By Allan Maurer
RALEIGH, NC – Ken Romley, CEO of Zift Solutions, which sells software as a service that helps companies boost sales through their channel partners, says taking venture capital money makes good sense “Once you have momentum. Being a year ahead of people is huge.”
Zift, founded in 2006, recently took $500,000 from Southern Capitol Ventures, which Romley tells us is the first chunk of a $1.5 million round the company will use to expand its marketing and sales efforts.
Zift raised the money to build on the head start it has with its marketing suite. “Once you have momentum, it’s hard for competitors to catch up. Look at Salesforce.com.
Helping smaller firms do what larger ones do
Also, on the Internet you can open up pieces of your platform and get a wider community working to make your software better. Once you build that community of people with a vested interest in your success, it’s harder for others to come into the market.
Romley says he saw the opportunity for a product such as Zift’s while with the last company he founded, SmartPath. There, he says, “I learned what direct marketing could do to show an uplift in revenue and increase the number of clients a company has.”
He took some time off after SmartPath sold to DoubleClick, and “I was thinking about hte great disparity between what a company like American Express could do with its marketing and what smaller companies do. It’s like night and day.”
So he asked himself, “How could we make it possible for a smaller company to do what the larger ones do?”
Romley notes that development and marketing of a software product is much cheaper than it used to be. “You can use the Amazon cloud as a delivery structure,” he says. “It can support worldwide deployments.”
That’s another reason Zift wanted a VC boost. “Lowering the cost of development means more people can get in. That’s why once you’re established you have to make sure you stay state-of-the-art. There are always guys looking to take a bit of your market share.”
Still, the marketing software Zift developed took about a year and a half for the basic package and the company, like most software firms, continues to add new features.
Co-op marketing money often unspent
The company’s marketing suite helps product suppliers–HP, Red Hat, AOL, Novartis and others–deliver branded multi-channel marketing that includes online advertising, content syndication, SEO optimization, event management and e-mail marketing to channel partners.
A company such as HP uses it to allow channel partners to log in and customize HP content, add their own logo and contact information and send it out.
Most large suppliers have cooperative marketing programs and allocate significant amounts of dollars for their channel partners to run campaigns. But much coop money goes unspent because channel partners don’t bother with the paperwork of applying and accounting for the marketing bucks.
Zift takes the friction out
In 2006, Romley tells us, of $1 billion in marketing help available to supplier partners, a quarter ($250 million) went unspent.
“We take out all the friction in getting access to that money,” Romley says.
The Zift suite is also cheaper than the typical suites out there costing $10,000 or $15,000 year. The Zift base price for a channel partner is $1,000 a year.
Prices to suppliers are based on the size and type of campaign they run.
“It’s all cloud based with nothing to install. It’s very quick to set up. You turn it on and can run campaigns almost immediately.”
That’s quite different from the old way of selling software, Romley adds. “You used to have to talk to the IT department, get the box set up, install it. Now there’s none of that.”
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