Signpost Raises $20.5M to Bring CRM to Brick-and-Mortar
For years, startups have talked about creating a central database for a brick-and-mortar business’s customer activity — and everything they could do once that was in place. But the relative lack of data about consumer behavior in stores has made it difficult for technology companies to create the kind of rounded image of a business’s customer-base that relationship management software companies can offer to online sellers.
Now a handful of investors are making a big bet that the New York-based Signpost can solve the problem. The company announced this morning that it has raised $20.5 million from a handful of new and existing investors, including Spark Capital, to expand its marketing automation platform beyond small businesses to mid-market brands and agencies.
The funding follows the release of a payment attribution product launched by the company last fall that helped to solve the very problem facing many CRM and marketing automation startups. The product allows companies to programmatically pull customer information from a phone call or credit card swipe, and then send text messages or emails to those people with offers or requests for reviews.
The payment and phone databases fill a critical gap for the firm. By accessing payment and phone data, the company could begin to link the vast amount of marketing data that companies have access to, with a corresponding action — in this case a phone call or transaction. The ability to connect cause and effect is critical in developing the type of not just automated, but intelligent, marketing software that has come to dominate in other industries.
“Brick and Mortar businesses don’t track customer data and don’t have a sales team to use traditional CRM tools like Salesforce,” Stuart Wall, chief executive at Signpost told me in an email. “As a result, B2C firms of all sizes can’t use CRM tools, and fail at core marketing activities like converting prospects and driving digital word-of-mouth.”
Wall says the push to work with larger brands does not reflect a move away from the small business market, only a “focus on the broader market.”
What’s important to realize is that the CRM and marketing automation thesis, which has been around for a few years, necessarily leads to consolidation. Certain product categories that may have operated independently, such as email marketing and presence management, move from being standalone utilities to dependents of a larger marketing automation/CRM system. That data-driven commodification — something that Google has done for years — tends to destroy the economics of individual businesses.
“Presence is a prerequisite, but totally insufficient in terms of CRM,” said Wall. “We think presence will be a ‘solved problem’ in the next few years and is increasingly less differentiated as a standalone. Also, Google, Yelp and Facebook drive the majority of volume for brick-and-mortar businesses and we’re not believers in the value of updating the ‘long tail.’”
The presence management sector is slightly more complex given its relationship to search engine optimization. The email marketing industry however, is far less defensible. If brick-and-mortar CRM takes off, companies like Constant Contact will face a new market dynamic where access to data, not the quality and capabilities of the product, will create the most value for users.
Steven Jacobs is Street Fight’s deputy editor.