There’s no shortage of automated marketing solutions currently on the market — and many call Austin home. But one local startup has chosen to capitalize on an area many other companies have neglected: the returning customer.
While many marketing solutions for small and mid-sized businesses hone in on driving new business, eRelevance focuses on the repeat business of returning customers, instead. This approach, combined with their tech-first thinking, has propelled the company to its sixth consecutive quarter with triple-digit revenue growth, with about 800 new clients added along the way.
eRelevance’s existing investors have taken notice, as the company this month closed an additional $5.1 million funding round led by Rally Ventures, Chicago Ventures, Miramar Venture Partners, Martin Investment Holdings and Austin’s Capital Factory. The fresh infusion of capital brings the startup’s total funding raised to over $13 million since its 2013 launch.
“Our current investors are so excited with what we’re doing,” said eRelevance co-founder and CEO Bob Fabbio. “What this will really do is get us to the next financial milestone. When you get to a $10 million annual recurring revenue rate, your valuation goes up significantly. We had a discussion about raising a bit more capital internally at a fair price that allows us to get to a place where ultimately the market will pay handsomely for our progress.”
While many SMBs recognize there is revenue in returning customers, Fabbio said they often lack the tech resources and marketing know-how to fully capitalize on opportunities. He said many businesses end up assigning the responsibility of increasing revenue from those existing customers to a generalist — which at startups usually means someone who has a little too much on his or her plate. This leads to things like difficult-to-track email blasts that often generate little to no return.
“(Companies) conclude falsely that there must not be any more revenue left in their existing customer base,” said Fabbio. “It’s just a complete misdiagnosis. They don’t have the right tools and the right levels of sophistication to really know how to market their customer base and surface more revenue. And that’s what we do.”
Fabbio said the company will use the funding round to expand their sales and marketing teams to meet the current demand for customer marketing automation services, with plans to grow both teams by five times over the next 12 months.
But the company is well acquainted with growth. At the start of 2016, eRelevance had just 12 employees. Today, the company boasts a strong 58, with plans to end 2017 with around 80 employees.
Despite those demands, Fabbio said that he only looks for employees who are “the best of the best.”
“They have to be wicked smart, willing to come in and be an impact player,” he said.
In addition to growing the employee headcount, eRelevance will also focus this year on advancing their internal platform to further separate themselves from competition.
Image provided by company website.