LAS VEGAS — San Mateo, Calif.-based Marketo is making a major push to sell its marketing automation platform at the enterprise level and intensifying efforts to tap business-to-consumer (B2C) customers in the process.
At the company's Marketing Nation Summit here this week, Marketo CEO Phil Fernandez revealed its biggest technology investment to date. Code named Project Orion, it is a next generation platform that enables enterprises to scale and use analytics to interact with customers throughout the journey, he said.
And even as it explores “strategic alternatives,” including a potential sale of the company, Marketo remains focused on a prize it first publicly conceded it was eying two years ago: growth in the B2C space. Fernandez believes there is alignment between techniques and systems that grew up in the B2B world to consumer marketing applications.
Tapping Global Customer-Centric Strategies
Marketing automation platforms help companies monitor performance of marketing campaigns and score leads — a methodology that enables companies to rate prospects against a scale that represents the perceived value each represents to the organization.
Long the darling of B2B marketers, Ferndandez said marketing automation also taps the desires of consumer marketers to stay engaged with their customers.
In its most recent annual report, Marketo notes that its Engagement Marketing Platform "offers a unique blend of power and speed that is appealing to business to business (B2B) and business to consumer (B2C) customers across both large enterprises and Small and Medium Businesses (SMBs)."
In fact, Consumer Marketing — which "helps B2C marketers target and acquire the right consumers, engage them seamlessly across all channels, and deliver relevant messages to build loyalty" — is one of the company's five business solutions for 2016. The others are email marketing, lead management, customer base marketing and mobile marketing.
While a significant majority of Marketo's revenue is derived from companies in the B2B market (largely in the technology industry), the company wants to further penetrate the B2C market as well as vertical industries outside of the technology industry, such as healthcare and financial services.
B2C Risks, Opportunities
Marketo's push into B2C is more than an altruistic effort to advance customer-centricity. The company acknowledges that its continued growth depends on it.
From 2013 to 2015, Marketo's annual revenue grew from $95.9 million to $209.9 million. For the three months ending March 31, its revenue grew to $62.2 million from $46.0 million during the prior period. But in its recent quarterly report (10K) filed with the US Securities and Exchange Commission, Marketo acknowledges that it expects its revenue growth rate to decline "even if our revenue continues to increase in the future."
Expanding B2C marketshare (and entering new verticals like healthcare and financial services) therefore creates significant opportunities. But it also opens the company to certain risks. As Marketo notes in that 10K:
"We have less experience in this market and these industries, and expanding into them may require us to develop additional features for our products, expand our expertise in certain areas, and add sales and support personnel possessing familiarity with this market and the relevant vertical industries.
"In addition, B2C customers may have greater usage requirements during their peak selling seasons which could put pressure on our systems and infrastructure and require us to expand these systems and infrastructure to meet increased demand. As a result of these and other factors, our efforts to expand further into the B2C market and into additional vertical industries may be expensive, may not succeed and may harm our revenue growth and operating results."
Hakkasan Las Vegas Meets Marketo
To demonstrate how Marketo connects with B2C customers, the company offered the example of Hakkasan Las Vegas, a restaurant and nightclub in the MGM Grand Hotel here that sprawls over five levels.
The nightclub, occupying the fourth and fifth floors, offers oversized VIP booths surrounded by a dance floor; a custom DJ booth and suspended performance platform, all enveloped with floor to ceiling LED screens; and areas for VIP guests to experience a more private environment while still having access to the dance floor.
Marketo held its Marketing Nation Gala here Wednesday night. But it's connections run deeper: The Hakkasan Group, which employs about 4,000 employees, recently connected with Marketo to enhance its B2C marketing around customer experience, said Tracee Nalewak, Hakkasan’s executive director of marketing.
Trying to Scale
The Hakkasan nightclub brings in around 500,000 customers and about $100 million a year. Nalewak said it began partnering with Marketo two years ago to help it scale, access deeper metrics and connecting all of the data with its live events and productions. So far, Marketo has run about 700 campaigns for the venue, Nalewak, said.
Nalewak said the team started with customer journeys by building 50 to 60 customer personas — everything from intent, transaction history and how frequently people come. In beta testing, Nalewak said Marketo's involvement helped drive a 70 percent increase in open rates on emails, which had open rates around 10 percent.
Jesse Fowl, the founder of Solomon Solution, a marketing engagement firm, works with Hakkasan on Marketo strategy and implementation. Fowl described how they envision the customer journeys at the nightclub, focusing on concepts like attraction, intrigue, reveal and commitment to return. Everything from separate entrances, style of the music, the look and feel and seating were taken into consideration.
By considering the customer experience before guests arrive — as well as how the guest list is organized, which entrance customers use to enter and what sort of music fills each space — they increased customer engagement. They also follow up with customers, perhaps by sending them a photo of their evening, Nalewak said.
Listening for persona information and history, the club can also make recommendations on future events, if a particular artist will be coming or when special promotions happen.
“We basically give them little pieces of [information] at a respectable intervals,” Fowl said.
Marketo's Revvie Awards
Marketo's interest in B2C was captured in the selection of winners of its annual Revvie Awards. The awards highlight the most creative Marketo customers, partners, and individual marketers who found innovative ways to attract and engage customers, propel their companies to new growth and success, and inspire others, the company explained.
Pluralsight, which offers online training for developers and IT professionals, won marketing team of the year for its use of Marketo to scale its programs and provide a more personalized experience for customers. Marketo's agility as a B2B, B2C and hybrid marketing platform allowed Pluralsight to increase its year-over-year B2B opportunities by 168 percent and B2C sign-ups by 184 percent, Marketo CMO Sanjay Dholakia said.
Several other winners, including Laureate Education Inc., a network of more than 80 campus-based and online universities across 28 countries, which deployed Marketo globally to create personalized experiences for new and current students, and Cancer Treatment Centers of America, which designed a personalized, responsive campaign to deepen customer relationships, are also B2C businesses.
Title image by Aaron Garcia.