Unica's Vision: "Marketing So Relevant, It Feels Like Service"

Yuchun LeeWhen I first met Unica co-founder Yuchun Lee several ago, he told me his goal was to create a billion dollar business. Seemed a bit far-fetched at the time, since the company had yet to book $10 million per year.

Now, as Unica surpasses $100 million per year in (run-rate) revenue, that goal could be achieved in less than a decade.

Of course, Lee would have to keep Unica growing at around 30 percent compounded per year. After a wide-ranging interview at Unica's recent customer conference (May 7-9 in Las Vegas), he has me convinced it's possible, even probable. And no big jackpots required, just steady execution.

The market for marketing software is big enough, he says, and the company can grow both organically and through acquisitions, as it has done in recent years by buying MarketSoft for lead management and Sane Solutions for web analytics. Expanding the company's product footprint and geographic coverage will also help.

Marketing System of Record

Unica's growth is built on a foundation of product innovation designed to give CMOs an end-to-end solution dubbed Enterprise Marketing Management (EMM). In his keynote address, Lee spoke of the need for a marketing "system of record"—akin to what accounting systems provide for financial data.

Sadly, for most companies the vision of one CRM system managing all aspects of marketing, sales and service is not happening anytime soon. (If you've done it, write me, I'd love to interview you.) While I shudder to think of yet another silo being developed, the reality is that IT systems have been fragmenting at a fast clip the past few years. The growth of on-demand in particular has created many more silos of automation for sales (e.g. salesforce.com) and customer service (e.g. RightNow).

Lee is betting that CMOs will invest in their own EMM systems. (You can almost hear them saying, "To hell with CRM, I'll be fired before that happens.") Maybe so, but I think a few CIOs are going to get fired after trying to create a responsive, enterprise-wide IT infrastructure when the other CxOs are doing their own thing.

Insight for Web and Multi-Channel Marketing

Web analytics is another software industry category that growing rapidly, with companies like Coremetrics, Omniture, WebSideStory, and WebTrends leading the way. So far. Google has been stirring things up at the low-end with a free and recently improved Google Analytics. You know vendors are worried when they say that Google is helping them by "validating" the space. Yup, that's what Microsoft used to do when it entered a market.

Well, Unica validated web analytics too, when it acquired a smaller vendor (Sane Solutions) in March 2006, renamed it Affinium NetInsight, and made enhancements. But it's the multi-channel angle that could be the game-changer. Not only are more people going online, but the ad money is following them there, and it's becoming clear that understanding multi-channel behavior (online and offline) is critical. Unica is uniquely positioned to do that, at least in the B2C world.

At Unica's conference I enjoyed meeting another co-founder, Ruby Kennedy (an MIT grad like Lee), who heads up product management for the Affinium Suite. Kennedy showed off the firm's new Affinium Insight solution, designed to bring a powerful analytics tool to the desktops of marketers.

The tool has roots in NetInsight, but is designed for more general use by regular business users, not just a specialist who lives in the Unica application all day long. The idea is to enable marketers to dig through marketing data and easily see visual correlations, which could then used to launch campaigns to desired segments.

With Affinium Insight, for example, a marketer could analyze the sales lift from doing an combination of direct mail and email campaign versus email only. Are customers shopping more frequently? Preferring one channel to respond and another to purchase? I should think that multi-channel retailers—and Unica counts some big ones like Best Buy and Lands' End among its customers— could use this, um, insight. And then make offers to encourage customers to buy and keep the cash registers ringing, online and offline.

People Come First

Without strong technology, Unica wouldn't be where it is today (generally in the right spots on analyst charts). However, I think the real secret of Unica's success is not product innovation. That's just one outcome of a customer-centric culture fostered by Lee from the very beginning. It's really about people: customers and employees.

Lee says he wants Unica to "be known for the success of our customers" while building a great place to work, too. That's certainly consistent with what he told me two years ago in my Inside Scoop interview. Based on interactions I've had over the years with Unica staff and customers, it's more than a slogan. Keeping it up will be challenging, Lee acknowledges, as Unica grows from 450 employees today to thousands in the future.

Although publicly traded (NASDAQ: UNCA) Unica insiders (Yuchun Lee and other executives, directors and affiliated people) control 40 percent of the stock, more than the typical public software company. That should help Lee repel unwanted advances and keep marching towards his billion dollar goal.

Customer-Centric Marketing

Can marketing truly be customer-centric? I wonder sometimes, as marketers devise ever more clever ways to paint targets on their customers backs, without any real interest in building valued, trusting relationships. So long as the revenue goes up, it's all good!

But power is shifting rapidly to customers. Lee pointed out in his keynote about the "Power of One," that with blogging and other forms of user publishing and information sharing, companies can't totally control the marketing message any more. The key, he said, was to make "marketing so relevant it feels like service."

I couldn't agree more. If Unica can accomplish that, it will live up to its Latin meaning, "one of a kind."

Yuchun Lee: Co-founder and CEO, Unica Taken at 2007 Unica customer conference, Las Vegas