Bringing the unique perspective of the investment community as well as having built one of the top brands in the marketing automation category, Tim Kopp was announced as the CEO and chairman of Terminus this week.
With more than 20 years of experience, Kopp was CMO of ExactTarget, where he led a team of more than 300 to scale revenue from $50M to $400M, through IPO, and ultimately to a 2013 acquisition by Salesforce for $2.7 billion. More recently, Kopp was as an active early-stage investor at Hyde Park Venture Partners. He has moved back into operating and growing a business after serving on the Terminus board of directors since 2015 and assuming the role of the executive chairman earlier this year.
Demand Gen Report had the chance to meet with Kopp this week to get his perspectives on how the current ABM category compares to the growth curve and expansion of marketing automation, the challenges brands are facing in scaling ABM and how Terminus is planning to expand its position as a leading platform for the category.
Demand Gen Report: In your recent work on the investment side, you've had a chance to look at different businesses and different categories. What excited you enough about Terminus to move from where you were in the investment community, back into a CEO role and working with this company in particular?
Tim Kopp: What being an investor taught me is fundamentally great companies are shaped by two different things: being in a great market at the right time and having the right team. Everything else other than that is kind of details in terms of how you execute.
With Terminus, we placed a seed bet with the company early on, so I’ I've been involved since the beginning. I've been on the board watching it since day one for the last four or five years. Then I got more involved and took an executive chairman role in the summer and realized how important the fundamental transformation is that's happening in ABM, and how good our team is right now to be able to go take advantage of it.
DGR: What’s your perspective on where the ABM category is going and how it has evolved. There are some challenges, obviously, but where do you see it today?
Kopp: I think it's really messy. And if you look at a number of different data points from Gartner, it would say we're at the trough of disillusionment. Even if you ask people for a common definition of what ABM is, everybody will play back something kind of different. So, you've got people attacking it from an account intelligence side, from an orchestration side, from an engagement side, and from a marketing attribution and measurement side. And then a lot of people who were not technically ABM, they just kind of tacked on what they were doing and said, “You know what, we're going to be ABM.”
I don't even describe what we do as account-based marketing. I think account-based marketing is part of it, but I view it as account-based engagement. With the executives that I've worked with and in the boardrooms I've been in, they’re more interested in finding the right best-fit target accounts. How do I engage with them across all the different forms of modality, activate back to the sales team and then have the measurement component as part of it? What we've done with our platform that we call “TEAM” has each of those — Target, Engage, Activate, Measure — and I think it's going to help drive a common definition of what ABM is, which will start to drive best practices. But it is, it's a little Wild West right now.
DGR: From a practitioner standpoint, there have been some challenges with rolling out ABM at scale. What do you see in terms of execution and where clients are struggling to implement ABM successfully?
Kopp: You're exactly right. There have been many companies that have had failed attempts with ABM the first time in, because it ends up being a fairly transformational exercise that requires true partnership between sales and marketing. So, if you can't even agree on who your best fit accounts are, your sales reps don't have a named account list. It's really hard to do ABM and a technology solution is not going to fix it. So, I think it is part the services and advice and consulting that goes into ABM to set up the infrastructure and the platform to do it. And then it's all the engagement around it to deliver ROI. I think most people took a baby step. We were doing a little marketing automation in lead-based world to now we're going to just try to generate more leads but in an account-based way, which is part of what ABM is, but it's not biting off the entire piece. Now, sales leaders and CEOs and others are coming along as part of the journey. That's what's creating this tipping point of transformation now.
DGR: In terms of Terminus as a company, you were involved from the beginning. Can you give our readers a sense of where the company is and how the company is growing?
Kopp: We're in a fundamentally very healthy space. We have a market-leading position with hundreds of customers and we’re very well-financed and capitalized. We're ranked the highest by users on G2.com, we have a very supportive investor base and a very healthy partner ecosystem. We've got a great team, we're very well capitalized for the future. We plan to take the position of strength that we have now.
If you take a couple of steps back, I joined ExactTarget back in 2007 when it was almost exactly the size of Terminus. So, we're around a $25 million run rate just going on 200 people. This is the size and stage company that I love and now, it’s really just going and unleashing that potential.
DGR: You brought up your time at ExactTarget. You saw the evolution of the marketing automation category and all of the M&A activity that took place. How do you see that maturation of marketing automation versus where ABM is now?
Kopp: I feel like we're watching the movie again. There are three or four players all out there creating a healthy ecosystem around ABM. But everybody's just going after kind of a piece of it today. I fundamentally believe that a very important part of building a great martech company, is being world-class at only the point of engagement. What we've done around ads, and then building a common data model reminds me very much of what ExactTarget did with email. That's where we got our start. And then we used that to kind of continue to build out a common data platform. And then how do you continue to use that to expand out into other modalities?
I think you're going to see a lot of consolidation in the industry. I think you'll see two or three players start to emerge as the key leaders and it'll really start to build momentum as a category. And it’s the same thing with the email providers that became digital marketing hubs. I see a lot of that happening kind of within ABM is the people who are attacking a piece part of it are going to go on to become more end-to-end platforms.
DGR: I was also curious to ask about your time as CMO of ExactTarget? It was at a pretty transformational time. It seems like a lot has changed for CMOs. When you look at it now from a CEO standpoint and having been from the investment community, how do you see the role of the CMO change?
Kopp: The role has changed dramatically. When I stepped in to be CMO, even just 10 years ago, just the community of other CMOs was not nearly as big or vibrant as it is today. I felt like I was one of a couple hundred then, and becoming a CMO was just becoming a thing, which actually led to the whole marketing automation field. Because marketers had to sign up to own a number, and the number they agreed to sign up was called leads.
So now what we see is that sort of decade-old infrastructure collapsing on itself a bit. There needs to be a more intelligent, informed way to do it, which is attacking the market account by account and better segmenting and understanding who you should go after. The poor CMO — I think it's the most difficult role in the C-suite by a mile. And as much as it's evolved in the last 10 years, it'll evolve more in the next 10. The CMOs of today, I believe, will be the Presidents and CEOs of the future because they are seeing the market, they're understanding how to take a product and connect it into sales in the market. They're engaging with analysts and customers and they're responsible for all the messaging and positioning. Then there's this numerical side of the business and all the thought leadership and work that you need to do and market. It is a broad, broad role.
I think we will see specialization and it's almost not a fair ask somebody to be a numbers wizard and break down Excel and have all the financial modeling and then be strategic enough to understand everything around who your ideal customer profile should be. And then go keynote at an event and then go break down all the pricing and packaging, because that's, that's really a bunch of roles baked into one.
DGR: You know the marketing automation category very well. You mentioned that there's some transformation there for the lead-based model. When you look at Terminus in the ABM category, do you see that ABM will coexist with marketing automation and the two will complement each other in the future?
Kopp: I very much see them working together right now. Marketing automation can be part of an ABM platform. What is fundamentally changing though, if you step back and don't think about the technologies, and think about customers and what's happening, the idea of having a lead within an account, but not intelligently understanding everything else that's within an account and driving somebody to a web form fill that is not intelligently designed … and just that the consumer is changing so fast. I think it's going to place a lot of pressure on marketing automation as we know it today to become more real-time and have smarter, personalized web con to become more chat and to really build that kind of common data model of the customer, but in a completely account-based way. It’s going to take a while to kind of have the conversion key from leads to accounts and how leads come in and better form accounts. But we’re at this tipping point of where ABM is headed — that will be how smart marketing is done in the future. Having an intelligent and informed view of what's happening in the account and thinking about all the buyers within that account. I think marketing automation plays a role, but account-based marketing is the future.
DGR: You talked about consolidation, which we already started to see Terminus make some acquisitions. Do you see that more potentially?
Kopp: Yeah, we certainly see a big opportunity to make some moves in the industry and become that platform of record for marketers. Right now, we're starting with a really deep partner ecosystem. How do we just start with, you know, doing more around informed channel partnerships and how we go to market? We're really excited about the opportunity to combine in a deeper way with some other companies.
DGR: What other changes do you see in the future of B2B as ABM becomes more of the core strategy?
Kopp: ABM has been so focused on marketing today. The most strategic discussions that we're having is when the sales leader comes in as part of that conversation, and they're working together to figure out how do we go and find the right accounts? And then what are the plays that we're going to run together between sales and marketing to really go activate this? So, one of the fundamental things that is most striking and most transformational about ABM is the cross-functional nature of it. In some ways, ABM isn’t new. It's just smart, targeted marketing that you do to surround your customers. What is different, though, is the amount of technology and how it sort of comes together. But you have to have deep alignment with the sales team, and then, frankly, all the way back up with the CFO or the CEO on defining what success looks like.
I think there's going to be a really important services ecosystem that builds around this to help organizations through the change management part of ABM that needs to happen because it's so cross-functional.