Death of the Salesman? Marketo Is Automating Sales Relationships-And Growing Like Crazy

11/8/11Follow @wroush

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Cleveland’s vision: it was just a landing page generator, to help companies make sure that they’d have some customized Web marketing materials to offer no matter what Google keyword people had used to find them. (Marketo’s software still helps with that, but it’s only about “5 percent of the current product offering,” Fernandez says.)

The next iteration of the system helped companies to be more systematic about how they turn marketing content into sales leads. “If somebody clicks on your Google ad and goes to your landing page and sees an appealing piece of content, they may be willing to give you an e-mail address in exchange,” Fernandez explains. “It turns out that if that content is high-quality, and you come back a week later and say ‘I hope you enjoyed that piece of content, here’s another one,’ you can get 4x higher conversion rates. It’s brand reinforcement—the start of a long-term relationship with that buyer.”

Over time, Marketo has added the ability to track more and more kinds of interactions. Today, the system features a sales process modeler that lets companies specify exactly how their sales efforts work, what types of data the software should listen for, and what rules should govern automatic marketing actions. A Marketo client might decide, for example, that once a potential customer has clicked on a link in a marketing e-mail, visited two landing pages, and viewed a webinar, it’s time to give their information to a salesperson for a personalized followup.

At that point, the task might show up within Salesforce.com as a task assigned to a specific salesperson. The Marketo plugin within Salesforce.com uses simple metaphors to focus salespeople on the most important leads: 0, 1, 2, or 3 stars to represent the most valuable potential buyers, and 0, 1, 2, or 3 “flames” to represent the hottest or freshest prospects. “If you are really going to figure out how to maximize revenue, you need your salespeople to talk to the right people at the right time,” explains Fernandez. “What our system does, ultimately, is filter and understand who those people are.”

The last big part of Marketo’s platform is an analytics system, which chief marketing officers or chief financial officers can use to see which marketing tactics have proved most effective in the past and predict which ad campaigns, webinars, white papers, e-mails, or trade shows will generate the most bang for the buck in the future. “It’s fundamentally a numbers game,” says Fernandez. “The head of marketing can look at the early stage buyers who, say, interacted with our webinar in June, and see how that is going to flow into revenue in December with spectacular accuracy. He can’t tell me who the buyers are going to be, but he can tell me that 412 of them are going to buy something.”

Of course, there’s still some guesswork involved when it comes to setting marketing budgets. “The Holy Grail—and it’s not a problem we or anybody else has solved—is that you have different [marketing] content of different quality, you have all these different channels, you have the factor of time, and who is assigned to the sales team,” Fernandez says. “That degree of combinatorics is massive. Ultimately, if we can start to use some of our learning algorithms to make sense of how all those factors interact, I think that is where you have an immensely valuable company, a breakthrough company. I couldn’t claim to be there yet, but that is what we are working toward.”

Even without a breakthrough, though, Marketo and its biggest direct competitor, Virginia-based Eloqua, are looking at a pretty large opportunity: they’ve got fewer than 3,000 paying customers between them, compared to Salesforce.com’s 90,000 (which, in turn, is estimated to represent only about 15 percent of all the companies that could be using marketing and salesforce automation software).

But as the numbers and algorithms take over, will Marketo’s whole algorithm-driven approach drain all the creativity out of marketing and sales?

Just the opposite, Fernandez argues. “In marketing, content is more king than ever before—our technology puts a premium on the creation of great content and great branding, and how you open yourself up to the buyer rather than attacking the buyer,” he says. “Then on the sales side, it’s a myth that a salesperson has some kind of intuition about when to pick up the phone and call people. They just don’t. But the art of sales is very much alive. Are you good at listening and aligning with the customer and helping them reach a good decision? It’s all about emotional intelligence and drive. None of this mechanizes great salespeople out of being great salespeople.”

Here’s a Marketo marketing video giving an overview of the system’s features.

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Wade Roush is a contributing editor at Xconomy. Follow @wroush

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