Constant Contact Acquisition and the Significance of Marketing Technology

Here's what Constant Contact's recent acquisition means for entrepreneurs.

Constant Contact Acquisition and the Significance of Marketing Technology

With the recent announcement of Constant Contact's $1.1 Billion acquisition by The Endurance International Group, this marks a significant milestone in the upward trend of successful exits by marketing technology companies.

In a move to expand beyond their family of web-hosting companies, Endurance, whose brands include HostGator, FatCow.com, and Domain.com, is taking big strides with their Constant Contact acquisition, to offer a wider suite of useful marketing tools to their existing customer base of small and medium-sized business owners.

Today, I got the opportunity to interview both Gail Goodman, the long-standing CEO of Constant Contact, and Hari Ravichandran, the founder and CEO of Endurance, on what exactly this acquisition means for entrepreneurs looking to make a splash in marketing technology.

First, to give some insight as to what made Constant Contact such a great acquisition target, is my interview with Hari.

Ryan: What about Constant Contact made it an attractive acquisition target for Endurance?

Hari: "This acquisition fortifies our position as a leader in the SMB services space."

"With the additional product suite that Constant Contact brings, we are able to offer a full range of complementary solutions to SMBs. Together, we’ll be a leader in the SMB marketing services space – helping small businesses get online and grow online, serving them from inception to growth. Once a small business establishes an online presence, we know one of the first tools they want is email marketing.

Joining forces with Constant Contact creates a seamless experience for our small business customers to easily grow their businesses. Additionally, with our combined reach to over 5 million subscribers, the combination enhances our operational and financial scale."

Ryan: What type of key performance indicators do you typically look for when evaluating a company for an acquisition?

Hari: "At Endurance, we are driven by our mission to make the web a better place and deliver valuable services and solutions to help small businesses get online and grow. Our analysis can be based on combination of variables – strategic fit and rationale, the target’s subscriber profile, growth in both revenue and profit, future synergies, and future cash flow, for example."

Ryan: What goals does Endurance hope to accomplish now that Constant Contact is on board?

Hari: "The integration of Constant Contact into our portfolio will enable us to provide broader solutions through different touch points with our current subscribers. We also believe that there is an opportunity to market the Constant Contact product through our current customer acquisition channels. On a broader basis, Constant Contact has strengths in areas such as product, brand, and customer experience, and we believe that these areas too, will benefit Endurance as a whole. We are thrilled for Constant Contact join the Endurance family and are looking forward to what’s ahead!"

Now, to shed some more light on how Constant Contact has made it through more than 20 years in the marketing technology space, here's my interview with CEO, Gail Goodman.

Ryan: What has been your biggest failure (and subsequent lesson) during your career as an entrepreneur?

Gail: "In the early days of Constant Contact, when we were trying to scale, we tried lots of seemingly great ideas that landed with a thud, including trying to sell our SaaS offering on store shelves and door-to-door. Really."

"Yet, that process of testing also uncovered some surprisingly impactful marketing channels, like radio and local seminars, which work extremely well for us to this day. It’s all about learning from everything you do. If you let a failure or something that didn’t quite go right get to you, it’s going to impede future success."

"We have a strong culture of testing into everything. Get out there, try things, and if they don’t work, learn from it and quickly move on."

Ryan: If you had to choose, what would you say has been the single most effective growth lever in getting Constant Contact to the level it's climbed to, in the online marketing space?

Gail: "Culture has been our biggest growth lever. At Constant Contact we all share one goal: helping small businesses succeed. It’s no secret that half of all small businesses fail within the first five years. We’re determined to help our customers beat the odds – and we make sure they know they don’t have to go it alone."

"With customer success as our northern light, it shaped the way we go to market, on-board customers, build products, provide customer support…everything."

"We offer free marketing resources designed to help our customers get up to speed and achieve the best possible results in the shortest amount of time – because time is something most small businesses have very little of. Our resources are presented in many different formats so our customers can pick those that best suit their learning style and time constraints. For example, we host free, in-person educational seminars in local communities across North America and the UK; webinars for online viewing; podcasts so folks can listen at their convenience; printable guides, blog posts, and helpful tips on all major social networks."

"We also offer free personal coaching, with support available via telephone, chat, email, and social media. No other email marketing provider offers such comprehensive resources, backed by live customer support. It’s a winning combination that helps small business owners become successful marketers."

Ryan: Have there been any important decisions you've made in the business, that you feel many people disagreed with you on?

Gail: "The initial launch of our email marketing product for small businesses back in 1998 was nerve-wracking, in that we were doing everything that the experts said NOT to do. Everything that had been done up until then suggested that we couldn’t possibly scale a business at $15/month and include free personal coaching."

"We were told there was no way we could make the customer economics work. But, we knew that small businesses needed an affordable email product and the option to pick up the phone and talk to a real person when they needed help. It was a bumpy road at times and the most important lesson I took from this journey was to test, test some more, and then retest – it paid off for us, as we were able to prove the skeptics wrong."

Ryan: What's the most impactful piece of advice you'd give to aspiring entrepreneurs?

Gail: "Design your customer experience based upon the needs of your target market, not the latest ‘startup best practices’ or how your VC's other portfolio companies do things. Of course, you should track the evolving startup trends, but adapt them for your solution and your customer.  Be close enough to your customer and market that you can have a strong point-of-view. Market leaders break the rules by serving their customers differently."