Marketo Founder's ABM Startup Engagio Raises $22M
Jon Miller, Co-founder of marketing automation provider Marketo, which went private with an almost $1.8 billion acquisition by Vista, founded Marketing software startup Engagio about 18 months ago. The company announced on Tuesday that it has raised $22 million in Series B funding led by Norwest Venture Partners, with participation from FirstMark Capital and Storm Ventures. The company has now raised $32 million to date.
It’s actually interesting that Miller left Marketo to invest in a new venture, but what’s more interesting is the brilliant metaphor he uses to explain how he sees his former company and the industry: "Too many sales and marketing teams were hunting the big fish with nets - when they needed to fish with spears," and he explains further: "In the net world, you don't know which fish you'll catch — you just want to catch enough fish. In the spear world, the right people and right companies come to you and you reach out proactively to them. We're going after larger fish with spears. You use nets to catch smaller fish. The challenge has been up until recently all marketing technology has been only aligned to the net-fishing world." He simply means that there must be a specific target in mind.
By taking advantage of his experience with his previous company’s technology, Miller has specified his approach to managing the marketing campaigns which target more specifically the top echelon of customers instead of targeting to a broad set of potential customers in an effort to acquire them. Engagio builds numerous tools that help companies to target only the accounts that are most likely to generate remarkable revenue. The company calls this "account-based everything". In this regard, the platform is designed to help businesses make deals with named accounts or enterprise-level brands rather than a single decision-maker person.
Engagio’s account-based platform targets the "most valuable accounts” and sits on top of marketing automation platforms and Salesforce to provide an account-based view and coordinate outbound interactions across sales and marketing. This fact alongside Salesforce’s acquisitive nature actually makes it a better potential acquirer than some marketing automation providers which would utilize Engagio as an add-on to their existing offerings. However, Miller hasn’t mentioned any plan to sell his startup, and he plans to expand the staff to more than 40 by the end of the year and roughly double that next year. Speaking of which, Engagio has recently appointed Ray Carroll as VP Sales. Prior to Engagio, Carroll spent seven years at Marketo, where he was an AVP of sales and helped grow the company from 1M to 250M of annual recurring revenue. The company classifies its executive team as “a world-class leadership team” as Scott Fehr, VP Customer Success (formerly of Eloqua and Oracle Marketing Cloud); Glen Lipka, Head of Magic and VP Product/UX (formerly of Marketo); and Brian Babcock, Chief Technology Officer and Co-Founder (formerly of Platfora, Rocket Fuel, and Adchemy) are on the team.
In its short life, Engagio has snagged approximately 50 customers from the high-tech industry, including PROS,VMware, New Relic, BlueJeans, Guidewire, Aria, Hearsay Social, Apttus, VersionOne, LiveRamp, and InsightSquared.
"The Engagio platform helps PROS engage target accounts, expand customer relationships and deepen sales-and-marketing alignment," said Patrick Schneidau, Chief Marketing Officer of Revenue and Profit Optimization at PROS. "We have an account-based strategy, but before, Engagio struggled to create a consolidated view across sales and marketing into all interactions within our target accounts. But now, Engagio aligns our activity so the entire go-to-market team can see exactly what is happening across each and every account."
Engagio's lead investor this round, Norwest Venture Partners, a multi-stage venture capital and growth equity investment firm, manages approximately $6 billion in capital and has funded more than 575 companies.
"The Engagio team has used its deep Account Based Marketing expertise to create an account-based everything approach that is truly making a difference for B2B companies," said Sean Jacobsohn, a Partner at Norwest Venture Partners. "Engagio is empowering its customers to identify and focus their selling efforts on high-value accounts by involving everyone who plays a part in the customer journey. This allows companies to orchestrate multi-step plays that engage target accounts across departments and channels, including email, phone, social, and demand generation."
According to FlipMyFunnel’s 2016 ABM Benchmark Survey Report, almost half of B2B marketers already utilize Account-Based Marketing. 64% plan to implement it within the next year and 71% plan to add additional tools for ABM. B2B companies’ need to find new ways to drive sales and cross or upsell customers. Here what Jon Miller has to say about the market:
"ABM is clearly red-hot. But at the same time, marketing alone is insufficient for account-based success. To really reach out to a target account, you need a 1:1 human connection, which is key to success in sales. That's why we're so excited to focus not just on ABM but on Account-Based Everything -- a strategic go-to-market approach that orchestrates personalized marketing, sales, and success efforts to land and expand named accounts."
Even though the idea of marketing to accounts rather than individuals has been around since the mid-90s, tech vendors are now trying to figure out smart ways for identifying the best target accounts that will most likely buy and discovering non-intuitive insights for personalized messaging to automate, scale and simplify implementation of the ABM approach.
ABM is a strategic go-to-market approach and creates more specific, relevant, and personalized interactions to drive engagement and conversion at a targeted set of accounts or expand existing ones. More importantly, it is a collaborative approach that engages sales, marketing, delivery, and key executives toward customers’ success. Just because targeting accounts with marketing is of the defining attributes doesn’t mean it’s enough without follow-up, personalized emails, phone calls, intelligence-driven social campaigns, and account-based sales interactions.
Tony Yang, VP of Demand Generation at Mintigo, wonderfully explains what makes ABM valuable for B2B organizations:
“ABM isn’t the way to go for every organization. But, if it’s right for yours, then the benefits are many. I’ll give you two aspects that make ABM so compelling in my opinion. First, having an ABM approach makes you much more laser-focused as a marketer. Jon Miller from Engagio likens ABM to fishing with spears compared to a traditional demand gen approach of ‘fishing with nets’. By knowing which accounts are the right ones, you zero in on the marketing channels that will help you engage with these accounts and tend to diminish your attention and resources on the channels that are too broad based.Second, many people say that the primary benefit of ABM is that it strengthens marketing and sales alignment. I agree with this wholeheartedly. In a traditional demand gen approach, marketing generates leads, ‘scores’ them to find potential good fit prospects, perhaps do some nurturing, and then throw them over the wall to sales to follow up. Sales will come back and say that the leads were not qualified. In an ABM approach, marketing becomes partners with, and enablers of, sales.”
Another recent study conducted by SiriusDecisions concluded that 92% of B2B companies call ABM “extremely important” to their overall marketing efforts while 60% plan to invest in ABM in the next year. SiriusDecisions data below demonstrates the top ABM activities being practiced today.
According to Jon Miller, the Account Based Marketing process follows six steps below:
Discover contacts and map to your accounts
Develop account insights
Generate account-relevant messages and content
Deliver account-specific interactions
Orchestrate account-focused plays
“To break down walls between sales and marketing, ABM is pretty close to a silver bullet in that it aligns programs’ dollars and focus behind the accounts that the sales teams care about. So there's inherent buy-in. That said, ABM is only as good as your visibility into your highest potential accounts and best-fit customer segments, which gets clearer over time. So it’s most effective when deployed as part of a comprehensive set of targeting strategies,” said Dave Karel, Head of B2B Marketing, LinkedIn Marketing Solutions.
Jon Miller is one of the prominent thought leaders in ABM space. It seems like his team acquired 50 customers significantly faster and generated more capital through its funding than Marketo did at the same stage. Based in San Mateo, Engagio, has shown us the real life examples of ABM success by fulfilling a need in the marketplace. While the buzz around ABM is real, it is nothing new. It’s just another way of looking at the principles of marketing.