EchoStar Shares Fly High on AT&T Bid Rumors

Telecommunications giant AT&T may make an offer to buy Dish Network parent company EchoStar, according to a published report that sent EchoStar’s stock soaring Monday.

AT&T is in the process of preparing to go public with a formal offer for EchoStar, something that could happen before the end of the year, according to a story in Barron’s over the weekend.

The report cites the recent drop in EchoStar stock, which had lost 24 percent in a little less than a month — dropping sharply after the company missed its quarterly financial targets — as a motivation for AT&T to consider the move, which has been rumored on and off for months.

May Move Quickly

AT&T is motivated to move quickly to ensure it can get any deal reviewed by regulators during the current administration rather than taking a chance the regulatory environment could change after President Bush leaves the White House in January of 2009, the newspaper said.

EchoStar shares were up nearly 20 percent in midday trading despite an overall down market, rising US$7.63 per share to $47.46. AT&T shares were down more than 4 percent, meanwhile, to $37.85.

AT&T declined to comment on the reports; EchoStar did not respond to a request for comment from the E-Commerce Times.

Making Odds

AT&T’s motivations are clear to discern: Controlling Dish TV would enable it to offer its customers a full bundle of services: phone, Internet, wireless and video services. AT&T is building out its own video service, known as “Uverse,” but that is expected to take years to reach market saturation.

A deal for EchoStar could be worth as much as $30 billion, with Barron’s saying discussions have taken place about AT&T offering $65 per share, though EchoStar may try to get a higher final price.

EchoStar fueled speculation it would be put up for sale when it recently announced it would split itself into two units, one controlling the satellite services and the other holding the company’s technology assets.

There is a 65 percent chance of an AT&T-EchoStar merger over the next year, Citigroup analyst Jason Bazinet said in a research note published Friday.

EchoStar’s Dish TV service trails only DirecTV among satellite television providers, with 13.7 million subscribers at the end of the second quarter.

Another Base of Customers

AT&T, meanwhile, has seen rival Verizon gain much more traction much faster with its FiOS fiber-optics Internet and video service, recently reporting that it had passed the 1 million customer level while aggressively seeking to add to the number of markets where it is licensed to deliver video, noted independent telecom analyst Jeff Kagan.

Having a strong video offering is critical for phone companies as they compete head-to-head with cable companies to deliver full bundles of services, Kagan told the E-Commerce Times.

“They continue to roll out Uverse, but it’s clearly taken longer to gain traction than even they thought it would,” Kagan said. Earlier this month, AT&T said it had 126,000 U-verse subscribers, and lowered its targets for the nationwide rollout of the service.

Owning EchoStar may be a way to offer video to locations where its video network is not yet built out and would give it another base of customers to sell additional services to as well.

Familiar Refrain

The idea of linking with satellite TV carriers is not new for phone companies. In 2003, AT&T predecessor SBC Communications, later merged with AT&T, attempted to buy DirecTV.

More recently, AT&T has benefited from its past acquisitions and its partnership with Apple on the iPhone, which have helped it record double-digit profit and revenue growth in recent quarters.

AT&T is eager to supplement that wireless-driven growth with success in other parts of its business, however, said Yankee Group analyst John Jackson.

“AT&T and Verizon have been benefiting the most from the consolidation in the wireless space,” Jackson told the E-Commerce Times. “But they still face plenty of competition for home customers from cable companies and from one another.”

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Intuit’s $12B Mailchimp Purchase Breathes New Life Into Email Marketing

Intuit on Monday announced an agreement to acquire Mailchimp, a global customer engagement and marketing platform for small and mid-market businesses, for $12 billion in cash and stock advances. The purchase could be the linchpin that thrusts the mostly financial software company into solving more fertile mid-market business challenges for its customers.

The planned acquisition is part of Intuit’s mission to become an AI-driven expert platform. With the acquisition of Mailchimp, Intuit will accelerate two of its previously-shared strategic big bets: to become the center of small business growth and to disrupt the small business mid-market, said the company in its announcement.

Intuit’s acquisition of Mailchimp sends a great message to all entrepreneurs around the globe that venture capital is not always necessary, observed Michael Kawula, co-founder of CBA, a marketing agency for YouTube monetization. Mailchimp is a bootstrapped success story that has not raised any outside venture capital.

“This is a very clever growth strategy for Intuit, who wants to get in front of SMBs, which is difficult and expensive. Similar to HubSpot’s recent purchase of The Hustle newsletter, a much smaller acquisition, this also is brilliant,” he told the E-Commerce Times.

The acquisition marks a significant impact in industry, according to Osiris Parikh, sales marketing manager at Lilius. He also sees the deal as another reminder that email marketing is not dead — and data is power.

“Intuit has made a strong move to broaden its portfolio and become a leader in catering to the needs of SMBs. It is also a great story of success during Covid-19,” he told the E-Commerce Times.

Deal Basics

Intuit provides a global technology platform that makes TurboTax, QuickBooks, Mint, and Credit Karma. Intuit and Mailchimp will offer an innovative, end-to-end customer growth platform that allows customers to get their business online. It will also enable them to manage marketing, customer relationships, payment processes, and access insights and analytics, along with optimizing their cash flow and staying compliant with experts at their fingertips, according to Intuit.

Key to this process is Intuit’s ability to enable businesses to combine their customer data from Mailchimp and QuickBooks’ purchase data to get the actionable insights they need to grow and run their businesses with confidence.

“We’re focused on powering prosperity around the world for consumers and small businesses. Together, Mailchimp and QuickBooks will help solve small and mid-market businesses’ biggest barriers to growth, getting and retaining customers,” said Sasan Goodarzi, CEO of Intuit.

Mailchimp brings to Intuit technology at scale along with global customer reach.

Founded in Atlanta, in 2001, Mailchimp began by offering email marketing solutions. The company evolved into offering customer engagement and marketing automation processes fueled by an AI-driven technology stack. Mailchimp’s data and technology spans 70 billion contacts and more than 250 rich partner integrations. Its AI-powered automation at scale fuels 2.2 million daily predictions.

“Over the past two decades, we have vastly expanded and evolved Mailchimp’s platform to help millions of small businesses around the world start and grow,” said Ben Chestnut, CEO and co-founder of Mailchimp.

Why Mailchimp’s Worth It

While the email marketing sector is pretty crowded, Mailchimp stands out in terms of size and scope. The company reportedly has 13 million total global users, 2.4 million active monthly users, and 800,000 paid customers, noted Charles King, principal analyst at Pund-IT.

“Plus, half of its customers are outside of the U.S. Additionally, while people tend to focus on the mass/might of large enterprises, small businesses are really the heart and soul of most economies,” he told the E-Commerce Times.

The acquisition likely represents a lucrative opportunity for Intuit to integrate Mailchimp data with QuickBooks and provide greater analytical capabilities to customers. The synthesis of financial and marketing data in this case provides valuable and actionable insights about an organization’s clients, added Lilus’ Parikh.

“It’s also a great diversification of offerings to centralize SMB operations through one platform and benefit from Mailchimp’s established user base,” he said.

Another supporting factor for Intuit’s interest in Mailchimp is the renewed stature of email, according to Elice Max, co-owner of EMUCoupon and someone who has been involved in online marketing for eight years.

“Email marketing has made a comeback in recent years. With increased digitization caused by the pandemic, all digital mediums including email have gained a renewed importance,” she told the E-Commerce Times.

Email Marketing’s Resurgence

Technology giants are looking to build more integrated and holistic solutions. Microsoft recently bought Clipchamp, a video production tool. Both companies are looking to build platforms for the new tech-savvy SMBs, Max Suggested.

“More than anything, it means a renewed confidence in the field. Experts have been talking about the death of email marketing for a while now. But a $12 billion acquisition by a big player like Intuit means email promotion is alive and kicking,” she said.

Another factor is Intuit keeping its eye on the ball. It is important to remember the significance of Mailchimp as the pioneer in marketing automation and email marketing in particular.

“Intuit is looking to make a statement that it wants to become more than a financial software company,” Max observed.

QuickBooks Synergies

One of the motivations that lies behind Intuit’s purchase of Mailchimp is its desire to lead a revolution in the CRM capabilities of SMBs, according to Will Ward, CEO of Translation Equipment HQ . Think about the effect the pandemic has had on the popularity of remote work and the amount of remote SMBs being established.

“You would expect there to be a lot of growth potential here in the next few years. With Mailchimp and QuickBooks, Intuit is providing an end-to-end customer growth platform, and with around $20 billion invested already its belief in SMBs is evident,” Ward told the E-Commerce Times.

Like any other system that handles transactions such as orders and payments, you need to work closer to the actual customer channels. With the Intuit e-commerce product, launched about a year ago, this seems like a natural step by adding marketing automation and reaching out with its e-commerce offering to the MailChimp customer base, suggested Johan Liljeros, general manager and senior commerce advisor, North America for Avensia.

“The acquisition has added synergies between the platforms while still being able to operate as independent platforms. Looking at Intuit’s offerings, it appears they are moving towards expanding [into] digital transactional experience,” he told the E-Commerce Times.

Final Thoughts

Email marketers should be ready for disruption along with other business services providers. Intuit has been both savvy and aggressive in the way it built its business, effectively becoming the 800-pound gorilla of small business accounting and tax solutions, according to Pund-IT’s King.

“With that kind of ally behind Mailchimp, life is going to become a whole lot more ‘interesting’ for other email marketers,” he predicted.

The Intuit-Mailchimp deal should offer Intuit customers significant benefits, such as new solutions and services for bolstering their businesses. At the same time, the deal highlights the fact that old technologies can continue to be vital and dynamic.

“For years, many have claimed that email is dead or dying and quickly being replaced by whatever the tech du jour happens to be. Mailchimp — and now Intuit — beg to differ,” King quipped.

Jack M. Germain

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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Making Sales Safe for Process

As a system of record, Salesforce, as well as just about every other SFA vendor, has stayed scrupulously neutral in the sales process debate of the last couple of decades. That is now changing, sort of.

A sales process is a set of protocols that an organization uses to conduct selling. One’s process needs not be complex, many organizations settle on processes that have around seven steps. But a sales process that everyone in the organization adheres to is fundamental to that organization’s success. The reasons are not complicated.

For about 20 years Jim Dickie and his partner in research Barry Trailor conducted an annual survey of thousands of sales organizations. Their results were fascinating. They found, for instance, that the best performing sales organizations were the ones that not only had a sales process, but also wrote it down and held their salespeople to it. Process is important, they discovered, and avoiding one led to mediocre results.

In fact, companies that had a process and enforced it did better on average than companies that sort-of had a process but didn’t really enforce it; and they, in turn, did better than those with sales teams that had no process and were most reactive to conditions in the market.

Did I mention that a defined sales process helped the best companies to be proactive and to engage as trusted advisors?

Sales process works. For example, most sales processes require a sit down with the ultimate money person, the individual with a budget to spend on your type of product. The reason is simple. The money person is the only one you can trust to tell you that, yes, there is a budget, and it will be spent this year because we need such a product.

Show Me the Money Person

Smart tech companies usually bargain the product demo and proposal process for access to the money person. Way too many deals have gone south because no one checked with the money person and plunged headlong into demonstration and selling.

Often the deals that languish do so because the salesperson was never dealing with a person who could say yes, I’ll buy that. A sales process is put in place (by the savvy companies) to avoid such misuse of precious time and resources that must be dedicated to revenue generation.

Finally, this is not to say that companies with established sales processes close every deal. They certainly don’t. But having an established process gives managers the ability to ask penetrating questions like what’s the customer’s time frame, do they have budget, how do we know this, how did the demo go, and other such tests. Negative answers force a decision to move on to other opportunities rather than further invest in a deal that is at best going sideways.

Modern Selling

All of this is has set the stage for more modern selling. For decades, the sales process has been optional in too many organizations. Dickie and Trailor’s data suggested that only a minority of organizations could be classified as top performing.

In the majority of situations, sales reps did what they wanted, used SFA as a system of record, and updated it perhaps weekly or in order to get expenses reimbursed. Sales organizations were too afraid to challenge most of their reps for fear they’d quit and take their data with them.

A few years ago, for instance, I did a project for a $300 million company whose reps kept all their data on their phones. The company wanted to modernize its approach to customers, but there was no central repository of customer and prospect data, and the business didn’t want to have to deal with a walkout by the reps. In that case, a promising SFA/CRM project was scrapped.

Things have changed. A new generation of salespeople, call them digital natives, has arrived — and while they don’t like entering data into their SFA systems as much as their predecessors, they’ve at least made peace with the necessity of SFA.

This generation is also acutely aware that they’re working alone in a competitive world, and they aren’t afraid of asking for help. Into this environment Salesforce has teamed with Slack to supply, if not a defined sales process, at least a defacto one.

Slack is an internal communication tool that can help salespeople to connect not only with their managers and peers but also to the network of people and internal departments that can make a difference in furthering a sale. There are other uses as well. In fact, there are few if any uses for Slack in the front office that have not been attempted with other parts of CRM. Two examples will suffice.

Sales and Support

Salesforce has, for a while, championed the idea of swarming in support matters. A swarm is an unofficial or ad hoc group of experts convened to solve a customer problem, especially one that has escalated through normal service channels without resolution.

A swarm does its business, solves the problem, and dissolves back into the company. Chatter was the Salesforce tool initially used for this and it was quite good. But swarming with Slack further reduces internal friction and to a degree obviates the need to declare a swarm, as I understand it.

There’s a similar situation in sales, especially where managers need to balance organizational needs against those of a single deal.

For instance, and here’s where process becomes pronounced: two reps might want to book a sales engineer or SE for a demo on the same day. The natural question a manager might ask is whether the reps have spoken with the money person and confirmed that there is a deal in the works.

Now, just to complicate things, there are good reasons to give a demo even if there has not been a confirmed visit with the money person. Such a reason might be that one of the customers wanting a demo is already a customer seeking an upgrade. In that case the sales manager may feel comfortable extending the courtesy of a demo.

Slack Integration

Regardless of how those scenarios work out, having a solution like Slack means salespeople don’t have to wait for an email notification or voicemail exchange — especially if they are working from a remote location and can’t hope to bump into people at the water cooler.

A tool like Slack is also more general purpose. A rep might be able to communicate with a manager through a CPQ system, but that approach primarily focuses on aspects of a deal — like discounts and warrantees — but not “can we demo?” A CPQ notification might also run through email, thus slowing things down.

Also, some such questions might be better dealt with earlier in the sales process rather than when generating a quotation that can carry the weight of a contract.

When I first heard about the Salesforce-Slack deal I was skeptical — and to a degree I still am. So far, the messaging is about events which are parts of processes but there’s no explicit link and without it you can be left thinking about an array of dissociated events. Scale is important.

But if these scenarios provide examples, then it’s likely that other uses will arise that further cement the integration. That’s a good last point. The two products aren’t fully integrated yet, and more business cases are likely to emerge, so watch this space.

Denis Pombriant

Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. Email Denis.

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