else and then you have you know your email and your calendar

00:18:12.020 right and reps are emailing people and communicating setting up settings up meetings

00:18:17.220 and as you just said they never log their stuff nothing you know and nobody's ever succeeded in

00:18:22.260 figuring out how to make them do it so that's its own kind of silo so the first you know engage you

00:18:27.220 mvp on this journey towards building this like next-gen platform yeah is let's just solve that

00:18:32.260 problem let's let's take all the data from these disparate sources um match it to the right account

00:18:39.380 yeah normalize it um so you can make sense of it and we did that using the concept of time

00:18:46.580 um what we realized is you know like a webinar attendee that's 30 minutes yeah somebody who

00:18:53.140 downloads or visits your website that's just maybe one minute yeah somebody who comes to a

00:18:57.380 dinner that's two hours quantify engagement yeah you know so we use sort of use time as a proxy so

00:19:01.940 Single view of the account, normalize it through time,

00:19:05.360 and then we basically made the insights that generated

00:19:10.520 insights that we would then make available to marketing

00:19:12.440 and to sales.

00:19:13.760 The marketers could really start to understand things like,

00:19:15.800 hey, when I do this marketing activity,

00:19:18.500 do I create more engagement with the people that matter?

00:19:21.680 Salespeople could know, what the hell

00:19:23.560 is even happening in marketing?

00:19:25.160 For the accounts I care about, what's happening?

00:19:27.080 Yeah, what messages are they pushing in these accounts?

00:19:29.740 How are they influencing my conversations?

00:19:32.440 What do they consume so that when I get on this next call?

00:19:34.660 Exactly.

00:19:35.020 And again, it's this weird, goofy Salesforce problem.

00:19:38.260 They're looking at accounts.

00:19:39.620 All the marketing activity is tied to the leads.

00:19:42.000 So there was no way for them to even just

00:19:44.380 see what marketing was happening at the accounts

00:19:46.060 that they cared about.

00:19:47.380 And so we solved that problem initially.

00:19:50.320 And hit product market fit on that pretty fast.

00:19:52.520 Like within six months?

00:19:53.880 Oh, yeah.

00:19:54.520 Yeah.

00:19:54.740 I mean, I started on Pi Day.

00:19:58.000 So we started on March 14, 2015, so 31415.

00:20:02.220 We had our first beta customer in July.

00:20:06.100 And we had our first paying customer in November.

00:20:08.120 That's so amazing.

00:20:09.220 Yeah, it was really fast.

00:20:10.840 And what is it that you've obviously

00:20:13.480 culture you're taking, I'm assuming,

00:20:14.740 into Engajo this time, making that more thoughtful up front.

00:20:20.180 From an innovation point of view, how do you guys,

00:20:23.360 because I know you guys use your own product,

00:20:24.940 because a lot of the content you guys write about some

00:20:26.520 of your case studies.

00:20:27.780 What are some of the things that you've done with your product

00:20:31.320 that are kind of unique around ABM?

00:20:33.400 Like, I'm assuming you guys were using your own product

00:20:35.880 right from the beginning to get these accounts.

00:20:38.040 What were some of those campaigns?

00:20:39.660 Well, even before I get to the campaigns,

00:20:41.580 I'll talk a little bit about how we kind of measured everything.

00:20:44.540 Because you've got to know what's working in order

00:20:46.400 to kind of improve.

00:20:49.320 So one of the things we've done is we've defined an account

00:20:52.260 journey.

00:20:53.460 So classically, salespeople have sales funnels. 0.99

00:20:56.940 And why do they do that?

00:20:57.960 It's so that they can understand, well,

00:20:59.700 the account is in this stage, then it

00:21:02.100 has 30% likelihood to close.

00:21:04.200 And here's the things I need to do to move it forward.

00:21:06.780 Dot, dot, dot, dot, dot.

00:21:07.920 We basically took the same thing.

00:21:08.820 We just extended it all the way back to the very top.

00:21:12.040 So accounts that are cold.

00:21:15.960 Accounts that we have targeted and have never

00:21:21.120 done anything with us, but are showing intent

00:21:23.520 off of third-party systems.

00:21:25.860 accounts that are slightly aware,

00:21:27.320 accounts that have at least one engaged target with us.

00:21:34.320 And then, actually, an interesting stage after that

00:21:36.740 was a stage that we call a marketing qualified

00:21:39.240 account, or an MQA, which is really

00:21:42.420 playing off the classic thing that a lot of marketers

00:21:44.720 have been doing, which are MQLs, or marketing qualified leads.

00:21:48.340 So we sort of, no, no, no, it's not about the MQLs.

00:21:50.040 It's about the MQA.

00:21:51.600 We have that stage, and we have the meeting stage,

00:21:53.360 and then the early stage opportunity, late stage

00:21:55.740 opportunity.

00:21:56.520 So we've mapped out that whole journey.

00:21:58.500 And then for each territory, we know where all the accounts

00:22:02.780 are.

00:22:03.860 For our target accounts, our tier one, our tier two,

00:22:05.820 our tier three, we know where all those accounts are

00:22:08.880 kind of against that stage.

00:22:10.120 The amount of data that's available today

00:22:11.620 is just ridiculous.

00:22:13.900 I mean, the third party stuff you talked about, like, you know, 0.94

00:22:17.980 yeah, just I've been told you can, like, you know,

00:22:19.700 essentially monitor search terms within an organization.

00:22:23.200 Sort of.

00:22:23.700 I mean, the way it mostly works is with the intent is,

00:22:31.000 well, so very, one way is like if you, let's say,

00:22:34.000 you can go to G2 Crowd or G2, right?

00:22:37.780 They know who is reviewing your category, right?

00:22:41.380 And they can tell you.

00:22:42.240 Based on IP or whatever, yeah.

00:22:44.080 Or registered user, or who's looking at your competitors.

00:22:47.500 So that's a very explicit way of figuring out intent,

00:22:49.440 and they can sell that to you.

00:22:50.920 A more subtle one is if you're a publisher

00:22:55.680 and you have access to all these content sites,

00:22:58.960 now what you can do is reverse IP lookup.

00:23:01.240 Hey, somebody from HP is on a page with this article.

00:23:06.640 You do semantic processing to figure out

00:23:08.280 what that page is about.

00:23:09.100 Like, oh, hey, people from HP are looking at security software.

00:23:12.640 And when you start to see enough of a trend,

00:23:14.440 you can kind of sell that as kind of an intent search.

00:23:18.000 And that gets, in your model that you mapped out,

00:23:21.360 that gets kind of elevated to?

00:23:23.880 For us, that's further than a cold account.

00:23:26.100 Yeah.

00:23:27.800 Now, it's not somebody who's engaging with us necessarily

00:23:30.240 yet.

00:23:31.660 So once we have these stages defined,

00:23:34.380 what we then can start to do is figure out

00:23:35.920 what are the plays that we want to run

00:23:38.100 against accounts in each stage.

00:23:40.280 So if an account is, so we have an integration

00:23:43.800 to like LinkedIn.

00:23:45.580 So if an account goes to that intent stage for us,

00:23:49.340 but it hasn't done anything with us,

00:23:51.880 we might turn on ads in LinkedIn.

00:23:54.200 So essentially, each stage has a play

00:23:57.480 that you guys have defined.

00:23:58.680 Could be a sequence of steps that you feel like,

00:24:01.480 at this stage, let's execute this.

00:24:03.600 Ideally, through automation.

00:24:05.440 That's where we get the scale.

00:24:06.960 Start to get some scale.

00:24:07.700 Yeah.

00:24:08.200 Yeah, and a lot of the plays end up

00:24:09.820 combining marketing and human touches from sales.

00:24:15.080 So if something gets a little bit further along,

00:24:17.260 we might send a package to the CMO, personalize it,

00:24:22.660 custom node and all that kind of thing.

00:24:24.660 And then as soon as that package is delivered,

00:24:26.920 that triggers something.

00:24:28.440 We use outreach.

00:24:29.460 So it triggers a sequence for the SDR

00:24:31.480 to kind of follow up with that person.

00:24:33.320 Deliver it and somebody signs for the package.

00:24:35.040 So you're tracking the shipping.

00:24:36.940 I mean, this is really cool because you can create these

00:24:38.700 like really elaborate experiences for the account.

00:24:43.500 And based on all these different data points,

00:24:45.500 you can customize the touch points.

00:24:47.900 Yeah.

00:24:48.400 Now, the magic, actually, is slowing things down.

00:24:50.820 Yeah.

00:24:51.320 Because you can automate that.

00:24:52.440 You don't want to overwhelm somebody.

00:24:54.540 You can automate the hell out of stuff.

00:24:56.580 And you could send the same package to 500 accounts

00:25:02.000 with the same generic email follow up.

00:25:04.100 Maybe you get 7% or 8% response rate.

00:25:06.600 Slow that whole thing down.

00:25:08.120 Customize each package based on a little bit of research.

00:25:10.380 I saw the bobblehead stuff you guys talked about.

00:25:12.040 I mean, this is.

00:25:12.940 Do a little bit of extra work.

00:25:14.620 Now you can get 20%.

00:25:16.400 When we do a fully customized, totally bespoke.

00:25:19.360 What's the craziest package drop, mail drop you guys have done?

00:25:23.100 Or what's like?

00:25:24.780 I don't know if there's anything that crazy.

00:25:27.160 I mean, there's one that's sort of memorable.

00:25:33.440 The team, there's a member of the company.

00:25:36.820 But we were getting good engagement from mid-level people.

00:25:39.700 They were coming, they were talking, whatever.

00:25:41.440 But we weren't able to get anything from the CMO.

00:25:47.120 Her profile on Twitter said that she liked Catterberry

00:25:50.260 chocolate and red wine.

00:25:52.960 And so we sent a package to her that

00:25:55.060 had wine, Catterberry chocolate, a copy of my book.

00:26:00.220 And basically it was, I think, Catterberry and wine

00:26:02.660 for five minutes of your time, which worked.

00:26:06.100 She responded and said, OK, you got me.

00:26:08.140 I'll take the meeting.

00:26:08.860 Yeah.

00:26:11.220 Another fun one, this is just a creative SDR.

00:26:15.960 So one of our sales development reps,

00:26:17.080 his girlfriend's a singer.

00:26:19.280 So he had her write and customize a song for this prospect.

00:26:27.400 He recorded it.

00:26:28.300 He sent that to her.

00:26:29.220 He's like, OK, I'll take the meeting.

00:26:30.600 I'll take the meeting, yeah.

00:26:31.260 So there's things.

00:26:33.220 I call these cutesy things you can do.

00:26:35.940 Yeah.

00:26:37.400 Where, you know, partly just because people

00:26:40.980 no, it doesn't scale, right?

00:26:42.820 So, great.

00:26:44.780 We had a company that all they did

00:26:46.700 was they would send people their names

00:26:48.900 spelled out in Scrabble letters, right?

00:26:51.640 Which wasn't fancy, but again,

00:26:52.700 people know like that doesn't scale.

00:26:54.040 Yeah, somebody had to do that.

00:26:56.460 All that said, I mean, the QC stuff is nice.

00:26:59.780 What's even better is commercial insight.

00:27:02.460 Unpack that.

00:27:03.780 And so, I'm sure you've seen the challenger sale.

00:27:07.980 What are the best salespeople do? 0.83

00:27:09.000 They teach their prospects something in a way that's

00:27:13.300 tailored to their specific business and industry.

00:27:17.940 We need to try to do the same thing in our marketing

00:27:20.860 and our prospecting.

00:27:23.060 How do we actually, as part of our prospecting this account?

00:27:28.360 We educate them in a way that gets them wanting to know.

00:27:31.240 So ITS made this study.

00:27:32.500 They said that 75% of executives

00:27:34.520 would respond to an unsolicited marketing outreach

00:27:37.360 if it contained ideas that are relevant to their business.

00:27:40.860 So that's what we have to aspire to.

00:27:43.880 It's a challenge.

00:27:44.420 It's hard.

00:27:45.080 We're in Gageo, and I have to keep pushing my team.

00:27:47.720 Where's the commercial insight?

00:27:48.760 Where's the commercial insight?

00:27:51.580 But I think that's the holy grail.

00:27:53.620 And to do that, do you try to find accounts

00:27:56.260 and group them together that say, these are probably

00:27:58.220 the challenges they're facing.

00:27:59.460 So let's do a custom piece of content, personalize it,

00:28:04.240 but we know it's going to land because they all see that.

00:28:06.820 That's a great best practice.

00:28:08.800 I mean, there's a rough, rough rule of thumb.

00:28:10.580 I mean, this is really, really rough.

00:28:12.200 If you're doing seven-figure deals and higher,

00:28:15.280 for those, just go totally bespoke.

00:28:18.100 Research the hell out of that account, and create

00:28:21.120 custom something for that account.

00:28:22.520 Yeah, strategic outreach.

00:28:24.260 If you're doing six-figure deals, 250 or whatever,

00:28:30.000 group them into micro-segments.

00:28:32.140 Research the hell out of the micro-segment

00:28:34.380 create something that's really commercially insightful and then lightly customize it yeah

00:28:39.340 you know for each one you're doing high five figure deals um so 70 000 60 000 or whatever

00:28:47.740 that's where you know you just you can't do that quite that same level of of customization um at

00:28:53.500 least try to go to the persona level yeah and and still personalize you know dear frank cadbury and

00:29:00.780 and wine at that level, but it's a little hard

00:29:06.120 to go much deeper than that at that price point.

00:29:08.580 And when you guys do ROI calculations for your customers,

00:29:12.900 how do they think of account-based marketing

00:29:16.020 and how much they should spend in that activity?

00:29:21.280 Well, we try to encourage people

00:29:22.780 not to think of it that way, because we

00:29:24.080 try to not have people think of account-based marketing

00:29:26.220 as a campaign, right?

00:29:28.300 It's not.

00:29:29.220 Account-based marketing is a way of running your sales and marketing engine, right?

00:29:33.980 That has tactics kind of beneath the hood.

00:29:37.060 Yeah.

00:29:39.200 You know, what we try to work with our customers on is at the end of the day, you do have a constrained marketing budget.

00:29:47.880 You have to decide where you're spending those dollars or investing those dollars.

00:29:53.880 So very often people will do some kind of multi-touch attribution.

00:29:58.020 which is, okay, here's a deal we created

00:30:00.980 that's worth $100,000.

00:30:03.440 Simplest thing might be like,

00:30:04.540 what were the four campaigns

00:30:06.080 that contributed to that,

00:30:09.520 that touched that deal before we closed it?

00:30:12.680 Okay, well, let's give each one $25,000.

00:30:15.240 That's a simple form of multi-touch attribution.

00:30:19.280 We think that's a little simplistic for ABM

00:30:21.360 because it's very much the baton handoff model

00:30:25.200 where it's just marketing's job

00:30:27.300 to create the opportunity.

00:30:30.240 And in an ABM world,

00:30:32.000 soccer team passing the ball,

00:30:33.900 you have to look at the marketing touches

00:30:35.480 and the sales touches

00:30:36.460 that influence the account on its way

00:30:39.280 towards the outcome you're looking for.

00:30:42.100 That's where those minutes I talked about earlier

00:30:44.340 actually help.

00:30:46.920 Because you need some way to say

00:30:48.740 how much credit are you going to give to each thing.

00:30:50.940 So sure, they attended the webinar, 30 minutes.

00:30:53.520 Sales spoke to them for an hour, 60 minutes.

00:30:56.340 When you're allocating the deal, maybe you should give twice as much to the hour sales meeting than to the 30-minute webinar.

00:31:04.540 And what that lets our clients do is it lets them really look at not just the impact of the marketing, but the relative impact of marketing and sales.

00:31:11.620 Start to think about, hmm, maybe I should not do that trade show.

00:31:14.600 Maybe I should hire another SDR.

00:31:16.020 Yeah, to do a little bit more personal.

00:31:18.620 For example.

00:31:19.740 But it's important to kind of look at the marketing and sales touches together.

00:31:23.040 And then what's your, do you guys support the bow tie approach to kind of like, you know, selling past the sale of engaging these accounts to expand?

00:31:32.460 Yeah.

00:31:32.660 And I said that's sort of a key part of the trends here.

00:31:36.860 You know, so in our own, for example, custom funnel, after customer, we have expansion target, expansion opportunity, expansion one, and then kind of go back around.

00:31:48.820 The trick that where most companies find this challenging is to start to think about it, not just at the account level, but at the buying center level and really understand the opportunities around different kinds of product categories.

00:32:07.720 Because usually expansion is you're selling with one of two modes.

00:32:11.860 So after the sale, you're usually either selling an additional product to the same people

00:32:19.300 or perhaps the same product or a different product to different people.

00:32:24.860 Yeah, department, yeah.

00:32:26.480 And so you need to look at the account in a little bit more subtle level.

00:32:30.500 You can't just say, you know, this account is an expansion target.

00:32:35.560 You have to say, huh, this group of people are engaging with campaigns or content about this product.

00:32:45.660 And so that's an expansion opportunity into that particular demand unit.

00:32:51.720 And then you might have a totally different buying center that's at a different stage of their journey for a different product.

00:32:58.680 So you have to almost double click down one level to understand kind of those different dynamics after the sale.

00:33:05.560 Um, so we can do that.

00:33:07.180 You know, we, we, our customers can look at, you know, heat maps of the account by persona

00:33:11.320 and by product and see kind of where they need to kind of be connecting.

00:33:15.860 Um, the honest truth is that's pretty cutting edge.

00:33:18.600 Most, most clients haven't gotten the operational sophistication yet to be really good at managing

00:33:25.520 that process.

00:33:26.240 And that side, but as, as it's inevitable.

00:33:28.780 Yeah.

00:33:29.140 I mean, as SAS matures, that's really where, as you mentioned earlier, the, uh, the opportunity

00:33:33.680 is going to be in the revenue retention and expansion.

00:33:35.760 Yeah, yeah.

00:33:38.000 I like to say, before Marketo came along,

00:33:40.940 people thought of marketing as the team that

00:33:42.920 made color brochures and threw parties.

00:33:45.460 And then Marketo came along, and it's ilk.

00:33:47.780 And marketing got to reinvent itself

00:33:50.400 as the owner of the top end of the revenue engine, which is cool.

00:33:54.440 Made a lot more credit.

00:33:55.640 CMOs had a lot more credibility in the boardroom.

00:33:58.320 It's time for that role of marketing

00:34:00.460 to be rethought again, where it's not just

00:34:02.480 about generating the new business pipeline.

00:34:05.040 But marketing really has the kind of almost orchestrated

00:34:07.980 the customer experience, including cross-sell,

00:34:11.540 expansion, retention, and so on.

00:34:13.940 To existing accounts.

00:34:14.980 Yeah.

00:34:15.480 Yeah.

00:34:15.720 So that's going to be-

00:34:16.380 I mean, that's what they're doing.

00:34:17.400 They're essentially bringing awareness to the product.

00:34:20.040 Because as your product evolves, you

00:34:21.360 have current customers who may not

00:34:22.360 be aware of the capacity or capabilities.

00:34:25.180 And you want somebody to be thinking

00:34:27.120 about introducing that to your existing customers,

00:34:30.080 not just new customers.

00:34:30.660 Not just your CSM, because it's almost

00:34:32.240 But Evan, that's like having your salespeople do all their own, you know, everything by themselves.

00:34:36.060 Yeah.

00:34:36.260 I mean, market marketing should play a role there.

00:34:37.880 And like you're in it, so, you know, you think it's normal.

00:34:41.960 But like, what are some of the cutting edge, you know, pixelation, remarketing?

00:34:50.120 Like what are people doing from an experience point of view that's really borderline not creepy, but you know what I mean?

00:34:57.340 Because, I mean, if I search on a site and then all of a sudden you know that there's intent, all of a sudden I'm seeing ads on LinkedIn, is there other stuff that people are doing that is in that in regards to try to bring awareness to a product?

00:35:15.340 like i mean i guess a couple things you know first of all say i'll say there's no there's no

00:35:20.780 single magic bullet um second some good line i don't have exactly right like marketers will

00:35:28.700 all glom on to any tactic that works in volumes that will eventually ruin it yeah we re-ruin

00:35:33.980 everything yeah you know and so you know great maybe maybe like right now direct mail is working

00:35:40.460 pretty well yeah you know um everybody else is going to start doing direct mail and next thing

00:35:44.700 we know we're going to be more overwhelmed and we're going to have to find something else

00:35:48.380 yeah um i so that's why i ultimately come back to the most important thing is that getting that

00:35:55.340 sales and marketing team dynamic working you know so that way you can actually reach out to people

00:36:00.700 with a human touch maybe say something personalized and relevant you know and you know you'll figure

00:36:08.140 out the channel to do that if you get the underlying team dynamic working what about

00:36:13.420 What about the amount of education customers

00:36:15.520 are having when they show up even in the sales pipeline?

00:36:18.040 Because I mean, that's one thing I've

00:36:19.720 noticed even the way we buy now with my team.

00:36:22.320 By the time we're doing a product demo,

00:36:24.940 we've researched, looked at the reviews, talked to people.

00:36:28.440 And we're kind of doing a demo as almost like a check and balance

00:36:31.740 to make sure it actually does what it says it does.

00:36:34.600 How has that impacted the sales process or opportunity sizing

00:36:42.660 and pipeline?

00:36:45.580 Well, in general, I think the desire

00:36:48.300 to kind of do that self-service is a bit of an inhibitor

00:36:51.240 on your classic sales prospecting, right?

00:36:53.880 Because people generally don't want

00:36:55.380 to talk to the salesperson until they have reached

00:36:59.640 a certain level of their buying process, right?

00:37:02.320 So the question is, is that just antithetical to everything

00:37:04.460 I'm preaching here, which is kind of getting

00:37:06.960 the human interaction, all that kind of thing?

00:37:09.500 The difference, I think, has to do with the quality

00:37:11.500 the outreach, i.e., if as a salesperson, you're just like,

00:37:16.600 hi, I'm John from Engage.io, and we sell B2B marketing

00:37:19.360 engagement software.

00:37:21.580 Are you free Tuesday?

00:37:22.780 Versus competitive insight.

00:37:24.700 Yeah. 0.99

00:37:25.480 If that's all you're doing, you're screwed. 0.97

00:37:29.680 But can you find a way to knock on people's doors 0.95

00:37:33.880 who have a real pain, teach them something

00:37:37.900 that helped them realize that that pain exists

00:37:39.560 and that there may be things out there that

00:37:41.200 could actually help them, there's still room for that,

00:37:45.040 even in the world of self-service.

00:37:47.320 Now, it gets into complicated measurement things.

00:37:49.360 Maybe you do that, and maybe three weeks later,

00:37:51.940 some junior person in that company

00:37:53.300 shows up on your website and downloads some content.

00:37:57.640 Well, I still haven't gotten sparked

00:37:59.140 by your original executive outreach.

00:38:01.160 So you've got to understand the dynamics of it.

00:38:05.300 But I still think there's a place for well thought

00:38:08.820 through provocative outreach.

00:38:13.020 Around content, to help educate the customer more than just

00:38:17.040 a sales conversation.

00:38:18.020 Yeah.

00:38:18.520 Yeah.

00:38:19.020 Yeah.

00:38:21.020 And that seems to be hard for a lot of companies.

00:38:24.100 Yeah, to do that at scale.

00:38:25.620 Well, it's interesting because just even the concept

00:38:27.700 of plays per stage, and I don't know for your customers,

00:38:32.060 but it sounds like there's a creative aspect that

00:38:34.560 needs to be, you know, it's still new.

00:38:36.100 It's early days.

00:38:37.180 You know, you got to help them understand how to think through each type of account.

00:38:41.980 I'm assuming, you know, SMB, mid-market enterprise probably have a specific play that is going to work better.

00:38:48.040 Each persona has different things that need to work, you know, work differently.

00:38:52.360 Is there any rules of thumb for a certain amount of engagement per stage or touch points?

00:38:57.660 You know, I don't know.

00:39:01.120 I don't know if there's any one rule of thumb I would share.

00:39:03.600 I mean, I like the idea of seven figures, you know, you know.

00:39:06.720 yeah yeah yeah um you know we we see a couple hundred uh interactions you know with with deals

00:39:17.360 where you know i mean a web visit an email i mean yeah you and you add all that up it gets into the

00:39:22.800 hundreds wow um so i don't know if kind of you know and people are always looking for like what's

00:39:29.360 the magic thing if i do this and then this and then this i get the opportunity yeah it doesn't

00:39:34.000 It doesn't work that way, no.

00:39:35.680 And what have you learned second time around?

00:39:38.120 I think you've raised $36 million so far in two rounds, A and B.

00:39:44.500 What's been the new learning around deploying capital

00:39:49.260 in the business?

00:39:50.760 Yeah, I mean, coming off of Marketo,

00:39:52.780 I had the luxury.

00:39:54.320 It was very easy to raise capital, which at the time

00:39:57.280 felt great, especially considering how hard it

00:39:59.280 would have been to raise money at Marketo.

00:40:03.000 I think I made a classic mistake, to be honest,

00:40:04.800 that a lot of people make, which is really easy to raise capital.

00:40:06.720 I probably over-raised.

00:40:09.240 And I raised into the peak of inflated expectations. 0.99

00:40:12.120 The lesson is like, damn, that's hard. 0.96

00:40:16.320 Even if you can raise at that premium valuation, 0.98

00:40:18.840 it means you're priced for perfection.

00:40:21.180 And I like to think I'm pretty damn good, but nobody's perfect.

00:40:24.420 Yeah.

00:40:26.280 And then as a founder, one question I like to ask as we wrap up

00:40:29.140 is a lot of it is about leadership

00:40:32.060 and trying to develop who we are.

00:40:35.580 Who did you need to become, John,

00:40:37.360 to lead the company at this scale?

00:40:40.180 Yeah, it's a great question.

00:40:42.320 The biggest challenge I try to work on

00:40:45.320 is my own development as a leader

00:40:47.400 is to bring the inspiration and the positivity.

00:40:51.940 I'm personally an optimistic, happy person,

00:40:56.140 But I'm always focused on execution and climbing the hill

00:41:00.580 and doing things better.

00:41:05.380 I'll find every typo, every flaw, every problem

00:41:09.460 in what we're doing, which is a good set of attributes.

00:41:12.460 It helps us kind of raise our game.

00:41:14.140 I've had to learn to stop, thank the team for what's awesome,

00:41:19.020 recognize all the amazing things that are going on,

00:41:22.700 take a breath, and then I can say,

00:41:24.100 And here's the next hill we need to climb.

00:41:26.140 But acknowledge kind of the, find the good in what we have

00:41:30.220 first.

00:41:30.760 Catch people doing good things.

00:41:31.980 And celebrate that.

00:41:33.160 That doesn't come natural to me.

00:41:34.240 It's something I've had to work on to be more deliberate about.

00:41:36.540 I think most founders struggle with that.

00:41:38.080 That's awesome.

00:41:38.620 John, where do people find you and tell them about the book?

00:41:41.960 Yeah, where do people follow along?

00:41:43.040 Yeah, so engage.com is the site.

00:41:46.840 And engage.com slash guide.

00:41:50.080 You can download my book all about account-based marketing.

00:41:53.020 It's like 170 pages, but it's a fast read.

00:41:54.980 So I do recommend it.

00:41:58.640 And I'm John at Engage U.

00:42:00.020 That's awesome.

00:42:00.780 John, I really appreciate you coming on the show.

00:42:02.280 Cheers, man.

00:42:02.580 Thank you so much.

00:42:03.960 Thanks for watching this episode of Escape Velocity.

00:42:07.080 Be sure to like and subscribe and leave a comment

00:42:09.960 with your biggest insight from our conversation.

00:42:12.600 Be sure to check out the next episode.

Dan Martell - December 19, 2019

Building Marketing Technology Solutions with Jon @ Engagio.com - Escape Velocity Show #17

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