AdExchanger: What’s your philosophy around assembling a marketing stack?
RYAN BONIFACINO: We have a venture mentality where we’re using really expensive ad-tech platforms, technologies, services, agencies and firms, but we also couple those investments in the form of our service agreements with the smaller names that we feel have potential.
One of those smaller firms is the email marketing/CRM provider Sailthru. How did you happen upon them in a competitive landscape that includes several bigger names?
We did a management consultant-guided reverse engineering of the market. We identified the top 500 ecommerce retailers in the US. Of those retailers, how many have their own stores? Of those that have both sides of the direct and in-store business, how many also sell wholesale? We have unique challenges being on both sides. Also, the manufacturing component adds a different approach because we’re looking at data down to the supply chain level, as it relates to anticipating demand. The management consultant who guided us through that process asked the tough questions and educated my team to the point they knew more than the sales reps.
A lot of those big email guys were eventually acquired and incorporated into bigger marketing suites. How did that affect the evaluation process?
It was an interesting experience. As those companies were acquired, you see the sales tactics of the larger enterprises that now back them. Without naming names, [a company] that sells ERP solutions will take an aggressive approach to sell you everything under the sun as if they’re a one-stop shop. That’s often not the case.
When it came to the selection process, we weren’t satisfied with the way the products were sold because it was sales heavy and not product heavy. We really wanted to take the venture mindset and ask the same questions any VC would ask.
What are some of those questions?
How quickly are you gaining market share and from which competitors? How quickly are you burning through cash? What investors are behind you and who is on your board? How do you ensure your top talent is not being poached by your competitors? Really identifying the way they badmouth others. I remember having two of those big [enterprise solutions vendors] telling me two different things about their selling points, and I said, “I don’t believe what you’re saying. Do you mind if I grab [your competitor]?” I brought them on the line and let them duke it out. So they duked it out, and both of them were lying. Well, not lying outright but using highly manipulative sales tactics to bash the other.
Going through that sales process was a jaded experience for us. We got away from the product people and talked to the Forresters of the world and decided how to do the weighting for our own selection, given our own unique requirements.
And this led you to some smaller vendors?
We found there wasn’t anything out there that satisfied the space. We weren’t just looking at email marketing. We wanted to centralize our CRM and our longtail attribution with one firm. We wanted to apply site-side analytics gathered by that firm. Those were two unique requirements. And I wanted to honor the eco-friendly commitment of the company and provide electronic receipts to the customer. It just so happened that our customers are so into this idea of electronic receipts, it ended up resulting in 90% capture rate of email addresses at the point of sale.
How did a best-of-breed buying philosophy help you there?
As far as the transactional messages, we decided to take advantage of that modeling opportunity. Instead of having the receipt coming from the POS and not capturing anything, let’s send it through the ESP (email service provider) and annotate information in that record to identify the areas we get value with that extra data. We disclose this information to the customer and we’re sensitive to the privacy behind it. We’re anonymizing this data, which is patched back into a hashed record at the CRM level.
We can model the offline to online journey and get operating system information, geographic information and make assumptions about household device pairing. When one person arrives home and their device has a Wi-Fi ID, we can make assumptions about the other tablets and computers in the household attached to the same ID.
When you’re deciding whether a vendor can actually help with these types of marketing initiatives, to whom do you speak?
When I was in finance, following an experience in Silicon Valley and the ad-tech venture fundraising world, part of my diligence with groups like Sailthru is it’s not about talking to the product people or the sales people or the CEO or the investors. I want to talk to the data scientists.
Is it easy to access the right people so you can have those conversations?
Now that they’re under the wings of Oracle and Salesforce, it’s harder for mid-sized retailers to have meetings with heads of industry and thoughtleaders in this space. I put a lot of value in having the conversations I used to have with proprietary equity traders who managed hundreds of millions of dollars. It’s the same type of philosophy: to sit back and have a drink and talk about forecast accuracy and dispersion models.
I don’t know if we have any competitors with in-house teams that have those discussions, that aren’t supported by agencies. Though we’re not trying to build an in-house agency. We understand the importance of aligning and scaling with those teams.