Smart Segmentation on a Shoestring Budget: How Autotask Threw Away Five Million Prospects and Doubled Its Business in Just Five Months

Autotask Corporation, a provider of Web-based professional services automation (PSA) software, was limping along in a crowded category with 70 competitors. To make matters worse, it was operating on a shoestring marketing budget. The software was originally aimed at more than 6 million professional firms that provide billable services, and although the company was generating inquiries, the prospects came from a huge cross-section of business types, making each sale a slow, consultative process.

Realizing that something had to change, Autotask brought in a new CMO. As one of his first tasks, CMO Bob Vogel literally called every single Autotask customer to find out who they were, how they used the solution, and what the business drivers behind their purchase decision were. “When I came on board,” Vogel said, “Autotasks customer base looked an awful lot like Noah’s Ark—a huge, messy amalgamation of every type of customer company imaginable. It was time to get more focused and hone in on the customers who would receive the most benefit from our solution.”

Out of the chaos of the existing customer base, Vogel noticed that IT services providers represented a disproportionately large percentage of the base compared to the market. The company drilled down into this segment to determine what it was about these customers that interested them in Autotask’s solution. They uncovered two important insights:

• In general, IT services providers are quick to embrace new technology and were thus attracted to the on-demand, Web-based delivery of Autotask’s software.
• Although most of Autotask’s other customers were using only one or two of the solution’s modules, the IT services providers were using the whole thing, and they were therefore realizing bigger business benefits than were other customers.

After determining that the IT services provider segment of the market was big enough to support Autotask’s goal of becoming a $100 million company, Autotask decided to focus 100% of its marketing horsepower on this one market niche.

Repositioning the Company to Reach the Target Market

To more effectively reach IT service providers, Autotask had to completely reposition itself. A new tagline—”Autotask®. Makes your IT business run. Better.?”—kept everyone focused on the right customer segment. It then overhauled its messaging, sales process, and training curricula so that it would all speak to IT services providers.

Next, the company concentrated on leveraging the Web as a lead generation “machine,” pushing every lead to the Web, where it is able to capture important qualifying information and kick off the sales process. With this system in place, it was then time to raise Autotask’s visibility within its target market. It did this by executing a marketing strategy that entailed:

• Web marketing. Detailed, continuous testing of keyword ad campaigns and experimentation with bid levels, ad copy, and landing page content.
• Website/native search. Revamped the Website to focus exclusively on IT services, creating reams of new content.
• Webinars. Ran weekly Webinars for prospects, offering up business tips, market research, and product demos.
• “Drip” marketing. Conducted weekly email drops to different segments of the company’s internal list of 10,000+ inquirers.
• Events. Identified and attended more than 40 highly targeted events drawing 20 to 400 IT services businesses.
• PR. Built relationships with the most influential editors in the IT services space, becoming a “go-to” resource for them.
• Marketing and sales integration. Built a “closed-loop” system in which if the sales team could not make progress within two weeks, the leads returned to marketing, where an aggressive, ongoing email “remarketing effort” ensued.
• Partner marketing. Established meaningful partnerships; ran joint Webinars and engaged in cross-references, trade-show collaboration, and reciprocal emails.

According to Vogel, the “crown jewel” of the company’s marketing efforts is its ability to track and forecast the impact of each marketing campaign. Each marketing initiative has a unique tracking code and is funneled through an automated Web form, allowing the company to identify the exact source of over 90% of all leads. For this reason, Autotask is able to effectively forecast incoming leads within +/-5% accuracy each month, which helps the sales team pace themselves through the pipeline and gives the CFO an accurate picture of where the business is headed.

Results

Before it decided to narrow its focus to IT services providers, Autotask generated an average of 50 leads a month from a wide range of business types looking for a wide range of point solutions. One year after repositioning itself and focusing on one small segment of its former market, Autotask had:

• Generated 10,375 inquiries from more than 100 discrete, identifiable sources.
• More than 75% of those leads were in the IT services market and highly qualified, dramatically speeding up the sales cycle. (In fact, of the leads marketing gave to sales, one in 15 closed—half of them within 30 days.)

Based on the insights and leadership of the marketing department, Autotask shrank its universe of prospects from 6 million to fewer than 100,000 and doubled the size of its business. Today, the company is well on its way to its $100 million goal.

Not bad for a company with a shoestring marketing budget, wouldn’t you say?

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