Ironically for the CEO of a Sales Acceleration company, there was one thing this week that Dave Elkington couldn’t speed up – the London traffic.
I’d been due to meet the founder and CEO of InsideSales in central London, but when I turned up, the poor guy was stuck in a cab somewhere several miles across town.
Fortunately for me there was a more than capable stand-in to deputise in the form of former Salesforce EVP Lindsey Armstrong, now SVP of international strategy at InsideSales.
She’s not the only former Salesforce staffer at the firm either, with Armstrong’s former colleague Martin Moran picking up the role of EMEA General Manager as part of a push into Europe.
The Salesforce alumni connection is sort of appropriate as Salesforce itself became an investor in the company in its latest round of funding, which raised $60 million for growth.
And in a sign of the changed nature of the cloud world, Microsoft is also an investor, the detente between the two CRM rivals brokered by Salesforce CEO Marc Benioff and Microsoft CEO Satya Nadella paving the way.
So with Elkington on his way and time short, Armstrong gave me the elevator pitch for InsideSales and sales acceleration in general:
We make sales reps more successful and we create more sales pipeline.
Sales acceleration sits between CRM and marketing – CRM is the management tool and marketing feeds the sales funnel. That’s the way it’s worked.
What sales acceleration does is collect a ton of information on sales transactions and supplements that with external data, such as the weather conditions or sports news.
We then apply our algorithms to that and predict not only which sales actions should happen, but also what the sales person should do.
Success is measured in very simple terms, she added:
This is a revenue sell. We want to generate more revenue for customers. Those customer do like that the ROI on this is extremely transparent. You’re either making more calls and transactions or you’re not. We reckon it’s about 90 days to see a big return. ADP saw a 32% revenue increase in 90 days. It’s all really clear.
So that’s the theory. How does it work in practice? Armstrong explained:
Think about the typical day for a sales person. You have your prospect list. Who do you call first? And when? We have our predictive platform Neuralytics, which looks at the 13 billion transactions that we have in the system and adds in the external factors, then predicts that likelihood of a call being answered at any given time and the likelihood of a sale taking place.
So, if it’s raining in London, then that might be a good time to call, but not if Andy Murray’s just winning Wimbledon. It tells you the best way to contact customers and the best way to communicate with them. If you write an email, it can suggest better things to put in that email. Then it can tell you once that email’s been opened, when to send the proposal, who that proposal gets forwarded to and so on.
What about the Germans?
At this point, alarm bells began ringing in my mind. While the pitch may a compelling one from the point of view of revenue generation, there’s a lot of room for data privacy concerns in there as well. Those concerns might not have hindered progress in the US, but could be very tricky to navigate in Europe, particularly in Germany where the already conservative data protection sensitivities run even higher post-Snowden.
It’s clearly something that has to be addressed head on as InsideSales is following in Salesforce’s footsteps and pushing hard into European territories. With Salesforce targeting French and German market expansion, it seems likely that InsideSales would do the same?
Armstrong chose her words carefully:
We do expect to have to make some modifications in Europe. We have engaged privacy experts over here in order to ensure that we are fully compliant.
The key in Germany is going to be transparency as it will be in a lot of territories. People will need to understand that our data is fully anonymised and how secure the data really is.
Something that should help here is the opening of an in-region European data center this summer. This will be a co-location deal, either in Dublin or in the UK, where InsideSales now has its European headquarters.
At this point I had to run off to another appointment while Elkington was still stuck in the London rush hour gridlock, but I did wonder how hardened sales people reacted to this sort of offering. After all, many marketing professionals resist marketing automation tools on the basis that somehow marketing is all about alchemy and magic and creativity.
Isn’t there a danger that a system like InsideSales threatens the ‘secret sauce’ ego of the super sales person? Can organisations drop the really expensive sales types and get cheaper models with the InsideSales system guiding them through? Armstrong demured:
Sales people themselves are not going to go away.
If the question is, ‘Do I need a $200k flashy field sales guy?’, then maybe you don’t need as many of them.
Post script – beating Benioff
While I didn’t manage to meet Elkington face-to-face on this occasion, we did connect later before he flew back to the US to ask him a few questions about the latest round of funding and where he saw the company’s future path leading.
Touching on the Salesforce-Microsoft investments, he said:
The endorsement of InsideSales by the two biggest CRM vendors investing together is unprecedented. It demonstrates confidence in the Sales Acceleration space, and highlights to their customers the importance of predictive and prescriptive analytics.
We lead this market – but it is very big. Currently, it’s sized at $13.8 billion. We genuinely like having competitors in the market – otherwise how will we know we are the winners? This market is set to outstrip in size and growth the CRM market – it’s going to be a category consumer, not category fodder.
The last point answered one of my other questions – is this a sustainable standalone market or will InsideSales end up inside a wider firm such as one of its CRM investors? What is the exit strategy, I wondered. Elkington’s response was:
We are focused on entry, not exit: entering new markets, like EMEA, building new verticals, entering new and adjacent spaces.
This is a growth strategy for sure – we have been doubling every year: headcount and revenues. We are very fortunate that we have so many options as we grow the company.
One of those options would of course be the possibility of an IPO at some point in the future. Based on Elkington’s track record on financial backing, that would be a very considered move. He’s been very careful over the firm’s seven year existence when it comes to financial backing.
Early funding for the firm came from a source close to home rather than institutional investment:
My mother in law invested early in us. When we were just starting out we had to bootstrap the company. At one point, my wife and I were working evening jobs to fund our ambition of creating a world class machine learning company. I learnt a lot about fiscal responsibility at that time!
And it allows Elkington’s mother-in-law to make an unusual boast:
My mother in law likes to say she was ahead of Marc Benioff in recognising the opportunity.
A simple but compelling sales pitch to the sales community and one that’s gone down very well in the US, with the likes of Groupon and ADP as customers. Now for the international expansion.
The privacy side of things will be something to be very careful about in Europe, but having a data center in-region indicates that the firm’s well aware of that.
If Nadella and Benioff both recognise something of value in an investment, then that makes InsideSales one to keep an eye on.
Disclosure – at time of writing, Salesforce is a premier partner of diginomica.