Inside the acquisition: How and why Terminus bought BrightFunnel

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Consolidation amongst B2B marketing technology and service providers has been a constant over the past several years, and 2018 started with a bang with Terminus’s announced acquisition of BrightFunnel earlier this week.

The first-day news is always buzzworthy on its own, but my interest is typically on what the news media call “the day two story” – which often focuses on why the news happened, why it is important, and what happens next.

With that day-two story in mind, I had a chance to chat w Terminus co-founder and chief marketing officer Sangram Vajre yesterday to answer a few of those questions.

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Matt: What does this acquisition mean for marketers?

Sangram: As marketers who “drink our own champagne,” we’ve seen firsthand how Terminus and BrightFunnel can be used to win big with account-based marketing.

At the end of the day, there’s no all-in-one solution to help marketers do ABM and measure the success of their program, at least not yet. Over the past few months, ever since we brought in Peter Herbert to be our VP of marketing at Terminus, we’ve gone through an ABM transformation to truly form #OneTeam between marketing and sales. This required some new tech, and BrightFunnel was one of the key tools that drove our transformation.

With BrightFunnel, we can see directly how all of our marketing programs work to drive pipeline and revenue. Because we set up our campaigns in Salesforce, we can see in BrightFunnel how all our marketing tactics, campaigns, and programs influenced pipeline and contributed to closed-won revenue. We can now report on account-based advertising, events, webinars, content, direct mail, you name it…and we can view this through the lens of our target accounts as well.

There’s a lot of talk across the B2B marketing industry about account-based orchestration. Now, we’re going to show the world how to do it and build an ABM platform to support it.

I gotta give a shoutout to Tim Kopp, who wrote 5 reasons why B2B marketing just got sweeter because of the Terminus acquiring BrightFunnel. Tim wrote:

“Terminus helped create, define, and build the category of account-based marketing (see: the #FlipMyFunnel movement). They are the most widely used ABM platform, and they’re ranked as the #1 account-based execution software on G2 Crowd. Simply put, they are the best in ABM –  and, they just got even better … Both of the teams at BrightFunnel and Terminus are maniacally focused on empowering B2B marketers in achieving incredible results.”

Matt: Why should marketers care about this, especially when tools today can be integrated separately in most platforms and through APIs?

Sangram: Everyone who works in B2B marketing should care about demonstrating marketing’s impact on driving pipeline and revenue for sales because their jobs literally depend on it. You may have the coolest content in the world, but B2B marketers can no longer rely on the number of content downloads as a success metric. Engagement is new form fill.

We want marketers to embrace the “secret formula” for ABM of Fit + Intent + Engagement. What Terminus does is drive engagement within target accounts; then BrightFunnel measures that engagement to show how an account-based advertising campaign (or any marketing activity) attributes to closed-won revenue. We want to help our customers do ABM effectively at scale, and it’s possible using Terminus and BrightFunnel.

Matt: But why BrightFunnel, and why now?

Sangram: What BrightFunnel offers in its technology today was on our roadmap for the next 24 months. It was a solid case to acquire these capabilities now because it allows us to “leapfrog” all the required product development and engineering. Our customers have asked for this solution for ABM measurement. So we could have waited, or we could acquire BrightFunnel and deliver what our customers are asking for right now because we know the impact of BrightFunnel’s technology having seen it firsthand.

Matt: Can you give a little inside baseball on how a deal like this happens?  Where & when did the idea take root?  How did the conversation get started?

Sangram: Our CEO and co-founder, Eric Spett, heard about this opportunity and immediately got involved. When we raised our Series B in 2017, we knew we wanted to expand to open a West Coast office (Terminus is based in Atlanta). BrightFunnel was one of the first platforms that actually took measuring ABM very seriously. They essentially expanded their platform to help B2B marketers analyze the impact of their ABM programs and attribute revenue back to marketing.

One of the cool things about BrightFunnel is that in addition to marketing analytics and attribution, they can take an account-based view of reporting.

Going back to our ABM transformation as #OneTeam, Spett asked Peter when he came on board as VP of Marketing, “What do you need to be successful?” Having BrightFunnel was part of that success. We’ve used BrightFunnel’s product for awhile and love it internally, even recommending it to our customer base. When this opportunity came along, it seemed like the stars were aligned to bring BrightFunnel into the Terminus family and continue leading the ABM movement.

Matt: Most people have no idea how deals like this get done.  What can you share in terms of insights, best practices and/or recommendations for other start-up and martech leaders looking to M&A to drive growth?

Sangram: The biggest insight I have is to hire the right CFO. Our Series B funds have been used to build out a world-class executive team. We hired Cathy Chandler as our CFO, who has been through three acquisitions over the past five years: Clearleap to IBM Cloud Video in 2015; Whiptail during its sale to Cisco in 2013; and Vitrue to Oracle in 2012.

In addition to her experience, what makes Cathy incredible is that she’s a humanizing CFO. She thinks about so many human elements and the talents of each individual in an organization. This acquisition was led by her and Spett. We wouldn’t have been able to do this deal without her. It goes beyond financials and technology. You need a CFO to analyze every aspect of an organization to make sure an acquisition makes sense. Cathy could see how impactful this deal would be for Terminus. It was such a blessing for us to have such an incredible CFO who knows how to make these deals work.

Matt: Wednesday was a big day for the announcement, but now the hard work begins.  How do you integrate two companies?  How do you integrate teams, culture, products?

Sangram: You hit the nail on the head with teams, culture, and product because those are the three big things to look for in an acquisition: people, customers, and technology.

I’ve been on the other side of an acquisition when I was head of marketing at Pardot and we were acquired by ExactTarget and then Salesforce. For the first full year, Salesforce provided us with support in every way possible. Product integration plans were happening simultaneously while we continued selling Pardot and growing our revenue. The trust increased organically, and by the end of that year it felt like we were part of Salesforce.

For Terminus, we hope to follow a similar path. BrightFunnel will be empowered to sell Terminus, and Terminus will be empowered to sell BrightFunnel. As we find synergies, we’ll find new ways to integrate BrightFunnel’s technology into the Terminus ABM platform. Our goal is to continue to win in the market, unify these two platforms, and deliver an awesome ABM solution to our customers.

Matt: Who are you going to acquire next?  And assuming there’s no way you’re answering that question, can you share a little about your product vision and what people should expect next from Terminus (this year and moving forward)?

Matt: Ha! Right now we’re solely focused on integrating BrightFunnel. Our chief product officer, Bryan Brown, has an incredible product vision. He told B2B News Network:

“While the Terminus ABM platform today can be used by companies of all sizes, the addition of powerful attribution and analytics capabilities will strengthen our ability to meet the complex needs of enterprise organizations. Large enterprises are known to have lengthy, complex sales cycles, and this is where an ABM solution like Terminus helps to surround contacts at those target accounts with advertising as they go through the buyer’s journey.

“BrightFunnel helps to demonstrate the impact those ads and other marketing activities (like webinars, content, events, and so on) have on new business, marketing-sourced pipeline, and closed-won revenue. As a MarTech creator, my goal has always been to empower marketers with the tools to accomplish their own goals. The challenge of demonstrating the value of account-based tactics and the ROI of marketing programs is a problem that we’re passionate about solving.”

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