Folloze, an Account Based Marketing (ABM) sales platform, has closed $7.3 million in funding, it was announced on Thursday.
The investment was co-led by Canvas Ventures and NEA, the lead investor in the seed round, with participation by Cervin Ventures and others. With this latest round, Folloze brought its total raised to $10.5 million.
Folloze is in the account-based marketing, or ABM, space, which marries marketing and sales, empowering sales people to become digital marketers themselves, while still staying on corporate message and without changing their work habits.
The company creates a new "contract" between marketing and sales, shifting from the big funnel model, which is broken, according to David Brutman, Chief Product Officer and co-founder of Folloze.
"Think about the way that marketing works. There's the funnel where sales people get leads, then salespeople convert them to qualified leads, which then convert to become opportunities. This funnel has proven to be extremely inefficient. While lots of dollars are spent getting to the bottom of the funnel, only a small fraction of sales actually come from that funnel," he said.
Most leads are small businesses, which aren't effective in driving big revenue, but sales people want to want to after large companies.
"This misalignment, which means a lot of efforts going into the funnel, but revenue coming from a different place, means the market is broken," said Brutman.
AMB solves the problem by allowing sales and marketing to align to create account-based campaigns for sales to operate at scale, for a specific account or customer situation. The sales people identify the key accounts, and the role of the marketers is to create messages, and templates, that will help those salespeople more effectively do their job.
This is benefitial to salespeople, since it turns them into mini-marketers, as they own the relationships with their target accounts.
"On the buyers side, they have high bars for salespeople. The old tactics of reaching out, like cold calling, and spam emails, are not working anymore. We want to get value from our interactions, and talk to a salesperson who is educated, and can help them through their journey. ABM is helping them elevate the discussion with customers," said Brutman.
"ABM is the biggest transformation in marketing in the last decade."
So far, Folloze has signed a few dozen clients, some in the Fortune 500, including Microsoft, and some mid-sized companies as well.
"Our typical customer is one with a pretty complex sales process. They will sell a product or service that leaves quite a touch, and which requires education, and multiple people to make a decision," said Etai Beck, CEO of Folloze.
That includes companies in tech, pharma, manufacturing, and professional services. One company that uses Folloze is Xirrus Wi-Fi, which was able to use it to ensure that "every person can run their own campaign," he said.
"Using ABM they got a higher volume of marketing, that was more targeted and on corporate message. The templates and campaigns and messaging allowed marketing to create a standard, and for sales people to do their own marketing push."
The main ROI for companies who use Folloze is to increase and improve their pipeline, and companies have seen as high as 3x their marketing volume, and 4x to 6x higher response on their campaigns, as a result.
"On the buyer experience end, ABM provides lots of value, which helps them understand what they need to solve. Many B2B products, part of selling is education. If it were simple to buy, they'd just open website and sell. Customers need advice when buying tech, and even more in the pharma or healthcare space, which require expertise," said Brutman.
"Our platform puts in the hands of salespeople a library of knowledge that they can deliver in an effective way. It is much more education oriented and that's a powerful thing, selling knowledge."
For that reason, many more companies are starting to embrace ABM, with double the customer adoption in 2016 compared to 2015, and more than 70 percent of companies now using it to drive revenue.
Folloze will use the new funding to expand its team. Its engineering team resides in Israel, while its sales, marketing, design and products team are in Palo Alto. Both offices will be expanding; the company expects to grow its current 15 to 20 employee team by 50 percent.
As it grows the team, Folloze will also look to support more platforms, and to extend its functionalities.
"ABM is an evolving category. There's a lot of innovation you can bring to the market, and the category is in the process of being defined," Brutman said. "Adoption of ABM doubled from last year and now two-thirds of CMOs that are seeing that ABM is significant. That will lead to more innovation, and even though we cannot disclose out roadmap, there are a lot of surprises that we can bring to elevate what salespeople can do."
Looking down the road, Folloze wants to become a leader in the emerging ABM market.
"We strongly believe that ABM is going to become major category and that we will see significant budget shifts from traditional account based marketing. I wouldn't be surprised to see half or more go to ABM. This is in transition, and there's an opportunity for disruption. There will be a new set of leaders, and see ourselves as being one of them," he said.
"As the founders of our company, we have both lived this problem, and we feel strongly that we understand the space deeply. We understand our customers, and we partner with them on the basis of this understanding. The people we bring to the team, our customer success people, are marketers in their education. Our sales and marketing people will bring and understanding of the fundamentals. We pride ourselves on being faithful to the values we teach our customers."