Why Size Matters: How Marketing Automation Vendors Define the SMB Market

This is the third post in a blog series discussing key marketing automation trends for SMBs. This series is excerpted from SMB Group’s December 2014 report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Themwhich provides detailed information and insights to help SMBs capitalize on these trends.

Before small and medium businesses evaluate different marketing solutions, its important to understand how vendors define and target the “SMB market,” which is actually a term that has many definitions, depending upon who you ask.

We at the SMB Group define small businesses as those with fewer than 100 employees, and medium businesses as those with 100-999 employees. Meanwhile, the U.S. Small Business Administration defines a small business as having 500 or fewer employees, and has no standard definition for medium businesses.

Among marketing automation and CRM vendors, several tend to view the SMB size range similarly to the SMB Group definition of up to 1,000 employees. But some rely more on revenues to define their SMB niche. In addition, vendors’ market focus varies significantly. For instance, Infusionsoft concentrates on very small, owner-operated business with less than 25 employees, while IBM focuses on what it defines as midmarket companies, those with 51 to 1,000 employees and at least one dedicated marketing professional.

Figure 1: How Technology Vendors Define and Represent Themselves in the SMB Market

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Source: SMB Group, 2014

This diversity reflects the very heterogeneous nature and requirements of what is actually a very fragmented SMB market. Small and medium businesses should scrutinize how vendors define and position themselves because different types of SMBs often require very different marketing, sales, solutions and services.

Vendors usually focus on a particular slice of the SMB market because it’s difficult to satisfy the diverse requirements of the broader market. In addition, SMBs should consider how big a footprint a given vendor has in the segment of the market the vendor is targeting—in terms of both the number and the percentage of its customers that are in that segment. Again, this is a good indicator of both vendor commitment to a given SMB segment and its ability to serve those types of SMBs.

For more information about the full report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Them, please contact Lisa Lincoln, Director, Client Services & Business Development: 508.734.5658 or lisa.lincoln70@smb-gr.com. 

 

SMB Adoption and Trends in Marketing Automation

This is the second post in a blog series discussing key marketing automation trends for SMBs. This series is excerpted from SMB Group’s December 2014 report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Themwhich provides detailed information and insights to help SMBs capitalize on these trends.

SMBs consistently cite factors that impact top and bottom line results as their key business challenges. Attracting new customers, growing revenue, improving cash flow, maintaining profitability and retaining customers are critical, ongoing concerns. So it’s no wonder that they are exploring how marketing automation can help them.

But when it comes to marketing solutions, many small and even medium businesses rely on point solutions such as SEO tools, paid search or pay-per-click (PPC) advertising, email newsletters and social media.

Increasingly, however, SMBs are turning to a more integrated marketing approach. SMB Group’s 2014 SMB Routes to Market Study shows that in 2014, 20% of small and 25% of medium businesses purchased/upgraded a marketing automation solution in the past 24 months. Meanwhile, 22% of small and 26% of medium businesses plan to purchase/upgrade a marketing automation solution in the next 12 months (Figure 1). Although some of these plans aren’t likely to result in actual purchases, the use and awareness of marketing automation are clearly growing among SMBs.

Furthermore, cloud already has become SMBs’ preferred deployment option for marketing automation, with the number of planned cloud deployments exceeding that of on-premises deployments.

Figure 1: SMB Marketing Automation Adoption and PlansSlide1

Simultaneously (Figure 2) SMBs are also using social sites to better engage with customers and prospects: 48% of small and 57% of medium businesses use at least two social sites.

Figure 2: SMB Use of Company-Managed Websites and Social Sites

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Mobile marketing capabilities are also quickly becoming a priority for many SMBs. Mobile marketing is becoming an increasingly important component of SMBs’ overall marketing strategy, with 56% of small and 60% of medium businesses agreeing or strongly agreeing that mobile marketing drives business growth (Figure 3).

Figure 3: Mobile Marketing as a Driver of Business GrowthSlide4

SMBs are incorporating mobile marketing into their businesses by using a two-pronged approach. First, they are increasingly providing employees with mobile-enabled solutions for CRM, marketing and advertising, and social media. Second, they are extending mobile functionality to their customers, partners and other constituents via mobile apps and mobile-friendly websites. Providing access to customer service, the ability to purchase goods and services, and the ability to check delivery status are leading areas (Figure 4). In addition, a substantial percentage of SMBs currently provide or plan to provide capabilities that enable customers to access marketing offers and to join and manage loyalty rewards programs.

Figure 4: Use of/Plans for Customer (External) Mobile Marketing SolutionsSlide6

In subsequent posts in this series, we examine how vendors (Act-On, HubSpot, Infusionsoft, IBM Silverpop, NetSuite, ReachLocal, Salesforce.com Pardot, SugarCRM) view the SMB market, and their strategies and plans to help SMBs integrate marketing across different channels and media.

For more information about the full report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Them, please contact Lisa Lincoln, Director, Client Services & Business Development: 508.734.5658 or lisa.lincoln70@smb-gr.com. 

“Must-Consider” Marketing Trends for SMBs

This is the first post in a blog series discussing key marketing automation trends for SMBs. This series is excerpted from SMB Group’s December 2014 report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Themwhich provides detailed information and insights to help SMBs capitalize on these trends.

Choosing a marketing automation solution may be one of the most important decisions your business makes. As cloud, mobile, social, analytics and other technologies continue to transform the buyer’s journey, this choice is likely to become even more critical.

As the term “marketing automation” implies, small and medium businesses (SMBs) must automate tasks to scale their marketing campaigns in order to reach more prospects and customers, and to provide them with the right information at the right time in their buying journey. Although many small and even medium businesses rely on point solutions, more are turning to an integrated marketing approach. In 2014, 20% of small and 25% of medium businesses had purchased/upgraded to a marketing automation solution in the past 24 months. Meanwhile, 22% of small and 26% of medium businesses plan to purchase/upgrade a marketing automation solution in the next 12 months, as indicated in SMB Group’s 2014 SMB Routes to Market Study.

Figure 1: SMB Marketing Automation Adoption and Plans

Slide1

However, marketing requirements are changing rapidly. Today, buyers conduct much of their research and evaluation online across multiple channels. Because businesses need to be where their customers and prospects are, they must invest to build their digital footprint via websites, social media engagement, search, email marketing and mobile marketing. Simultaneously, they must continue to invest in traditional marketing activities.

SMB Group has identified several key trends that SMBs should consider when selecting a marketing automation solution, including:

  • Cloud computing: The cloud is quickly becoming the preferred deployment method for marketing automation because it relieves SMBs of IT deployment and management issues.
  • Mobile: Buyers are doing more research, shopping and buying on mobile devices, and SMBs must optimize the buying journey on these devices. At a basic level, this means, for instance, that email campaigns and websites need to be automatically rendered and optimized for devices from laptops to smartphones. But many more areas also need to be addressed. For instance, should an SMB develop mobile apps or mobile websites, or use text messaging to connect with customers—or all of the above?
  • Social: Social media has become the equivalent of digital word of mouth, and SMBs need solutions to help them observe, participate in and track the social networks that their prospects and customers use in order to engage and nurture relationships.
  • Content: Content feeds all marketing initiatives and is critical to establishing and sustaining customer relationships. But creating good content is often difficult and time-consuming. SMBs must be able to produce, distribute and repackage content more effectively so they get more value from it.
  • Omnichannel: As the buyer journey evolves to include more touch points, SMBs need to create and maintain a consistent look and feel across different channels as well as gain an integrated view of customer behavior.

Fortunately, many vendors offer solutions to help SMBs capitalize on these trends. But given so many choices, SMBs must carefully evaluate and compare all the options in order to get the best fit for their requirements. Key areas to investigate include:

  • How vendors define “SMB” and position their offerings: Most focus on a particular slice of the SMB market because it’s difficult to satisfy the diverse requirements across the broader SMB market.
  • How many and what percentage of the vendor’s customers are from the SMB segment the vendor targets
  • How well the solution maps to a company’s needs and constraints: Some vendors focus on providing very in-depth marketing automation capabilities, while others combine marketing with CRM in a pre-integrated suite.
  • Internal marketing resources and skills, and whether to take more of a do-it-yourself versus a do-it-for-me approach
  • Pricing, including whether a vendor offers annual, monthly and/or yearly contracts
  • Integration of different marketing and sales activities to gain a unified view of customer and prospects: This is a key driver for marketing automation.
  • CRM tools that need to be integrated: Pure-play marketing automation vendors usually integrate with multiple CRM solutions, while others provide a pre-integrated suite that includes marketing and CRM.
  • How to feed the marketing funnel: Marketing automation without compelling content is like a car without gas. Content nurtures the buyer through the sales funnel. Although you can’t really automate content creation, you can streamline it. Some vendors offer education and even services to help.
  • Tools, services and support programs to help you get the most from the platform, both in the near term and in the future as needs evolve

Vendors have designed their solutions for different types of SMB requirements; there is no one-size-fits-all. In subsequent posts in this series, we examine these requirements and vendor (Act-On, HubSpot, Infusionsoft, IBM Silverpop, NetSuite, ReachLocal, Salesforce.com Pardot, SugarCRM) strategies for SMBs in more detail.

For more information about the full report, SMB Group Perspectives Report: Top Trends in Marketing Automation and How Vendors Are Helping SMBs to Capitalize on Them, please contact Lisa Lincoln, Director, Client Services & Business Development: 508.734.5658 or lisa.lincoln70@smb-gr.com. 

 

ReachLocal: One Stop Digital Shop for Local Small Business

This video interview was originally posted on SMB Group Spotlight. 

Laurie: Hi, this is Laurie McCabe here with SMB Group’s SMB Spotlight. Today I have the pleasure of speaking with Sharon Rowlands, the relatively new CEO of ReachLocal.  Sharon was brought into ReachLocal earlier this year to help transform the company.  Sharon, thanks for talking to me today.

Sharon: Absolute pleasure Laurie.

Laurie: Great.  Before we get started can you just tell me a little bit about who ReachLocal is and how you got started and what the company does?

Sharon: Sure, absolutely.  ReachLocal was founded over 10 years ago to really help local businesses with their digital marketing needs.  It was a time when advertising dollars were still mainly going to print and Yellow Pages. As the Internet became a stronger way in which consumers looked for services, ReachLocal was established to help local businesses tap into that.

Laurie: That’s kind of hard to believe thinking back now that only 10 years ago where we were using Yellow Pages and things like that.

Sharon: Absolutely.

Laurie: So dialing forward a bit what does ReachLocal stand for today, what’s the business about today?

Sharon: The business today is still about helping local businesses get more customers. Most local businesses are small, and we are still all about helping them get found online wherever consumers are searching.  What has changed is clearly the number of places consumers search has expanded. So local businesses now have to worry about being found on search engines, found on digital directories, found on social media. Then they need to be able to manage all that digital traffic in an effective way.

Laurie: I think it’s getting more and more pressurized because there are so many channels that you have to get out through, between social media and search, and if you’re a brick and mortar company you’re still doing things in the physical world.  How do you help small businesses get their arms around this, manage it and break through the noise when you have the big companies with big budgets and more resources?

Sharon: Right.  Well, I think it’s a couple of things but firstly really being a one-stop shop for them because it’s overwhelming to think you have to manage all these different online venues. So ReachLocal does it all for the small business in one place.

We have a really amazing technology platform that optimizes across all of the platforms and makes sure that we’re actually getting you the most leads for your money.  Then secondly what we do with our ReachEdge platform, similar to a marketing automation system, we help the local business manage those leads and provide analytics around what’s working and conversion.  We have great technology but we really believe the business wants help as well–so we also bring great service and expertise to make sure their campaigns are working for them.

Laurie: Can you tell me a little bit about what would be like for a typical small business, maybe a real estate company or a dental practice, what would you do for them start to finish?

Sharon: Let me give you a real life example. I just talked the other week with a relatively new client, six months, up in the Bay Area, a plumber.  He has 10 contractors on staff.  What we did for him was we set him with our ReachEdge platform which gives him a mobile optimized website which is really important because over 50% of searches are being done by mobile, and that’s just growing.

Laurie: And that’s all integrated into the platform?

Sharon: That’s all integrated into the platform.  We then run all his advertising campaigns across digital display and search engine.  We do retargeting campaigns for him. All of the lead intake, which is both phone and web forms, come into one place, get categorized, and alerts him to how he has to follow-up and then really tracks those leads through to conversion and getting new clients.  He can really see the ROI in what his digital marketing spend is doing for him.  His performance in terms of customer growth has been incredible in the last six months.

Laurie: I think a lot of times without that automation a lot of leads and people you bring into the database they just fall through the cracks, you don’t follow up because you’re overwhelmed trying to do plumbing or whatever your business is.

Sharon: Absolutely.  You’ve really hit something really, really important.  So much of the industry talks about lead generation.  You might get a great lead but unless you follow-up and convert it it’s still been a waste of your money.  Typically small businesses, because they’re so busy on their business actually lead conversion tends to get really neglected and one of the things we’re passionate about with ReachLocal is really helping clients convert effectively, not just get them leads.

Laurie: Do you also help them manage or improve their repeat business, referral business, are there elements to that once you have a customer.  It’s not just like a one shot deal, you’re bringing them into the fold so to speak?

Sharon: Right.  Well I think we really encourage our customers to use best practices in terms of email marketing and great content.  At the end of the day content really is foundational.  They can set up lead nurturing campaigns within ReachEdge platform.  Our primary focus really is getting them customers.

Laurie: Getting them new business, which in every one of our surveys, is the number one for small business.  What do you think makes ReachLocal really stand out?  There’s a lot of competitors that are pitching similar things, what do you think makes you different especially when it comes to the smaller company?

Sharon: Okay, I think a couple of things.  Number one I think we really are a one-stop digital shop for small business. That’s very important because it’s overwhelming for them to think about dealing with different partners for different aspects of what they need.  The fact that we can deliver the full spectrum is very important.

Secondly, I we bring ten years of expertise.  We have run millions of campaigns so we know what works.  That meld of great technology but with expertise I really think delivers a really great performance and at the end of the day that’s really what matters to our customers is they want to see the results.  They’re spending very important dollars so getting the performance and the results is key.

Laurie: Speaking of dollars the other thing that’s important to them is something they can afford.  A lot of times I talk to them and oh you know it’s really affordable and I ask for pricing and well it’s about $50,000 to get started!  What’s the deal with ReachLocal, how much are they in for?

Sharon: ReachEdge, which is if you like the marketing system and platform that gives you the website and all the marketing automation tools is $299 a month.  After that, what you choose to spend on search engine and display marketing is dependent upon where you are, how many leads you need to generate. Clearly your budget is going to relate to what type of performance you’re looking to get.

 Laurie: But $299 a month is the basic fee to be using the platform, taking advantage of all the automation?

Sharon: Absolutely, and get all of the reporting and conversion tools.

Laurie: Definitely something that most small businesses have in their wheelhouse in terms of affordability. So where can a company go to learn more about ReachLocal?

Sharon: Well you can find us on the web of course, at http://www.reachlocal.com. Or you can call us at 888-644-1321. And because we are a local business supporting local businesses we actually have a presence all over the world so we have over 20 offices across America.  Typically if you’re a small business and you need somebody to come and talk to you to really help strategize with you we have somebody locally.

Laurie: That’s great.  I’m here in your local New York office right now.  Sharon, this has been a great introduction to ReachLocal, thank you very much.  Thank you all tuning in to this SMB Spotlight.

Six Inspirations for Small Businesses From ICON14

WordItOut-word-cloud-394443Entrepreneurs have always been a rare breed. And, as the U.S. employment rate has improved, the overall rate of business creation has fallen from 0.30 percent in 2012 to 0.28 percent in 2013, according to the annual Kaufman Index of Entrepreneurial Activity. All age and ethnic groups experienced declines, except for the 45 – 54 year-old group. Furthermore, according to the U.S. Small Business Administration, over half of all new businesses fail within five years.

So is it any wonder that many small business owners feel like they are isolated, misunderstood and lacking in the guidance and support they need?

Infusionsoft, which develops marketing automation solutions for small businesses with 25 or fewer employees, can relate to this dilemma—and is committed to helping. The vendor not only provides small businesses with effective, affordable solutions to help “attract, sell and wow customers,” but also offers up an abundance of business guidance and support—key ingredients for lasting business success. To quote Clate Mask (@ClateMask), Infusionsoft’s founder and CEO, “I don’t care about big business! We are totally committed to the true small business market—and changing the definition of success for small business owners.”

ICON14ICON14, held in Phoenix last week, represents Infusionsoft’s flagship commitment to help small businesses. In addition to offering attendees the prerequisite tips and tricks to get the best results from its solutions, Infusionsoft provided its 3,000-plus attendees with insights and expertise needed to create thriving, sustainable businesses and achieve work-life balance.

ICON14 featured both entrepreneurial leaders, including Simon Sinek, Seth Godin, JJ Ramberg, Jay Baer and Peter Shankman, as well as its all-star small business customers, to help guide entrepreneurs to beat the odds and create successful enterprises.

These speakers and Infusionsoft executives imparted many pearls of wisdom during the conference (check out the Twitter hashtag #ICON14 for more). But here are a few that really made an impression on me and that I wanted to share.

  1. Develop a positive corporate culture. Most businesses view happy customers as key to success. Yet what are the odds of creating happy customers if you have miserable or just unmotivated employees? As Simon Sinek (@simonsinek) noted in his talk,“Leaders need to set a circle of safety within their organization so their teams can do wonderful things.” Employees who feel appreciated, included and recognized are your best business advocates. See my interview with Infusionsoft’s VP of People, Anita Grantham (@anitakgran) for great ideas on how to build this type of culture.
  1. Establish a system to grow. Entrepreneurs should take advantage of cloud computing’s “no infrastructure investment required” model to help kick-start and organize their businesses for sustainable growth. Small businesses can use technology to enhance relationships by taking the friction out of process and freeing up more time to focus on customers. Systems also enable small companies to scale more easily and maintain better work-life balance. When the owners of Cleancorp (@CleancorpAU), an Australian commercial cleaning service and the ICON14 winner, did everything manually, they had no time for vacation. Since they began using Infusionsoft to automate sales and marketing, they’ve grown the business 575 percent, and the two co-owners took 9 and 13 weeks of vacation last year.
  1. Once you have a system in place, let go of process and let employees do their jobs. As Clate Mask says, business owners need to spend more time working on the business and less time in it. Or as Christian Isquiedero, CEO of Left Foot Coaching and ICON finalist put it, business owners should ask themselves, are they buying you or your process and mission? “You aren’t scalable, but your process and mission is. So build a system to “Verify, Clarify, Document, Teach and Automate.” Let go of the block and tackle, let employees do their jobs and manage what’s going on via a dashboard.
  1. Remember the sale starts with “No.” Small businesses that succeed follow-up regularly with prospects to stay top of mind for the next opportunity. Keep connecting with people every day, not only to sell, but to be there when the timing is right, according to Peter Shankman (@petershankman). Personalize communications with emails, offers and campaigns tailored to different prospects’ histories and behaviors. And don’t forget to integrate offline communication—phone calls, events, on site meetings, etc. with online activities to help humanize the business.
  1. Be relevant, brief and write well! Also from Shankman: With so many ways for people to get content these days, you need to find out what your audience wants and how they want it. Make sure you communicate relevant information, or people will tune you out. Remember that attention spans are shrinking; you have just 2.3 to 2.7 seconds to capture someone’s attention, so keep it short and sweet. Finally, learn to write or hire someone who can. Poor writing is a turn off.
  1. Make your sales process a customer service process. Heather Lemere (@salonbusiness), owner of Salon Success Strategies, a marketing agency for salons and spas and ICON finalist, uses strategic lead qualification to reduce high sales costs by eliminating bad leads to focus only on the best prospects. With a smaller but better qualified prospect pool, you free up time and resources to turn the sales process into an educational customer service process, which in turn helps close more business.

The wisdom, camaraderie and energy at Infusionsoft was truly amazing. Not only did it help educate and inspire those of us that are already pursuing our passions as entrepreneurs, but it should also help motivate those who have been tentative about making the leap! Remember, YOU create your own opportunities—don’t wait for an employer to do it for you!

(Disclosure: Infusionsoft covered my travel expenses for ICON14)

 

Infusionsoft: Big Dreams for Small Business

Infusionsoft: Big Dreams for Small Business

Last week I attended InfusionCon 2013, Infusionsoft’s annual user event. In case you’re not familiar with Infusionsoft, they provide web-based all-in-one sales, marketing and ecommerce software aimed at “true” small businesses with 25 or fewer employees.

eventOver 2,000 small business owners attended the event, which featured the launch of Infusionsoft’s 2013 Spring Release, and three days of education, training, networking and presentations. Speakers ranging from Daymond John, founder of FUBU and investor on ABC’s Shark Tank, to David Allen, author of the bestseller Getting Things Done, shared center stage with Infusionsoft “Ultimate Marketer” nominees, who provided insight into Infusionsoft’s unique customer community. And, in an industry where most vendors are easily lured upstream into midmarket and large enterprises, the Infusionsoft team doubled-down on the company’s commitment to serving small business.

How does Infusionsoft intend stick with its small business pledge? Let’s take a look based on what I saw and heard at the event.

Climbing Everest

It comes as no surprise to anyone that has ever owned a small business that in every SMB Group study we do, small businesses cite “growing revenues” and “attracting new customers” as their top business challenges. While the goal is straightforward, getting an effective system in place to connect with and nurture prospects and customers is hard and time-consuming. Many end up with using a disconnected assortment of point solutions to address different requirements for things such as ecommerce, email marketing and content management. Not surprisingly this often gets ugly and hard to manage as a business grows. It becomes increasingly difficult to give customers and prospects the responsive and personalized attention, offers and service they expect without working round the clock.

CEO Clate Mask founded Infusionsoft in 2001 with the intent to help small businesses grow without becoming slaves to their businesses by helping them automate their sales and marketing with an integrated, all-in-one solution. Over the past dozen years, Infusionsoft has grown its customer base to 13,500 accounts and 50,000, with a roughly even split between B2C and B2B companies. Growth is also accelerating: Infusionsoft increased revenues and customers by more than 50% in the past year.

I think its fair to say that in the early going, Infusionsoft’s appeal was limited to those small businesses who saw the value of automating their sales and marketing but were also ready, willing and able to invest a lot of time learning how to use Infusionsoft and getting it to work for their businesses. Many of these pioneers have had great success using Infusionsoft to help grow their businesses.

As Infusionsoft has grown however, it has begun to attract more pragmatic customers who don’t have the time or interest required to tinker with configuring software. Small business owners are already wearing enough hats—they aren’t marketing experts and don’t want to be. They see the value that an integrated sales and marketing solution can deliver, but want a shortcut to it.

photoeverestMask and his team have heard this message loud and clear. They know that they need to simplify the solution to appeal to wider swath of small businesses and spike growth to the next level. Consequently, Infusionsoft is focusing on simplifying the solution and delivering positive outcomes to users more quickly to reach its next milestone—100,000 customer accounts in the next four years.

Towards a Sherpa Style Solution

Infusionsoft’s 2013 Spring Release is all about doing more of the heavy lifting so its users don’t have to. The release features a more visual interface, easier to use drag and drop tools, and templates to help small businesses get going. For instance:

  • The My Day dashboard makes it easier to for users get organized, create quotes and move quickly through sales activities to close more business.
  • Infusionsoft’s Marketplace provides a library of free, pre-built marketing campaigns that have a proven track record of converting leads into buyers. Instead of reinventing the wheel, users can download a campaign to their Infusionsoft app, tweak it and go.
  • A new quoting tool that streamlines the quoting process and helps users create, track and manage quotes.
  • New interactive training tutorials help users learn about how to use additional capabilities from within the solutions with boxes that pop up to explain how to do things relevant to where users are in the application.

Infusionsoft has also integrated GroSocial (which it announced the acquisition of in January) with Infusionsoft Campaign Builder. GroSocial enables users to create and manage social campaigns on Facebook and Twitter, and the integration with Campaign Builder whittles down the time it takes to create, manage and track social media marketing campaigns.

Staying the Course

Earlier this year, it captured a $52 million dollar financing round from Goldman Sachs. Skeptics, myself included, have wondered if Goldman Sachs will force Infusionsoft to go upmarket or position for acquisition. After all, striking the right balance to deliver value and build volume in this very fragmented, diverse market is not for the faint of heart. Once you move past turnkey point solutions, very few vendors have been able to establish enduring scale and success.

photo listencareserveBut Mask says that the investment firm wants Infusionsoft to keep its small business pledge and build a great, long-lived company. It turns out that Goldman Sachs supports small businesses through its non-profit foundation, 10,000 Small Businesses, and Infusionsoft sees potential synergy with this initiative. Meanwhile, Infusionsoft is staying true to its own small business roots. Over 60% of its employees have experience running their own small businesses, and Infusionsoft encourages new employees to continue running their small businesses while they work for Infusionsoft to keep the small business focus sharp and stay true to its mantra to listen, care and serve small businesses.

Infusionsoft is also expanding its ecosystem of developer and service delivery partners, which now includes over 300 partners. This year’s Battle of the Apps, showcased at InfusionCon, showcased 4 contestants who develop plug-ins and add-ons to the Infusionsoft platform.

we empowerIn January 2013, Infusionsoft opened up its new 90,000 square foot building to accommodate the 700 employees it will add to its staff to support its small business growth goals and culture. When you walk in, you’re greeted by a big wall with hundreds of photos of Infusionsoft’s small business customers. The building features:

  • Meeting rooms that small businesses in the Phoenix community can use free of charge.
  • A large space to accommodate training for customers and partners.
  • Prominent displays of the company’s nine core values and performance benchmarks for its Everest climb.
  • A games room, mother’s room and a cereal bar—which harkens back to remind everyone of the early dark days when Mask and his then small team lived on cereal and pizza.
  • Infusionsoft is also expanding its ecosystem of developer and service delivery partners, which now includes over 300 partners. This year’s Battle of the Apps, showcased at InfusionCon, 4 contestants who develop plug-ins and add-ons to the Infusionsoft platform.

Interestingly, the building also includes a Dreaming Room—complete with a library and full-time Dream Manager—to help Infusionsoft employees set and attain their personal goals. Infusionsoft believes that happy employees equate to happy customers—and it is filling the walls with photos of how its employees are achieving their dreams.

Perspective

Will Infusionsoft’s dedication to small business pay off? Will it be able to stay the small business course, and find the formula that eludes so many tech companies. Is it on track to become a scalable, enduring small business solution company ala Intuit? Of course, only time will tell if Infusionsoft’s execution will live up to its intentions.

The company will need to strike that fine balance of creating powerful solutions without complexity—a rare thing indeed. But, so far, I like what I see. Keeping fresh small business blood running through its employees’ veins should also help keep it focused on and in tune with small businesses—especially when so many of the vendors targeting small business are so far removed from the realities that small business owners face. Infusionsoft has the capital it needs to provide a better user experience for its customers, and broaden its partner ecosystem to add the nuanced capabilities that diverse small business customers demand.

Infusionsoft’s goal for next year’s InfusionCon is 4,000 small business owner attendees. I’ll be watching to see if the company meets this objective, because convincing that many “true” small business owners to put day-to-day business needs aside for three days to travel and invest to learn how to use any software solution may be a first. If Infusionsoft pulls this off, it will be a very good omen indeed that it can fulfill on its dreams for itself and for its small business customers.

Making Small Business a Bigger Business: Intuit’s Acquisition of Demandforce

Intuit announced last week that it was acquiring Demandforce, which provides an integrated suite of Web-based social media and marketing tools for small businesses, for $423.5 million in cash. Demandforce automates many of the internet and social media marketing tasks that small businesses increasingly need to do, giving Intuit a proven front office play: Demandforce already has about 15,000 customers, books about $50 million annually in revenue, and is growing at about 80% annually.

This is Intuit’s second biggest acquisition (Digital Insight, which Intuit acquired in 2006, was the largest). What makes Demandforce so attractive to Intuit? Let’s count the ways!

1. Broaden Intuit’s Front-Office Presence

Intuit has a very strong footprint in small business “back-office” applications, such as accounting, payroll and payments solutions. As important as these solutions are to running a businesses, they do little to address small companies’ top challenges–which according to SMB Group studies, are to  attract new customers and grow revenue.

Intuit has made some acquisitions over the past few years to provide customer-facing application to small businesses. The most notable is Homestead, which helps small businesses build web sites and create an online presence.

Demandforce builds on this acquisition, and can help Intuit capitalize on the broader shift to digital marketing that’s being fueled to a large degree by the adoption of social media and mobile solutions. Now, Intuit can provide it’s five million QuickBooks desktop users, and over 400,000 QuickBooks Online customers with Demandforce, which is designed to help services-based businesses grow revenue, retain clients and strengthen their online reputation. Demandforce has already done the integration with QuickBooks and now they can mine the Intuit installed base for service businesses that would benefit most from Demandforce.

And, at roughly $300 per company per month, Demandforce figures to be one of Intuit’s most profitable offerings over time.

2. Gain Industry Solutions and Go-to-Market Expertise

Demandforce’s customers span the true small business service universe–veterinary, pet services, dental care, automotive repair, medical spas, salons, chiropractors, and fitness centers, to name a few.  (The company recently added a solution tailored for accountants–which should turn into a doubly nice move as about 250,000 accountants use QuickBooks).

Demandforce gives these small businesses affordable, easy to use tools similar to those that large enterprises use–and tailored to their industry-specific needs. It’s model is to select an industry, study it, and identify the top industry solutions in that area, such as Henry Schein for dental. Then Demandforce engineering does the integration work, and looks for partners that sell into the relevant industry. The vendor markets through industry trade shows and conventions, and closes sales through telesales and partner feet on the street.

Many vendors say they’re going to target small business vertical markets. But I’m hard-pressed to think of another vendor that has done this type of holistic, industry-by-industry block and tackling. This has paid off for Demandforce, and should reap even bigger rewards with the added muscle and money of Intuit behind it.

3. Flying Higher Into the Cloud

Intuit has been steadily progressing from being a traditional desktop company to an online cloud services provider. This is also where small businesses are moving, as shown in Figure X. The Demandforce acquisition adds to Intuit’s cloud credentials in the very hot marketing automation area.

Figure 1: Small Business Purchase and Plans for Cloud-based Solutions

4. Serving Up SoLoMo to Main Street Businesses

Three big tech trends are reshaping businesses today: social, mobile and local. Demandforce hits all three of these bases for Intuit. On the social front, It brings together many of the social media tools into a unified service, making social media more manageable for small business to manage their interactions across social networks. In terms of mobile, Demandforce makes it easy for small businesses to engage with their customers using mobile devices. So for instance, your salon can send you a text message to remind you about your next appointment, Finally, there’s the local element. With Demandforce, small businesses can invite and collect user reviews and feedback, building up their local reputation. To date, Demandforce has helped its small business customers gather about 1.5 million reviews, which can also be syndicated out to Google, Yelp and other review sites.

Adding it Up

As I discussed in an earlier post, Intuit: From Products to Services, Applications to Platform, Intuit has already made great strides in transforming from a products to a services company. Demandforce gives Intuit the fuel it needs to more fully tap into small businesses’ hunger for solutions that can help them grow their businesses–and in doing so, accelerate its own transformation.

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