Marketing Technology Helps Vico Survive
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On Sept. 20, 2008, the board of Vico Software reacted to the credit crisis by slashing budgets across the company, including 50% of marketing VP Holly Allison's allocation. Of course, she still had to get the same results.
On Sept. 19, Allison had traveled to Budapest for a board meeting with her colleagues at Vico, a venture-backed startup with offices in the United States, Hungary, and Finland. The meeting started with great promise--the sales were on target; the mood was upbeat. Then, during a break, they glimpsed a Financial Times headline announcing a huge drop on Wall Street. It was the beginning of the meltdown. "We certainly didn't see the enormity of it. But we knew it was big," Allison says.
Vico makes software that contractors and building owners use to build virtual models of buildings. Vico's annual sales are less than $10 million; before joining last June, Allison managed marketing budgets worth more than four times Vico's revenue, so she'd already begun the adjustment to finding cheaper ways of marketing. Allison and her team were conducting most of their marketing efforts online, using the Vico blog, Constant Contact e-mail newsletters, and groups on social networks such as LinkedIn to draw people to their Web site. Once there, they used live and archived Webinars and trial software packages to turn site visitors into educated sales prospects. But after Sept. 20, the Vico marketing team had to grow the sales pipeline on just half the budget.
Vico hosts its website on HubSpot, which provides SEO marketing, website analytics, and integration with Salesforce.com for, as Allison says, "seamless lead transfer from website forms/promotions/landing pages to our CRM tool." But with every dollar crucial, Vico needed to improve marketing visibility and integration. So despite the budget cuts, Vico increased its investment in Salesforce CRM by 25 percent to upgrade to an enterprise edition that allows the company to collect sales prospects from its 12 global resellers and integrate them into one "giant forecast," she says.
Following the meltdown, Vico's marketing team focused on pushing technology as hard as they could to speed the sales cycle. Vico's internal software development team wrote license management software (LMS) that linked Salesforce with another custom tool that issues software licenses and generates invoices, speeding the purchase-to-billing cycle. That was particularly important for Vico, which sells software around the world. It delivers licenses to customers who speak different languages, use different currencies, and abide by a wide variety of licensing laws. A single-seat license for Vico's software is priced at $12,500 and a typical purchase is worth about $75,000. Often, companies want to reassign use of the software from one set of employees to another as projects change. Vico's custom software, written in ASP.NET and running on a Windows Server, accommodates all of these variables. Of particular importance is the LMS's ability to recognize revenue within seconds of delivering a license. Says Allison, "For a small company working quarter to quarter, that's fantastic peace of mind."
Allison explains why Vico chose to build the software in-house. "We could not find off-the-shelf software at a reasonable price to provide the global license tracking we required," she says. "We built the LMS to support our floating license policy, which makes it easy for our customers to assign and reassign licenses to different employees as projects change. In addition, the LMS allows us to deliver software almost instantaneously around the world and recognize revenue in accordance with various country accounting rules."
After Sept. 20, Vico tripled the number of available seminars, which it produces on GoToWebinar. The company overhauled its Web site, improving navigation and adding links to lure visitors to stay longer. The team used an inbound marketing service called HubSpot that allows almost instant web page edits through a simple online interface. To decide where to make changes, Vico's marketing team analyzed site traffic to determine the most popular pages and added navigation buttons to point visitors to webinars, free trials, and demo videos. "We set a goal to get 6 percent to 8 percent of our visitors to fill out a form to give us their info freely," Allison says, "By simply adding those navigation buttons to our website, we took our conversion rate from 4 percent to 8 percent."
Vico's performance dashboards--built in-house using Excel--aggregate data from across the company. This allows marketers to know that a "general responder" who downloads collateral costs $8 to acquire; an active webinar participant, $35; a prospect who requests a meeting, $390; and a closed deal, $1,230. Using the dashboards, Allison and her marketing team can forecast results and adjust their efforts accordingly.
Increasing activity, relying on inexpensive technology, and integrating marketing, sales, finance, and administration all led to measurable growth in sales and profits despite the economic turmoil. Website visitors grew 62 percent, Allison reports, because of increased blogging and more inbound marketing--SEO-based press releases and e-mail newsletters. But Vico's not stopping there; the company recently launched a playlist of construction-themed songs on iTunes, posted webinars to YouTube , and started an online comic .
The efforts are bearing fruit. Since September, Vico's contact database grew from 1,500 to 6,000 people, 25 percent of whom participated in a webinar. About 1,000 people downloaded a free software trial, and the sales team hit 104 percent of its revenue goal with a 45 percent profit margin last quarter.