This week, we have received a lot of questions from our clients, potential customers and friends asking us two questions:
- How do we feel about the acquisition of ExactTarget by Salesforce.com?
- How did they get that kind of multiple? (Salesforce.com paid $2.5 billion with ExactTarget’s expected revenues of $120M for fiscal year 2014).
How do we feel about the acquisition?
As a company, we couldn’t be more pleased!
A year ago to date, we made the decision that we would no longer take clients on without a marketing automation implementation because of the productivity increase we witnessed with our first three implementations. We have done a dozen marketing automation implementations over the past 18 months for our clients. 100% have been with ExactTarget’s Pardot, and 90% have been with Pardot and Salesforce.com. So to pat ourselves on the back, we strategically picked the winners for our customers.
This acquisition is going to make our ability to serve our clients even more productive and powerful, especially as Pardot and Salesforce.com start to fold even more powerful Social Media and Analytics Tools into the mix over the coming years.
How did they get that kind of multiple?
Marketing is undergoing a radical and accelerating transformation where more and more products and services are bought and not sold. This is because self-directed B2B consumers can now leverage a broad variety of digital content instantly available to provide the information they need online.
As a company, this means you now need to fundamentally change how you engage with prospects and customers, which requires a new kind of technology solution – one that allows you to create ongoing dialogue with your buyers across channels. A technology solution that allows your sales team and your marketing team to focus on the needs of your buyers is critical. The combination of Pardot and Salesforce.com makes it easier for your teams to serve your buyers and to hold each other accountable with deep insights and analytics. The combination of Salesforce.com and ExactTarget and Pardot simply make serving this new buyer easier for your sales team, your marketing and your executives. ExactTarget got that multiple because the combination of Salesforce.com and Marketing Automation works for its customers.
Here are several supporting pieces of data:
Market Adoption of the integrated platforms (across both CRMs and Marketing Automation) is still somewhere between 14% to 18% depending on whose numbers you look at. Of those with the platforms (and this is anecdotal talking to other marketers, service firms etc. that we know), less than 25% of the companies using the platforms are pushing them hard and with focus, which means we are still early in market adoption.
It takes about a year to 18 months to have your engine humming, but once it is, we are seeing three significant jumps in conversion numbers.
- Leads properly nurtured convert to Sales Accepted Leads with far less outbound phone calls. With no nurturing, it would typically take 850 to 1000 phone calls to put the same percentage of Sales Accepted Leads you can now put in the pipe with only 120 to 200 phone calls. This makes for an 8X increase in the efficiency of the middle stage of your pipeline development.
- This also transfers to closing at the bottom part of the funnel. Well-nurtured leads are converting into 3X more closes. This doesn’t happen overnight, but when it does, teams are pumped.
- Combining the two points above – according to several studies we have seen, (and some of the numbers we are seeing internally) within 18 months, companies that have done solid implementation are seeing a 157% increase in sales and a lower cost of sales %.
Analysts are predicting that the CMO is expected to spend more on technology than the CIO by 2017. And, according to one analyst report we read in one fell swoop, “Salesforce did what it had to do so they now can call their solution the first Marketing Cloud.”
If you are struggling with your marketing automation implementation, struggling with getting your sales team fully integrated, or just curious and want to learn more, feel free to contact us for a quick consultation to learn more. You can also download our whitepaper Increase Revenue by 157% with Integrated Sales and Marketing . Or check out this quick video for more details about Why Did Salesforce Pay 2.5B for Exact Target?
