Interview With Eloqua CEO Joe Payne

Marketing automation vendor Eloqua is coming off a busy few months. In August, the company issued its IPO; the stock, which went public at $11.50 a share, currently trades around $19. Last week, Eloqua followed up with its biggest user conference to date, including more than 1,500 customers and partners.

Demand Gen Report sat down with Eloqua CEO Joe Payne last Thursday for the following interview. We covered a lot of ground, including three topics that we'll share here today: Eloqua's take on mobile technology, the company's move towards industry-vertical solutions, and its approach to the SMB market.

Eloqua's Mobile Strategy

Demand Gen Report: This week, Eloqua generated a lot of buzz when it announced support for email templates that automatically resize for mobile displays. What other changes are you considering to adopt to mobile technology?

Joe Payne: It's clear that our own customers use their mobile devices more frequently than ever to do their jobs. We're going to keep adding more mobile-enabled tools, including more reporting tools, so that the marketers that use Eloqua can take advantage of this.

We know that you're not going to design a campaign on an iPad. But what you will do is use an iPad to do things like check the results of a campaign that you're running right now. So that's how we're setting our priorities.

Second, we see that salespeople are increasingly using iPads rather than traditional laptops for their day-to-day activities. That's where our app strategy proves its value, as well as our sales tools like Eloqua Engage on the iPad. Salespeople don't have to spend a lot of time learning how to use these tools. They log in once, push a button and do what they need to do.

Industry-Specific Marketing Automation

DGR: In mid-October Eloqua introduced a marketing automation solution designed for the asset management industry. What role will vertical solutions play in the company's future product plans?

Payne: It's a critical part of our growth strategy. I think most marketers consider themselves industry marketers -- not horizontal marketers. In other words, if you're marketing for the Philadelphia 76ers and lose your job, you're not going to go work for Wells Fargo. You'll try to find another sports marketing job. As a result, our customers tend to see their needs as being unique to the industry where they work.

Having said that, we're not going to rush into this -- we're not going to work our way down a list of vertical solutions just because we can. Instead, we're looking at our current customers in specific verticals to learn more about their needs. In asset management, for example, we already had six or seven major customers in that industry using Eloqua before we ever thought about doing a vertical solution. We asked: "What are you doing and how are you doing it? How does Eloqua help, and where are we not yet doing what you need?"

The other thing about our vertical solutions is that it's not just about the technology. It's also about best practices and about content – things like templates for nurturing programs.

DGR: Where might that approach take Eloqua as it explores new vertical opportunities?

Payne: We're seeing a lot of growth in segments of financial services – although we're not treating that as a single vertical because it's such a diverse space. We're looking at insurance, and we might even break down asset management into additional sub-verticals because there are different kinds of asset management.

Manufacturing is another very interesting area. We're already working with clients like Dow Chemical and Caterpillar, and we think that's a big opportunity.

Here's the thing to keep in mind: Outside of information technology, marketing automation has less than 10% penetration in almost every vertical. So we'll continue to follow our "bright spot" strategy where we begin with our existing customers, understand their specific needs and then do these key verticals one at a time.

Eloqua And The SMB Market

DGR: Another way of looking at the market is to approach it by customer size – enterprises versus small and midsized firms. It's often assumed that Eloqua targets mostly enterprises, but is there any interest in focusing more on the SMB market?

Payne: The reason people think we're focused only on the enterprise is because our competitors keep telling people that! In fact, 60% of our customers are what we consider SMB, which we define as less than $300 million in annual sales.

Specifically, we think the sweet spot for us starts at about $10 million in sales and up. Once you go below that, it's a tough market with very high attrition rates. So our focus is more on the mid-market opportunities.

DGR: What is it about the mid-market that gives you an advantage there?

Payne: There's a very good reason why I think Eloqua works so well with these kinds of clients. Most of our enterprise accounts start as something closer to a mid-market account. What I mean by that is we'll start working with one division of a larger company. They need to get up and running quickly, they expect fast results. They demand a solid experience with on-boarding, service and support.

Those customers might be a $20 million or $30 million division, and if we can sell them we can expand into additional divisions and turn them into a true enterprise client. The same capabilities that allow us to win these clients also gives us strength in the mid-market as a whole. We have to be good at the things these companies want because most of our enterprise clients start the same way.