Businessmodel of Marketo

Customer Segments

Marketo has a mass market business model, with no significant differentiation between its customers. The company targets its offering at enterprises across industries that want comprehensive marketing automation software. Its customers are most commonly found in the consumer, business services, financial services, manufacturing, healthcare, technology, media, and telecommunications sectors. They include both small and medium businesses and large firms.

Value Proposition

Marketo offers three primary value propositions: accessibility, performance, and brand/status.

In addition to its basic suite of applications, the company maintains the Marketo Marketing Nation, a network of over 550 third-party solutions and 60,000 marketers who share their expertise. The feature provides customers with access to a broad range of knowledge and capabilities.

The company offers enhanced performance over other marketing automation software solutions. Its technology infrastructure offers a secure multi-tenant Cloud-based platform. It uses leading software and hardware parts and modern systems architecture, which allows it to incrementally expand computing capacity as adoption of its product increases and its customer base grows.

The company has established a strong brand because of its performance. As of December 2015 it served 4,549 organizations of all sizes across many industries. It has also won numerous honors. These include recognition as one of Forbes’ “Most Promising Companies” (2011), winner in the Marketing Solutions category at the CRM Market Leader Awards (2012), winner in the Marketing category at the AppExchange Customer Choice Awards for three years in a row, and placement at #1 among marketing software companies in the Inc. 500 ranking (2012).

Channels

Marketo’s main channel is its direct sales team, which primarily operates out of Atlanta, Georgia; San Mateo, California; Dublin, Ireland; Sydney, Australia; Tokyo, Japan; and Farnborough, United Kingdom. The company also utilizes distributors, resellers, agencies, and original equipment manufacturers, who resell its solution to their customers. It promotes its offering through its social media pages and participation in conferences and summits.

Customer Relationships

Marketo’s customer relationship is primarily of a self-service nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website includes a variety of self-help resources, including webinars, live demos, and various tools. It also provides the following for paid customers:

Customer Community – This section includes detailed “how-to” write-ups, videos, discussions, Marketo Support Knowledgebase articles, and answers to frequently asked questions.

Marketo University – This section includes a library of courses that covers industry best practices and the most recent Marketo features. It also features learning materials for Marketo customers who want to become certified in the use of the platform.

Despite this orientation, there is also a personal assistance component. Marketo provides the following:

Onsite Training And Custom Learning Programs – The company offers on-site private training for individual teams/departments and company-wide programs.

Professional Services – The company offers:

• Onboarding Services – Pre-packaged and customized implementation programs and services
• Expert Consulting – Advice and hands-on assistance from consultants with more than 100,000 combined hours of experience advising marketers
• Strategic Advisory Services – Guidance from digital marketing experts on marketing strategy
• Creative Services – Guidance from the creative services team on the design and development of effective e-mail, mobile, and landing page templates Marketo also provides phone, e-mail, live chat, and social media support.

Key Activities

Marketo’s business model entails maintaining a robust platform for its enterprise customers.

Key Partners

Marketo maintains the Marketo Premier Partner Program, which includes the following groups:

Technology Partners – Tech firms that want to integrate their solutions into Marketo’s engagement marketing platform to offer a more comprehensive solution to their customers. Specific categories are application providers and platform providers (CRM, CMS, Integration, eCommerce).

Digital Services Partners – Service providers that want to offer Marketo solutions to their customers. They collaborate with the company to create co-selling and co-marketing programs and jointly deliver services. Marketo only works with firms in North America, EMEA, and ANZ.

Program partners have access to Marketo’s wide range of training and marketing tools, as well as support features. Specific partners include Vidyard, GoChime, SnapApp, Synthesio, and Azuqua.

Marketo also operates a referral program through which it invites other organizations to refer their prospects and clients to the company. Leads that result in subscriptions will generate a commission for the referring partner.

Key Resources

Marketo’s main resource is its proprietary software platform, which serves more than 4,549 customers. It also depends on its engineering staff to maintain the platform – traditionally, it has carried out at least ten updates/new releases per year. Further, it depends on its sales/marketing employees to sell and promote the platform, its customer service employees for support, and its training/consulting staff to offer advice/instruction. The company places a high priority on its intellectual property, with three issued and nine pending U.S. patents. Lastly, as a startup it has relied heavily on outside funding, raising $108.4 million from five investors as of November 2011.

Cost Structure

Marketo has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is sales/marketing, a fixed expense. Other major drivers are in the areas of research and development and administration, also fixed costs.

Revenue Streams

Marketo has two revenue streams:

Subscription and Support Revenue – Subscription fees charged for access to the company’s platform and applications, as well as related support services. Applications are offered in the following areas: e-mail marketing, lead management, consumer marketing, customer base marketing, and mobile marketing.

Professional Services and Other Revenue – Fees charged for access to expert services that advise and instruct customers on the best way to implement and use the company’s solutions.