Interview with Atri Chatterjee, CMO at Act-On

We sat down with Atri Chatterjee, CMO at Act-On to discuss customer focus, product development strategy, and the future of marketing automation.

What’s new at Act-On?

Lot’s of things are new. Act-On is now 7 years old, and we’ve grown really fast. We’re 5 years in the market, building out the product and now we’re building up our team. We’ve got a new CFO, who joined us last quarter. We have a new VP of Demand Generation and a new VP of Ops—some of the leadership that will help scale this company, which is what we’re already starting to do.

Where is Act-On’s focus in terms of the customer base?

We have over 3,000 customers, and we’re getting bigger and bigger customers. You probably are familiar with Act-On being strong in the SMB sector. What’s really happening is that Act-On is becoming strong in the mid-market, and that is our focus. So, we still go after small companies, but typically small companies who are growing fast, not microbusinesses.

Can you talk about how the mid-market is different, in terms of needs, from the small businesses that have previously been your focus?

There are no small companies that we sell to that want to remain small. They all want to grow. They want to become bigger, and they want to become more successful.  So they’re not only buying for today, they’re also buying for tomorrow and the day after tomorrow. Mid-market companies are the same way, except what they’re doing today is probably more sophisticated than what the small businesses are doing. The smaller company wants to do tomorrow what the mid-market companies are doing today.

A few years ago, what was considered necessary in marketing automation was more basic than what is considered necessary now. The category has evolved. Needs have evolved. The buyer has started using these capabilities and has realized which things they need.

Analytics requirements, like time to market and time to see return, have become more sophisticated. Users want to make sure when they invest in something that they can see a return on investment. And there’s now enough body of knowledge to show them. The other thing that’s become really important for marketers now is how quickly can they see results, and how quickly can they get metrics and then improve on what they’re doing, after looking at their results? So that’s another big area that we’re focusing on. Multichannel campaigns, content management integrations, dashboards and reports—these are all features that help marketers look at their entire marketing operation.

How are these changes in market focus and marketers’ needs affecting product development?

The needs of users have become more sophisticated. As a result of that, and in anticipation of that, we’re adding value to our product. And, as we get more customers, more valuable customers who are spending more money, the types of things we’re doing in our product are also changing.

We have a lot of new stuff. For example, Data Studio is our product for looking at data inside the system as well as being able to select, package and export that data to more sophisticated analytical tools.

Before that, we announced something that was really a big deal for the Act-On strategy: Act-On Anywhere. Act-On Anywhere is a technology that works with your Chrome or Firefox browser and gives you access to information in the Act-On system, and you can use that information in context of a lot of different places. It enables access to marketing engagement data from any other system. So, for example, if I’m a salesperson I can look at a LinkedIn profile and Act-On Anywhere will show all of the engagement that contact has had with resources at my company—he may have received emails, come to the website, watched a video, etc. While I’m looking at LinkedIn, a little Act-On Anywhere timeline shows up with all of this contextual information, which can enrich my communication with the contact. Or, if I’m at a customer support desk, when a customer calls for help with a problem I can proactively suggest help on other topics as well, based on which whitepapers she’s been downloading. The whole concept is: how do I enrich my interaction with my customers, with my prospects, and use marketing engagement data to do that.

We’re adding a lot of capabilities and balancing this by making sure all of it is usable to the marketer, because we don’t aim at IT. Whatever we sell, we want to make sure it’s usable, installable, run-able by the marketer.

How do the new features fit into Act-On’s overall approach to marketing automation?

As you know, marketing systems generate a lot of engagement data. The value of that is not just in being able to segment and run nurturing programs, but being able to take that data and make it available in other environments.

This ties into our bigger strategy, which is the whole concept of an open marketing ecosystem. Marketing is one of the few disciplines that sees the entire transformation from prospect to qualified lead to customer. Marketing is collecting data all along the way. Wouldn’t it be great if that data became available to other systems and the people who use those different technologies?

How does Act-On’s strategy address the trend of acquisitions, clouds and market consolidation? Do you think marketing automation will continue to see consolidation moving forward?

That’s right, there has been a lot of consolidation. But how much are customers really benefitting? I would say that some customers benefit, as if I was a big company using Oracle, consolidation makes it easier for me to buy from one place. But if I’m a mid-sized company, how much money do I want to spend with Oracle? Are they really the best solution for everything, the most cost-effective solution? Nine times out of ten, no. In that case, I want to have the flexibility to find whatever else is out there.

So that’s why this whole open marketing ecosystem is very important to us. It’s the lynchpin of our strategy. You, Mr. Marketer, you need to have the flexibility to go buy anything that you want. There are so many new marketing technologies coming out, things that new entrepreneurs are creating. Our approach is: hey, marketers need to have the flexibility to go get anything they think works best. And they don’t have to get it all from Act-On. We want to focus on a best-of-breed marketing automation system, so we’re not going to try to build everything.

Are you seeing traction with the open marketing ecosystem concept?

Particularly because we go after the mid-market, we’re finding a huge amount of interest in the flexibility we offer. Our product really integrates well. For example, at Act-On, we have a native integration to all the major CRMs. And we did that right from the beginning.

How is Act-On’s approach to CRM integration different from other MA solutions?

We have a CRM independent layer in our product, so we can connect to Salesforce, Microsoft Dynamics, SugarCRM, NetSuite, etc. And the performance and capability you get with Act-On in each of those CRMs is identical. You don’t have to make a sacrifice and say, “Oh, I have to use Salesforce because this thing really works better with Salesforce.” Absolutely not. The marketing automation, synchronization, and the closed-loop reporting that you get works exactly the same way and gives you the same amount of functionality in any of those CRMs. They all give you an equivalent capability. This is fundamental to our strategy.

Most other companies don’t do this.  Even many of the independent marketing automation companies don’t have this capability. Some of them have started to create a little CRM of their own that they’ve made available, like HubSpot, for example. And our response is—why would you do that? People want to use a best-of-breed capability. Wouldn’t you like to integrate with a tool that does CRM well so that you get the best possible capability, instead of having to make a compromise? I think the same thing applies with the big companies. When you’re an Oracle, maybe you’re getting great marketing automation with Eloqua, but maybe you’re making a compromise on the CRM. With Salesforce, you’re getting a great CRM but you’re compromising with Pardot and ExactTarget. We’re going to do the best we can for the customers we go after—the mid-market—and give them the choice to get anything else, also.

How does a cloud versus best-of-breed approach affect marketing budget?

Best-of-breed approach is, I think, more efficient for the buyer. Think about it this way: If you had the choice to be able to buy a car with all the sets of things that you wanted at that point in time, and then over time just add additional things as you need them, without having to pay a premium, you’d probably start with that option. Versus getting a fully-loaded car with all of these extra things out of the package—if you live in Austin, TX, do you really need heated seats? No, you don’t need it. In the all-in-one approach, you have to make a decision to buy all of this stuff. I think there’s a direct correlation between how prices have changed, and how people are making their buying decisions and what types of packages they’re buying.

How has pricing changed, and what’s your take on the future of pricing for marketing automation?

From our perspective, it’s been great! We’ve tripled our prices in the last four years. Why have we done that? Because we’ve added more value more capabilities.

There are two things that are important with pricing. One is: what are the substitutes? What can you get that gives you equivalent functionality, and what price is it at? The second thing that affects pricing is value. As a market becomes more mature—in economic terms, they call this a perfect market—that equilibrium is maintained. People are willing to pay for value, and in today’s market, you don’t have wide discrepancies in pricing.

Over time the price point of the Act-On system has gone up and it will continue to as we add more capabilities. We’ve got inbound and outbound marketing tools. It’s a platform that’s rich, and it’s built for the marketer. We’re finding that customers are willing to pay more for that additional value. That’s our experience. Someone else has paid the price, and I think it’s those over-priced solutions that were hugely expensive during the early days of the market.

What about Predictive Analytics? Is that something you see your marketers wanting to do?

Our approach to Predictive Analytics is to build it into our system. The way we see it is: well, I want to have better ways to understand what’s happening with my information, and I want to find better ways for the system to be able to tell me what to do better, but I don’t want to know about all that technology underneath there.

What we’re building into our system is the ability to look at how a particular customer is using something, which things are working better—and then use that information to suggest tips for how to get better. It can’t be a one-size-fits-all, because what’s working for one customer in the insurance industry may not work for another customer in the automotive industry. They’re completely different industries. Marketing tactics are different, certain types of campaigns are different, and maybe the channels are different. So the predictive system has to be able to use specific vertical information to make the marketer better.

In the coming months, we’ll announce new capabilities that combine these two things—combine this power of predictive with intelligence into vertical channels, vertical industries, and bring it all together.

You mentioned that it was important for predictive functionality to use industry-specific contextual information. Will Act-On’s Predictive Analytics use third-party predictors, or only data pulled from within Act-On?

Our solution for predictive will draw on a blend of different data types: data collected on our platform as well as data from external systems and tools.

So would you say that you see Predictive Analytics as useful for all of your customers?

Absolutely, yes. At some level, it will be useful for all our customers. Remember, at Act-On our whole approach is like the iPhone approach. You have a huge amount of computing power in the iPhone, but you don’t know that. At the end of the day, it does what you expect it to do.

The way we look at our system is very simple. We need to be able to make these marketers more effective. I don’t want them to fill out 15 little checkboxes, this and that, and set a lot of things…the thing should work! It should work contextually. It should work the way they work.

We would fail if we don’t make these types of technologies available to all marketers who use our system, versus only the high end of them. Obviously, the higher-end customers may have more specific requirements. They may have more reasons to try to tune things. They may want to input data from other places. And those are all valid needs, but some version of this technology needs to go into our entire system.

How does introducing these more sophisticated capabilities, including integrations to other tools, affect implementation?

The more traditional marketing automation vendors, particularly the big ones, have approached this as an IT problem. If you approach this as an IT problem, you have implementation issues, because you expect that you’re going to have an IT guy help put this all together.

If you don’t approach this as an IT problem you say, “I want to enable people to point-and-click integrate.” If something is needed throughout the platform, why not embed it in so that people don’t have to worry about integration? In other cases, where you have more knobs to turn for bigger customers, we have IT support to make it easy for them.

A customer can get started with Act-On within a day. They can connect up their Act-On system with their Salesforce system in a matter of minutes. It just walks you through a little wizard that tells you what fields you want to synchronize, and there you are! You’re up and running with your Salesforce and your Act-On in a few hours. That’s our approach.

We have to do that, with the market we go after. We will continue to do that, even as we add new technologies like Predictive.