As Marketing Automation Wave Hits Lower Middle Market, One CMO Ponders Feeding the Fortune 5,000,000

When Act-On Software of Beaverton, Oregon, ended its 2012 fiscal year last December, its 140-member workforce may have appeared somewhat plus-sized for a firm garnering roughly $10 million in annual revenues.

However, as is the case with many high-growth companies, Act-On’s current workforce number says more about where it’s headed than where it’s been, and after tripling its sales for 2 consecutive years, you might imagine that the software firm’s management is being careful not to have its headcount fall behind the firm’s growth curve.

“I do at least half the reference checking of the job candidates coming into my group, so if they have three references, I’ll call at least one or two of them, and that is what you will find throughout the organization,” explains Atri Chatterjee, Act-On’s chief marketing officer (CMO), who says that it is typical of the firm’s management to remain very hands-on in most aspects of the company’s operations.

“It’s very hands-on — because it’s a smaller company. So if someone is sick, I actually feel as though in 9 out of 10 cases, I can do part of their job — maybe not as well as they can — but I can at least keep things going, so the role is very hands-on, and you’ll find that this permeates everything we do,” says Chatterjee, whose insights into the day-to-day operations of $10 million business are perhaps worthy of some added luster in light of the fact that Act-On’s own offerings are designed to help medium and small businesses market online with fewer workforce resources.

“If you think about the sales funnel, where you have prospects coming along the top, the question is, How do you make that more efficient and use things like social media, email, and content to bring people in so that they would be interested in your solution and the whole opportunity pipeline?” says Chatterjee, explaining the premise behind Act-On’s marketing automation offerings that have now been adopted by more than 1,500 customers.

Asked how the role of the CMO is changing in general, Chatterjee says, “What is happening is that data and metrics are becoming much more important in marketing than they ever were before. Today, CMOs need a sense of numbers.”

Despite its rapid growth, 5-year-old Act-On is a latecomer to the marketing automation space relative to Eloqua (founded in 1999), the pioneering firm recently acquired by Oracle Corp. Other more recent competitors inside the marketing automation arena include Hubspot (founded in 2006) and Marketo (founded in 2007).

“We often say that we have a ‘last mover’ advantage, because we are probably the last major company in this category, because we scaled very quickly and we scaled quickly because we’re focusing on the segment of the market that has been ignored,” says Chatterjee.

“A large part of our customers, over 25 percent, are in business services. These are accounting firms, consulting firms, law firms, and they very often may employ roughly 100 people. Still, they may have only two people dedicated to marketing,” says Chatterjee, who admits that Act-On’s own marketing workforce has climbed upward to 20 employees.

“It’s because we are a marketing company, so you would expect us to have a larger proportion of the people in marketing,” says Chatterjee, whose arrival within the firm’s leadership ranks roughly a year ago signaled to many a new age of maturity for the firm.

Prior to joining Act-On, Chatterjee had served in senior leadership roles at a number of high-tech firms, including Symantec and McAfee, Inc., where he was vice president of marketing.

“In a larger company, establishing consensus is very important, so you spend a lot of time on internal communications. I would say that 30 percent of my time was spent doing that kind of thing. Here in a company this size, it’s quite different. It is almost like you huddle to figure things out before you scrimmage,” Chatterjee explains.

Asked how Act-On’s marketing function operates differently from that of firms similar in size but with a less steep growth trajectory, Chatterjee says: “We do planning where we set objectives on a quarterly basis and calibrate and readjust, so from a planning and strategy standpoint, we have a time horizon that may appear long, but the calibration is very short and we are constantly changing things.”

He adds: “It’s a little bit like being a jazz musician — you sort of know what direction you are going to go in, but you are going to make things up along the way.”