CNME Editor Mark Forker speaks to Avlesh Singh, CEO and co-founder of WebEngage to learn more about how the marketing automation platform is empowering marketeers in the B2C space to generate more revenue from their existing customers via online conversion.
Avlesh Singh is one of the most influential thought leaders in the IT ecosystem in India.
He has enjoyed a remarkable career thus far, one which has seen him build the technology backbone for burrp, India’s first restaurant recommendation engine.
However, in 2011, he decided to venture into the SaaS space, and along with Ankit Uterja, they founded WebEngage.
In a compelling interview with CNME, Singh documents the journey the company has undertaken, the marketing pain points that it is trying to address – and why the company is now well-positioned to really scale and achieve unicorn status in the very foreseeable future.
He began the conversation by highlighting some of the key driving factors that motivated him and his business partner Ankit Uterja to lauch WebEngage.
“I think it’s fair to say that in the last 12 years, all we have done is survive. However, what I always tell my team is that if we can survive over the next 10 years then we will become a very large company. The challenge for all businesses is staying alive and relevant, but thankfully we’ve managed to do that thus far in our own journey. It started as a very humble onsite conversion tool, which was driven by our own experiences of what we saw when working with our previous start-up company. The need that we identified was that the marketing department in any internet company globally struggles to basically use their own website as a marketing collateral. Websites are hardwired, so making changes, or having a message that is targeted, or in real-time is hard to do, it becomes a development and technical problem rather than a marketing one,” said Singh.
Singh had a strong desire to change that problem for marketing and sales teams globally, and wanted to equip them with a platform that could enable them to put out promotions and offers to users that were already visiting their website.
“We essentially built the platform to empower marketeers, and that was our first version of the product. We raised some capital on the way, and it was essentially a DIY SMB SaaS product that we sold for $3,000 annually. There was minimal integration and you’d be up and running in a matter of minutes. That was our design philosophy, and it was very successful. By 2015, we had over 50 employees and were generating around $2.5m per-year.
However, as Singh explains, he and Uterja decided to complicate things.
“The key rationale behind our decision to pivot the product was the fact that any space like this in marketing can very quickly become commoditised. We were working with some big players in both India and the United States, but Ankit and I came to the conclusion that if we can’t make money off these types of companies then who can we make money from? There were other factors behind our decision to pivot, but this was fundamentally the primary reason to shift focus,” said Singh.
The CEO of WebEngage pointed out that the decision to pivot the platform resulted in them embarking on a journey of discovery.
“When we looked to change direction, it ultimately led us to discovering more problems around what we were actually trying to solve in the first place. The problem we were trying to solve initially was all around onsite conversion. When someone visits an e-commerce website we know there is an intent there, so the very first version of our product was focused on converting that intent into as many customers as you could. However, we done some internal homework, and spoke to about 50 customers as part of our efforts to find out what exactly it was that their customers were spending money on, and it turned out that the biggest problem they were facing was actually bringing people to their application and website. The discovery also explained why all these brands today continue to spend almost 85% of their digital marketing budgets with Google and Facebook,” said Singh.
As Singh stressed, their inability to retain and direct customers back to their application or website, rather inevitably drives them to spend that money with companies like Facebook and Google because they simply need people to come back to their website.
“We knew it could be done better, now some people loosely call it marketing automation, but if you go deeper then you’ll see that the term marketing automation has been abused. Marketing automation as a term has been around for 20 years, with players like HubSpot, who were one of the first B2B marketing automation companies. What our peers do in this category is nothing to do with what marketing automation stands for. We provide a deep customer engagement based on data and real-time actionability. There is massive amounts of intelligence built into that data to send a message to that user that makes sense in that time and that moment,” said Singh.
Interestingly, Singh said that when they launched the new version of their platform in 2017, they opted against seeking venture capital, and said that period was a real defining point in the evolution of WebEngage.
We started on that path in 2015, and it took us about a year to discover the problem and build it out, and then another six months to stabilise the platform. We launched it in July 2016, but the stable product wasn’t introduced until 2017. Since that point it really has been a phenomenal journey for us. We have built most of this without any capital, from 2017-2021, there was no capital investment, and that in many ways was also the defining years for the company. I think when you survive that phase, and you build and find customers then you’re really laying the foundations for a rock-solid business model,” said Singh.
As Singh outlined, WebEngage have enjoyed success of late, but highlighted how many CMOs are still quite happy to pay for Google ad spend, despite the fact that it is not going to generate new customers for them.
“I think the category is still very much evolving. What we do today is not very common for CMOs, because quite frankly they are still comfortable with spending their digital marketing budgets with Google and Facebook. The irony is if you’re a company of a certain size and scale then you’re capped in terms of a certain market share, so the reality is that everybody has been a customer of you at least once – and within that type of business if you keep going back to Google and Facebook to bring your own customers back then after a point there’s going to be no new customers attracted. I believe that it’s ironic that so many businesses pay Google and Facebook to bring their own customers back to them,” said Singh.
Singh is cognisant of the fact that these attitudes have been harboured over the last two decades and won’t simple change overnight.
He also is acutely aware of the fact that is platform is complex, but he revealed how the company has invested heavily in educating the market on what marketing retention really means in the new digital economy.
“The platform we have is complex and complicated, unlike other versions of our product, making it work takes time. The integration process can take up to 4-5 weeks, and if you’re a large company then that integration process could take up to 3 months. We have invested a lot of time in educating customers on why they need the product. We run a large University program and certification program designed to educate people on what marketing retention really means, how you think of marketing retention as a stack, and how you set it up. We have certainly overinvested in terms of educating the market in an effort to really make them understand what it is we are talking about – and why it is something they need to be paying attention to,” said Singh.
A strong selling point for Singh and his team is the fact that the top customers who use their platform effectively have yielded tremendous economic benefits as a result.
“Look, nearly one third of our top customers incremental revenue comes from WebEngage, so that’s illustrative of how much the impact is when the platform is utilised properly. However, it’s a cycle, they don’t get there on Day 1, but again like I said it’s their own customers – we’re just helping to bring them back,” said Singh.
In the world of venture capital and fundraising, it might be suggested that many tech companies are more than happy to take investment regardless of the risk.
However, that is a claim that can’t be levelled towards WebEngage, who have adopted a very ethical approach when it comes to raising capital.
“In the context of fundraising, we believe that if we can’t make money for the people that we are taking money off then we would rather not risk it. That’s our approach, we are not saying it’s the right approach for everybody, but as a company we feel obligated when we take capital off people to return it with the promises we have made,” said Singh.
Interestingly, Singh believes that the burden of returning that capital and some doesn’t just lie on his shoulders.
“It’s not just my responsibility, the responsibility is on the entire company. I believe it is the responsibility of everybody at WebEngage to make sure that all the shareholders and investors get their return on the capital that they have invested. That takes a lot of maturity, your teams and functions need to mature, and your internal reporting and mechanisms need to mature for you to be ready to take that risk,” said Singh.
He concluded a brilliant conversation, by once again reiterating that it wasn’t that he didn’t want funding earlier in their journey, but that the company had to be ready before taking that next step.
“The reason we didn’t jump into that boat earlier as a company, wasn’t because I didn’t want it, the primary reason was we were not ready to take that plunge. In the last year, we came to the conclusion that we had found our niches that we wanted to focus on, both in terms of customer and regional segments – and we also identified the long-term plan of what this business is going to be, and what we are trying to build. Once we established this then we were ready for investment,” said Singh.