Editor’s note: How are martech solutions evolving, and what is driving the way this software is changing? What is its impact on customer data? We spoke with Peter Reinhardt, co-founder and CEO of Segment, a platform to connect, integrate and activate marketing and customer data. Peter is a former aerospace engineer and has considerable experience building marketing technology stacks. In this interview, he shares insights for the direction of sales and marketing software and advice for CEOs about investing in martech solutions.
What are the big trends now in how marketing and sales technologies are changing?
Peter Reinhardt: The broad theme right now in sales and marketing is automation, and it is changing the way these departments work together on a couple of levels.
First, the sales team is becoming less involved at the top of the funnel. Automated advertising and email marketing has largely taken over the role of generating awareness, building interest in new products and creating leads. It will still be largely up to the salesperson to do strategic work of converting new customers, but marketing is definitely eating up more of the sales process. Atlassian is a great example of this change in action; its sales and marketing team has a substantial automation component. Its salesperson is usually only involved at the very end of the process to make sure of closing the deal.
Second, marketing is expanding to cover more and more parts of an entire business including the renewal process, product development and customer support. This is because marketing strategies now must involve the entire customer experience and all the data it creates, as opposed to just generating awareness. Automation is playing a big role here, too, helping to expand customer relationships, especially when there are customers that are renewing or want to try more of the company’s products. It’s changing the product in such a way that it automatically generates more awareness inside the product.
A good example of this is Slack. Its customer success department actually reports into the marketing function. Its marketing stack is built to be a part of its customer’s entire experience.
As a CEO leading a company’s marketing and sales teams today, is there an important mindset, behavior or tactic that is different now than one or two years ago?
Peter Reinhardt: CEOs need to empower the marketing function and make sure that all their customer data, from any department, is structured and accessible. Previously, businesses had a sales representative or an account manager who solely managed customer relationships; however, customer data can’t just be in a salesperson’s head anymore. The amount of data and activity generated today means that a much deeper analysis around the customer experience is required, meaning that companies need an automatic marketing function.
From a leadership perspective, in order to have the high-efficiency sales teams that Atlassian has, a CEO must think about how to automate human processes, based on their structured customer data.
Is your advice for CEOs about marketing different according to the size of the company or the kind of data they have?
Peter Reinhardt: The strategy is different. In a company’s pre-scale phase (less than 50 employees), leaders should be focusing more on quantitative questions, trying to figure out what problems they are trying to solve, what solutions they have, etc. A smaller company actually needs a heavy manual component to put everything in place. They should be figuring out what their sales and upsell processes should be, and whether they are even ready to engage in those processes.
When a company actually starts scaling, then, at that point, it needs to double down on structuring customer data and using the data to automate a lot of processes across sales and support.
For CEOs that are trying to plan for investing in software for the next couple of years, how can they plan to strategically invest in marketing technology while the marketing technology is quickly evolving?
Peter Reinhardt: This is the problem everyone is trying to solve. There are so many different tools in the marketing stack that companies have a hard time managing different channels and creating automation. Also, the cost of integrating and maintaining all of these tools, when data is decentralized, is enormous and makes things very difficult.
In my opinion, the most important thing for a business is to make sure that a company’s data, from all different channels, is in one place. When deciding what software to invest in, a company needs to choose a solution provider that basically acts as a central customer data hub. That way they can pull in data from all their different channels and distribute it to all their tools. A company’s marketing process needs to be just pushing buttons, rather than writing a lot of underlying integration software.
So integration of data is the biggest concern in selecting a software solution?
Peter Reinhardt: Exactly. From a strategic perspective, the CEO’s question is how to get a customer data hub in place so that they can move data around and integrate their systems effectively. Sales and marketing technologies are changing constantly. This setup will ensure that a company has the necessary flexibility to migrate between different tools in the marketing stack as technologies evolve.
Peter Reinhardt is co-founder and CEO of Segment, a company backed by Y Combinator, Accel and Thrive Capital that helps over 8,000 companies connect, translate and activate their customer data. He blogs at rein.pk; reach him on Twitter.