By Matt Heinz, President of Heinz Marketing
Earlier today Lattice Engines (a leader in the predictive analytics space) announced $28 million in new funding (bringing their total haul to $75 million in venture capital).
Predictive intelligence has gained far greater prominence and coverage thus far in 2015, with initiated coverage by Gartner, IDC and Forrester as well as significant advances in adoption by leading B2B companies. Other companies in this fast-growing category include 6Sense, Mintigo and Infer.
As far as I’m concerned, predictive is one of four “table stakes” technologies for B2B sales & marketing organizations moving forward (joining CRM, marketing automation and weighted campaign attribution tracking).
I asked Brian Kardon, Lattice’s CMO, to help put the investment in context and talk more broadly about the accelerating predictive space.
First, three facts about Brian:
- He was recently named a Top 10 Global CMO for companies with <$250M in revenue
- Twitter named him a Top 10 CMO (@bkardon)
- He plays a mean tenor sax in a “kickass” (his words) Latin band in Boston
Brian, why do you think investors are so drawn to the predictive space right now?
VCs have seen some pretty sensational returns from their investments in marketing automation. More than a few companies have reached that billion dollar “unicorn” valuation threshold like Marketo, Hubspot, Exact Target and Eloqua. Investors inevitably ask “what’s next?” I think they are betting on multiple martech categories, but the interest in predictive analytics is strong and driven by a few things:
- Business impact
Early adopters of predictive analytics are seeing impressive results. Companies as diverse as Dell, Staples, FireEye, Amazon, PayPal and DocuSign like what’s happening with predictive marketing and are driving adoption across their organizations. They are also sharing their success with other marketers. It’s no longer the secret of the few. Predictive marketing has jumped from the early adopter stage to early majority stage.
- Harnessing big data
The volume of data coming at marketers is far more than any human can handle. Think social, mobile, location, web searches, marketing automation’s behavioral data, etc. Predictive analytics brings all the data into one place and deploys analytics solutions across all your data, so you don’t have to wrestle with the “data in multiple silos” problem. Top companies are using machine learning and data science to make sense of it all – in real time.
- Analytics and decision-making at scale
Organizations have been talking about creating a “data-driven culture” for as long as I can remember. But it takes the right tools to enable that. Trust me on this – Microsoft Excel is not that tool. We finally have a set of tools that are easy to deploy and built for marketers, not data scientists. The democratization of data science is here.
- Diversity of use cases
Some of the early predictive applications were focused solely on predictive lead scoring. I call this the “curse of abundance” problem: I have too many leads; which ones should I pursue? Frankly, not everyone has this problem. Predictive marketing can solve so many more sales and marketing issues across the funnel, including: 1) finding new prospects that you don’t have in your database; 2) account-based marketing: finding accounts most likely to buy; 3) cross-sell/up-sell: finding customers most likely to buy more; and 4) retention: finding customers most likely to churn.
It’s clear that the predictive category is growing at a rapid pace. How do you get more B2B companies to adopt predictive as a core part of their martech stack?
By far, the most important factor is customer success. Marketers know and trust other marketers to recommend (or dis) a technology. If we, as an industry, are committed to making our customers wildly successful, the category will grow.
Let’s say I’m a CMO trying to explain the potential and need for predictive analytics to my CFO and CEO. Help me make the business case….
What’s the biggest drain on sales and marketing productivity? It’s time wasted on a prospect who will never buy. Predictive analytics tells you who will buy, what they will buy and when. The core value is focus. You focus on only those prospects who are predicted to buy. It’s the Pareto 80/20 principle of the “vital few” where most of your revenue comes from just a small number of customers. If you can identify and focus on them, you’ll win big. What are the proven results? Higher win rates, faster deal cycles and lower selling and marketing costs.
One of the challenges we hear often from B2B marketers is around the increased complexity and technical nature of strategy & execution these days. What are you recommendations to both C-level marketing executives and their teams to get more comfortable and active with predictive and other advanced martech opportunities?
A lot has been written about the pace of technological change. As I read and observe, I am drawn to Kurzweil’s Law of Accelerating Returns where the pace of innovation is increasing at, perhaps, an exponential rate. The implication for marketers is profound. There is clearly no shortage of cool new technologies to demo. Scott Brinker’s iconic Marketing Technology Landscape (http://chiefmartec.com/2015/01/marketing-technology-landscape-supergraphic-2015/) really says it all – a doubling of martech companies in one year, from 947 to 1,876. You could spend your lifetime talking to vendors and checking out demos. Please don’t.
I have two suggestions. First, talk to other marketers about what is working for them and what’s not. From my experience, marketers can be exceptionally generous and candid sharers. And they can save you lots of time, money and heartache. Second, it’s important to have a solid marketing tech foundation on which to build your stack. If you put too much technology on top of a shaky foundation, things will inevitably topple over. Get your CRM and MAP working well. Even small B2B companies are now employing 20+ marketing technologies – and no two companies seem to have the exact same stack.
With great funding comes great responsibility. What does the next 1-2 years look like for Lattice? What will you be working on and launching next?
We have four priorities. First, we want to accelerate our leadership position with innovative, exciting new products that people love. So, investments in the user experience, security, product performance and the engineering talent to deliver that are key. Second, we have a global partner eco-system that we want to continue to grow and nurture. Third, we are investing in sales and marketing to continue our strong growth trajectory. Last, we are committed to customer success and exceeding expectations through our experienced and responsive global team.