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Following brief revenue dips in March and April, many marketing technology firms experienced stronger earnings to close out Q2—and expect to be near or exceeding pre-COVID numbers in the second half of 2020. This may seem counterintuitive, as marketing spend typically decreases during times of economic uncertainty, but marketing technology has become indispensable in our increasingly virtual business landscape. As in-person sales and business development efforts decrease in both B2B and B2C environments, some companies may be cutting back on marketing headcount, but they are continuing to invest in the technologies that mitigate the impacts of current challenges and further support their marketing strategies.
Pre-sale technology—focused on customer acquisition—led the first wave of marketing technology adoption as companies were eager to leverage lead generation, digital marketing, e-commerce, and B2B sales platforms. Over time, these technologies have proven valuable for customer acquisition, but their efficacy does not always persist throughout the customer lifecycle. As such, the post-sale technology ecosystem—focused on the customer journey—is becoming more critical as consumers and businesses demand more personalized attention and experiences from the companies with which they do business.
Additionally, post-sale platforms are gaining traction as companies realize the incremental lifetime customer value they can achieve by investing in customer success and support platforms—using the technology to drive customer retention, upsell, and encourage word-of-mouth marketing on the foundation of a superior customer experience. Customer retention is more important than ever. Companies must ensure customers are successful using their products and services to capitalize on opportunities to turn existing clients into long-term, die-hard fans. Consequently, we expect continued investment in systems that remove friction and pain points from customer interactions, enable access to real-time data and support, increase personalized offerings, or otherwise bolster data-driven customer experience improvements.
We are seeing increased activity at the intersection of systems of record—like customer relationship management (CRM) systems and customer data platforms (CDP)—and engagement engines such as email marketing, social media engagement, in-app engagement, and SMS/text platforms. These “middle-ground” platforms apply artificial intelligence and machine learning to customer data (or first-party data), converting it into actionable analytics that can be used within marketing and customer engagement engines. This allows companies to have highly personalized customer interactions, driving further loyalty for B2C customers and similarly increasing customer success, usage, upsell opportunities, and retention for B2B customers.
Companies can use personalization and first-party data along with look-a-like audiences to hit target demographics with custom offers for items or services they are likely to want to purchase. We have seen increased demand for technology like this for several years in the B2C environment, but more and more, B2B customers expect similar levels of customization and individualized service offerings.
Consumers are accustomed to receiving offers for similar products to those they purchase for their households or themselves on Amazon or at Starbucks—but now, the same level of personalization is available to them as they make purchasing decisions at work. For example, if you bought software on behalf of your company, that software platform will be able to track how you are using it and what actions you are taking. They can then use machine learning and AI to analyze aggregate customer data and recognize the patterns of successful customers, helping drive marketing and communications strategies for existing and potential customers.
Technology that translates CRM/CDP data into actionable marketing analytics is a robust, growing segment of the marketing technology landscape. As the new norm sets in and consumer expectations rise, we expect to see strategics with strong pre-sale technologies begin to acquire companies to develop and build out their capabilities on the post-sale, customer success side.
Marketing and sales are vital to the success of every organization. The technology enabling these areas has always fascinated me as it can profoundly transform the long-term trajectory and viability of businesses when it is fully embraced and strategically deployed. It is rewarding to see the multiplier effect these businesses can have on the customers they serve, and ultimately the people who work for them.
Teague Collins is a Managing Director at Cascadia Capital in the firm’s Technology practice. He has over 14 years of investment banking and capital markets experience, executing a variety of M&A and financing transactions for public and private companies across the equity and debt spectrum. Before joining Cascadia, Teague was part of the Investment Banking Financing Group at Goldman Sachs where he originated and executed alternative debt and equity transactions for healthcare, consumer, and technology clients. He also previously served in the Global Investment Banking and Capital Markets group at Morgan Stanley.
Prior to his investment banking career, Teague served as a Surface Warfare Officer in the United States Navy and completed two Middle East deployments. Read Teague’s full bio here.
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