Take 5: Eloqua CEO Offers Outlook On Emerging Solutions & Challenges

DemandGen Report was on-site for Eloqua’s first user conference earlier this month in Las Vegas and had the opportunity to sit down with Payne to discuss his priorities for Eloqua heading into 2009, as well as his outlook on the marketing automation category.

Payne stressed that Eloqua is listening closely to its customers’ requests to makes its solutions easier to implement and use through its SmartStart program, and also offered some glimpses into the company’s expansion plans going forward with sales widgets and the expansion of their best practices templates. The following interview highlights some of the key points of that discussion:

DemandGen Report: One key area of emphasis from your opening presentation was the company’s intense focus on making the solution easy to use. Can you expand a bit on the drivers behind that and also how you plan to communicate those improvements in the market?

Payne: That is a critical part of what we want to talk to new customers about, certainly. Our existing customers have asked for our help in providing a faster time to value. As I did the research with my team to understand why customers weren’t getting to value faster, invariably it came back to new customers not knowing how to best implement their solution – for example, not understanding how to create a demand generation or lead scoring program.

While customers know they need lead nurturing, they often don’t know exactly what that means. They are uncertain of how many programs they need and how their program should be structured. As one way to address their issues and answer their questions, we’ve introduced the SmartStart program. SmartStart literally pairs new customers with our experts for five full days of 1:1 consulting services. During this time, we integrate their Eloqua solution with their CRM system. We also build their lead scoring program with them side-by-side, making those tough decisions right then and there. We build their first lead nurturing program and load all of Eloqua’s best practice templates to their database so they can have quick time to success.

When they leave after 5 days they are fully up and running. I have personally talked to a number of the SmartStart customers and they are stunned by how much they were able to accomplish in just 5 days.

The best practice templates are a real differentiator for Eloqua. These templates are built into the application. So right when you get your new instance of Eloqua, it already includes all of our best practice templates. I think right now there is something like 28 of them and that number literally grows every week because we have a content team building new ones. For example, there are 8 email templates, 4 lead scoring programs, 3 nurturing programs and all of those in there can be edited and customized.

The last thing is something we call One-Click CRM Implementation. This is an example of the flexibility that Eloqua offers. In years past, we would say ‘how do you want your CRM integration to look and what fields do you want to map,’ and customers wouldn’t know the answer. We’ve found that half of our customers simply want standard, out of the box CRM integrations. So One-Click CRM Implementation is perfect for that because it is just a standard mapping of fields. There are still another 50% of our customers that will want to build a lot of custom fields and do different mappings, so we still offer that.

If you combine the One-Click integration with SmartStart program and with all of the best practice templates, people buying Eloqua today are up and running in a matter of weeks and are very happy with the results. And that has a lot to with us changing our processes, a little bit of change in product, but mostly changes in processes and how we go to market with our customers.

DemandGen Report: Give me your sense of the marketing automation category. When we spoke a year or so ago you pointed out that there was a new competitor seemingly popping up every month or so. How do you see the competitive landscape unfolding? Is the marketing growting at the rate you expected and is there enough growth out there to support all of the vendors?

Payne: The market is growing exponentially. Three years ago many marketers had never heard of demand generation or lead generation tools and now there is this sense of ‘I need to know this and I need to have it.’ And it’s viral because they talk to other marketers and say ‘what are you doing?’

In any good market, there is going to be a lot of competitors and we have lots of competitors in this market. The difference from a year ago is that there are 6 more competitors than there were last year. When we spoke last year, I said it feels like every quarter there is a new competitor out there, and this year has been no different. We’ve seen new companies like Marketbright, Pardot, and Marketo--all three are new this year in the first three quarters. And then there’s Vtrenz, Manticore and Market2Lead and probably a dozen more, and everyday someone sends me a new link for another new one.

What I am proud to say is in that year we have added more business than any other competitor and probably more than most of them combined. We are still bigger than all of the other competitors combined.

One advantage of being bigger is this year we hired a guy named Dennis Damon, a deliverability expert who sits on all of the major world panels, and anti-phishing and anti-spam working groups. So he has contacts that ensure that when Eloqua has a deliverability issue or needs deliverability consulting for one of its clients, we literally have the top people in the world working on it. That’s an example of how being big can help you. You can’t afford a Dennis Damon when you are a 40-person company. You can’t afford that until you are around a 200 person company, because otherwise every guy you have is writing code.

Dennis just flies all over the world and meets with the spam community and makes sure that our stuff doesn’t end up in spam boxes. That’s a significant advantage for us. Our customers’ email campaigns are only good if they end in the inbox. All of those little guys probably have double the bounce rate that we do, just because we have deliverability relationships, warm IPs and Dennis working very hard for us.

The other advantage of being big is Eloqua Experience. This event is a real advantage for our customers in that they are able to come together and share ideas and best practices with others. In an emerging market, understanding what other people are doing is really important. Being big does have advantage in this space, which accrue to the customer.

DemandGen Report: You talked a bit in your opening remarks about the impressive growth Eloqua has been able to achieve. Do you think that is sustainable and do you see significant growth remaining for the category or do you think you are going to outpace the category?

Payne: For us, there is a real silver lining in that Eloqua is in the part of the marketing budget that is the most measurable and we help facilitate one-to-one communications with customers. So in that scenario, I think we have a good chance of getting through these kinds of tough economic times even stronger than we are today.

We are outpacing the category and we will continue to do that as long as we continue to improve our product and user experience. But there’s pressure on us to make sure that we continue to innovate. We cannot sit our laurels. Customers want things faster, easier, they want more content and there are lots of smart people out there trying to build these solutions as well. So they keep us on our toes.

DemandGen Report: Can you tip your hand about where those next innovations will come from. We’ve talked in the past about making marketing automation more sales oriented, do you see new applications emerging there?

Payne: We are building some really interesting sales enablement pieces and you’ll see some interesting sales widgets. The thing about rich internet applications and this new API we have is that we can build widgets that actually sit other places that pull Eloqua data. So I think you are going to see an interesting sales widget from us next year.

Our number one focus is to make it easier for the marketer. This is a complex task, automating demand generation and you need a tremendous amount of power and flexibility if you are going to address all of the different verticals that we are addressing. AviationWeek has a very different business model than Sourcefire, who has a very different model than Forrester or the Portland Trailblazers.

Today we are a horizontal application and we need to have the flexibility to serve all of those clients. But, on the other hand, for the really simple straight-forward stuff like managing events or sending out an email campaign, we need to make it simple so that as we grow, users in our client base are able to deploy Eloqua as easily as they would Google’s Gmail. We would like to make it that simple. It’s a complex problem, so that’s not easy to do, but we are dedicated to making it simpler for our customers. So you are going to see a lot of continued ease of use improvements.