Originally Posted: https://chiefmartec.com/2018/11/analyzed-5000-martech-companies-network-strength-heres-found/
Scott and I are always on the lookout for inspirational ways for the community to leverage the massive martech landscape to share new insights, recommendations, and commentary.
I’m a strong believer in talent, relationships, data, and growth investment. Through a collaboration with Nudge.ai, I’ve developed an interesting perspective on martech through that lens. We produced a series of rankings that showcase martech companies with the strongest networks.
But first, a little bit of context on relationships and trust.
Why Relationships and Trust Matter
If you look across the sales org, the evidence strongly suggests that trust is now the key determinant of success. 84% of B2B decision makers start their purchase with a referral – an obvious starting point of trust.
Salesforce has shown that high-performing sales teams are re-organizing accordingly. High performance sales teams are 2.8x more likely than underperforming teams to say their sales organizations have become much more focused on personalizing customer interactions over the past 12–18 months — in order to build trust and earn referrals.
At the same time, 79% of business buyers say it’s absolutely critical or very important to interact with a salesperson who is a trusted advisor — not just a sales rep — who adds value to their business.
Business should take note and take action because building trust and strong relationships often requires collaboration across teams more than any other approach. In a relationship-focussed market, the ability for organizations to use their networks to connect and develop trust becomes a key, strategic asset. And as more organizations practice cross-collaboration, the interdependence of teams — particularly sales and marketing — becomes critical.
It’s the growing importance of trusted relationships in sales and marketing that sparked my interest to investigate the strength of companies’ networks, in this case, within martech.
Process for Ranking Relationship Network Strengths
The idea came from a successful investment thesis that I’ve been using for the last decade: brands with stronger communities and deeper connectivity deliver the best valuations.
Many research studies demonstrate that the companies with the broadest networks improve access to talent, sales, capital, and investment returns. So far, this type of analysis has led to better investment ROI, improved tech selection, and overall better customer service for clients, investors, and professionals.
We began with the general list from our latest list of the Martech 5,000. We then imported select categories into Nudge.ai and let the algorithms fly!
We call the output “Most Connected Martech.”
Being “most connected” is more than simply having someone in your Rolodex. Relationship strength builds over time with each interaction — and likewise, it decays if a relationship is left alone for a long time. Great networkers know this instinctively, and actively work to start new relationships, build passing acquaintances into strong relationships, and maintain old relationships.
The Most Connected analysis reflects the value of networks and looks at the number, strength, and distribution of relationships that people in a company hold. We then ranked the companies with the strongest connections to the outside world. Relationships are calculated using anonymized, aggregate data from Nudge.ai.
Nudge.ai’s relationship intelligence calculates the number of relationships considered in the context of both “active” and “strong” relationships. Active relationships relationships require some level of back and forth, and strong relationships are those with a regular amount of dialogue. Strength is measured by calculating frequency, duration, and consistency of back and forth through communications including email, phone, meetings, and other CRM-tracked activities.
Relationships where parties lose touch are accounted for using a relationship decay algorithm. And it also considers whether a company only has a well-networked sales team versus having strong relationships across their organization to the outside world.
So, onto the lists. After a bit of polishing, here are the results (click to see them)…
- BI & Data Science
- Bots & Live Chat
- Content Marketing
- Customer Experience
- Display & Programmatic Advertising
- Marketing Automation
- Mobile Marketing
- Personalization and Optimization
- Sales Enablement
- Advocacy, Loyalty, and Referrals
- Social Media Marketing & Monitoring
Insights from the Results
As expected, we see larger, older, and public companies bubble to the top. Upon interviewing some of these enterprise firms, the overall challenge has been to collectively harness the ecosystem for warm introductions. It has been instead a flurry of broadcast Slack and email messages cluttering the communication board.
Interestingly, in the newer smaller categories within the landscape, such as ABM, CDP, or the emerging conversational chat/bots, it’s anyone’s game. Also, for VC-driven startups, there are greater valuations for stronger networks.
Last, and unexpectedly, when we list the most connected people who are top of mind, we think they can carry the weight of the network for the company. However, if they are alone in their visibility, we see their scope and breadth does not contribute enough to their brands. For companies at the top of the list, their network is deep with well-connected leaders and collective breadth across several industries.
Put simply, one visible person cannot successfully hold the brand. Also, those valued well-networked people in the company represent a tremendous risk in equity, valuation and pipeline opportunity.
Companies finding success are investing in their networks. Particularly in the crowded field of marketing technology, we’ll continue to see consolidation based on the companies that have the broadest networks. They’ll raise the most capital, attract the best talent, and build the most relationships to drive sales.
We’re excited to present this analysis today, and hope it is useful for you.