Dun & Bradstreet CEO Robert Carrigan Steps Down; Q4 Earnings

DNB Hoov Company Profile of DNB
Dun & Bradstreet’s company profile displayed within their D&B Hoover’s product.

Last week, Dun & Bradstreet CEO Robert Carrigan resigned as CEO, board member, and Chairman.  In his absence, Thomas Manning has been appointed Chairman and interim CEO.  Manning has been a board member since 2013 and Lead Director since 2016.  He previously served as the CEO of Cerberus Asia Operations & Advisory Limited, CEO of Capgemini Asia, and CEO of Ernst & Young Consulting Asia. He was also a senior partner with corporate strategy firm Bain & Company where he led the global IT practice in Silicon Valley and Asia.

No reason was given for Carrigan’s departure beyond that it was a mutual decision.

“Over the last four years we have made progress transforming this company. We’ve improved our data and analytics, developed solutions and capabilities to serve new customer use cases, and modernized our products and platforms.  The Board is confident in the strategic direction of the Company, and fully believes that this business can deliver sustainable mid-single digit revenue growth and expanding margins.  Our number one priority is accelerating value creation for shareholders.”

  • Dun & Bradstreet Chairman and interim CEO Thomas Manning

However, the company is not growing revenue and profits quickly enough.  To address the slow growth, the firm engaged McKinsey & Company two months ago in a strategic and operational review “to help us find ways to speed up the time to realize value,” said Manning.  “The first phase of their work validated our strategy and identified barriers to growth and cost opportunities. The next phase of their work will include a full portfolio and business assessment and we are open to considering all options for value creation that may be identified.”

McKinsey validated the basic DaaS strategy around premium company, contact, and risk data.  McKinsey’s primary concern was the “breadth of our offerings and distribution channels” which increased the level of operational complexity.  The updated strategy will look to “simplify and streamline the business.”

Dun & Bradstreet is also looking to “apply more specialization to our selling activities as we go deeper into the sales and marketing space,” said Manning.  “As we expand our sales and marketing value proposition from being primarily a static data supplier to becoming a dynamic player in the digital sales, marketing and advertising space, we are working to make sure that our organization, go-to-market strategy and processes are aligned with that goal.”

The firm hired David Godfrey, who previously ran Global Sales at Gartner, to oversee go-to-market strategy and execution.  He will be reporting into Manning.

James Fernandez, new Lead Director of the Board, said, “As Dun & Bradstreet continues its work to drive sustainable growth, the Board believes now is the right time to transition the Company’s leadership. We are pleased to have a leader of Tom’s caliber and experience to step in as interim CEO. The Board will continue to support the Company, and lend our expertise to the organization and Tom during this transition period as we conduct our search for a permanent successor.”

Q4 Earnings

Q4 earnings increased 3%, but only 1% organically, to $527 million.  Total revenue hit $1.75 billion in 2017 with 83% in the Americas.  The firm maintained expense discipline resulting in a ten-basis point improvement in margins while investing $40 million on initiatives which “transform our technology platforms in order to meet our customers’ modern-day needs,” said CFO Richard Veldran.  “Modernizing delivery of our solutions is a critical component of our strategy.”

Data-as-a-service delivery continues to increase.  Nearly 30% of Americas revenue came via as-a-service solutions “which makes our data stickier and more useful for our customers and drives higher-value revenue.”

Amongst the 2017 initiatives were upgrades to D&B Credit and new D&B Optimizer solutions for Salesforce and Microsoft.

Deferred revenue was up 3% year over year before M&A activity and currency adjustments.  Growth was attributed to D&B Credit, D&B Hoovers Q4, and the D&B Direct API.  President and COO Josh Peirez noted that the D&B Credit Suite revenues were no longer declining and that the company is well-positioned in D&B Credit, D&B Hoovers, and D&B Direct.

“We think we’re well-positioned to address the competitive challenges.  We’re also pleased that McKinsey has validated that opportunity and that strategy and helping us to make sure that we are packaging and bundling these things properly.”

  • Dun & Bradstreet President & COO Josh Peirez

Taxes, which were 31.4% in 2017, are expected to drop to the mid-20s due to the US corporate tax reforms.  The reforms will also allow the firm to repatriate $265 million to reduce debt levels.

No guidance was provided as the firm is beginning their operational review.  Veldran promised more details on the Q1 call.

Dun & Bradstreet raised its quarterly dividend by two cents to $0.5225 per share.

The market reacted very positively to the announcements, driving Dun & Bradstreet’s stock price up nearly 8% after the earnings call.

Segment Growth

Sales & Marketing Solutions (S&MS) rose 4% in the Americas to $240.1 million in Q4.  Growth was led by Sales Acceleration products which rose 9% to $84.3 million.  For the full year, Sales Acceleration grew 10% to $288.4 million in the Americas with the Avention acquisition contributing twelve points of growth.  Legacy Hoover’s drove down organic Sales Acceleration revenue with traditional Hoovers revenue declining by mid-single digits.

Revenue for the new D&B Hoovers service (Dun & Bradstreet content delivered through the Avention platform) increased in 2017.  However, the decline in revenue from the Data.com partnership will result in a decline in 2018 Sales Acceleration revenue.  Data.com generated around $50 million in revenue in 2017 with the firm continuing to sell through August 2017, resulting in a flat year.  Veldran projects a $15 million decline in Data.com revenue.  Dun & Bradstreet is looking to recapture some of that decline as new D&B Hoovers and D&B Optimizer for Salesforce contracts.

Peirez is quite pleased with the trajectory of the D&B Hoovers business.  “We think our products are far better than anything else in market. We continue to see the overwhelming majority of customers that are buying our D&B Hoovers product buying the higher level of the product with the integrations to CRM, so that’s extremely encouraging for us.”

The firm is also moving to migrate its Hoover’s customer base over to D&B Hoovers.  In Q4, more than ten percent of the legacy base moved to the new platform as Dun & Bradstreet “started to move very aggressively in getting the customers upgraded,” said Peirez.  While the D&B Hoovers Suite grew low-single digits in its first year, Peirez expects growth to accelerate in year two.  The company has told users that the legacy platform will be phased out at the end of the year.

Advanced Marketing Solutions grew 2% in Q4 to $155.8 million in the Americas.  For the full year, growth was 2% to $383.9 million.  While revenue was up mid-single digits in H2, the product line was weighed down by H1 weakness.

Outside the Americas, S&MS grew 17% to $16.9 million in Q4.  For the year, S&MS non-Americas revenue rose 18% to $60.4 million.  Growth was driven by Sales Acceleration products, including the acquired Avention product line.  Sales Acceleration products jumped up 24% to $7.5 million in the quarter and 39% to $27.7 million for the year.

The D&B Hoovers Suite rose 26% to $42.6 million in the Americas in Q4 and 22% to $166.5 million.  Outside of the Americas, D&B Hoovers Suite rose from $0.6 million to $5.3 million in Q4 and $3.1 million to $16 million.  While the classic Hoover’s product line had little overseas sales, the new D&B Hoovers product line, built on the Avention platform, benefited from a longstanding presence in the UK, Singapore, Australia, and India.

Are We Really Selling Quarter-Inch Holes?

Black & Decker Cordless Drill (Source: Wikimedia Commons)
Black & Decker Cordless Drill (Source: Wikimedia Commons)

Sales and marketing often forget to focus on the unique value proposition they offer their customers.  They focus on product features instead of customer benefits.  There is an oft-repeated saying in marketing which captures this logic perfectly:

“People don’t buy quarter inch drills, they buy quarter inch holes.”

The electric drill was first developed by Black and Decker and patented in 1917 as a tool for their own production facility.  Interestingly, the firm only recognized the value of the tool for consumers when employees began taking it home.  Ironically, the tool often used to discuss the value of thinking broadly about use cases and customer needs was originally designed for a limited purpose, the Black and Decker plant, became an indispensable DIY consumer and industrial product.

A product/technology focus emphasizes the features of the drill and not the benefits of quickly making holes of specific sizes as needed, where needed.  Marketers need to translate many product features to a distinct set of customer benefits and roll them into a unique value proposition that differentiates their product in the mind of potential customers.

Understanding the needs of the customers is also important for the product and engineering teams.  Otherwise, they will view both the competition and the market too narrowly.  If you are selling quarter inch drills, you view your competitors as quarter inch drill manufacturers.  If you view your product as on demand tools for boring holes and attaching objects, you recognize a broader set of competitive and complementary products including bores, glues, solder, welding supplies, nails, screws, bolts, etc.  You would also recognize that electromechanical torque can be applied to screws, bolts, and nuts, expanding your product line into adjacent markets.

Focusing on product features is also a bad practice for sales reps.  As with marketing, emphasizing features prevents them from communicating the unique value proposition of your products and services.  If your sales reps are too often complaining about losing on price or the need to constantly discount off list price, then either your prices are too high or your sales reps are engaged in too much feature-speak and failing to communicate customer benefits and value.  Of course, these reasons are not mutually exclusive.  You could have two root causes to your pricing difficulties – your prices may be too high and your sales reps may be failing to communicate value.

Another problem with focusing on features is it treats your product as little more than a commodity.  A differentiated service is less subject to price erosion and heavy discounting.  This is one reason I tell my clients in the sales intelligence space not to compete on database size.  While there are benefits to larger databases, users aren’t usually purchasing big databases [feature], they are purchasing sales insights [value proposition] that make them more effective at building prospecting lists [benefit 1], qualifying leads [benefit 2], managing accounts [benefit 3], reducing CRM data entry [benefit 4], improving analytics [5], and selling deeper into organizations [benefit 6].  Thus, it isn’t the size of the company and executive files, but the breadth of data insights that help reps more efficiently and effectively sell.

So as you hold your 2018 sales kickoffs, make sure to communicate your new product’s value proposition to your salesforce.  Likewise, evangelize your company’s vision during new hire training, product road mapping sessions, and all hands meetings.  In the end, customers are interested in your value and how you benefit them, not RPM or database size.

TechTarget Priority Engine: Strong Q4 and Product Enhancements

Priority Engine combines Intent data with predictive analytics, technographics, and contacts.
Priority Engine combines Intent data with predictive analytics, technographics, and contacts.

Technology media company TechTarget announced strong Q4 growth for their Sales Intelligence Priority Engine service.  The firm added over 40 new Priority Engine and Deal Data customers in Q4 with revenues more than doubling year-over-year.  Priority Engine benefited from the addition of DiscoverOrg technographic and contact intelligence during the quarter.  The service combines intent, predictive, and contacts intelligence into a single solution.  Intent data is sourced from their 140 B2B media tech web sites containing 550,000 indexed content pages, many of which make the first page of Google technology searches.  Each day, the firm has one million buyer interactions tied to its 17 million members which it then tags to 10,000 technology topics.  The majority of members have technology titles, but TechTarget also supports five million non-IT members.

Content is available in English, Spanish, French, German, Portuguese, Chinese, and Japanese.

TechTarget claims that its hand-indexed, technology-focused editorial content results in a better indication of technology intent than machine-indexed intent files built across a broader set of B2B media sites.  Furthermore, because TechTarget has member ids associated with site activity, they know who at each company is researching specific topics, providing surge data tied to specific individuals.  Other intent vendors provide anonymous intent.

“Real purchase intent insight is actually made, not scraped from general-purpose websites.  It begins with relevant, useful content that provides critical value to professionals as they look to solve business challenges and make buying decisions. By observing and learning from their content consumption patterns as they happen, marketers can market and sellers can sell at the right time with greater relevance. Our ability to deliver real purchase intent starts with our extensive content footprint and the hyper-relevant audiences that we’ve built.”

  • TechTarget CMO Josh Steinert

Priority Engine identifies “vendors actively influencing this deal,” core and related topics, and products and vendors.  Installed product and vendor data is licensed from HG Data and viewable by category.  Users can also search installed technology at an account by product, vendor, and category.

Accounts are ranked on a weekly basis with the service providing “an early radar on who’s buying from your named account lists.”  TechTarget provides real-time analysis of the “most active accounts and named prospects conducting purchase research” and ranks those accounts by “likelihood to engage.”  Prospects are segmented by geography and hundreds of marketing segments.  The solution “creates a world-class ABM solution that combines breadth of reach, purchase power insights, and the ability to pinpoint and influence key prospects in one place.”

By combining DiscoverOrg contacts with member search data, Priority Engine provides “direct access” to the demand units of named active researchers and key influencers.  Joint customers will have full access to DiscoverOrg’s editorially verified decision makers alongside TechTarget contacts that are conducting active research.  The partnership displays the “Target Buying Team within a single dashboard.”  Priority Engine customers that have not licensed DiscoverOrg will be limited to ten names per account.

TechTarget announced a set of enhancements last month which includes weekly contact updates, Marketo integration, regional subscriptions (North America, EMEA, United Kingdom/Ireland, APAC, ASEAN and India), and integration with internal datasets such as sales territories and web site visitors.

“We’ve moved beyond company-level insights; Priority Engine gives you access to ranked accounts AND the actual buyers researching purchases at those accounts,” said TechTarget SVP of Products Andrew Briney. “The unique purchase intent insight available within Priority Engine helps marketers generate demand more efficiently, accelerate ABM effectiveness, and deliver a more substantive contribution to sales.”

RelPro: Enhanced Firmographics

A new RelPro company concordance provides firmographic variables for screening and account planning.
A new RelPro company concordance provides firmographic variables for screening and account planning.

Sales Intelligence vendor RelPro added a firmographics layer to its contact intelligence screening. Users can now filter against SIC/NAICS codes, Industry Keywords, Public/Private Status, and Web Ranking. According to CEO Martin Wise, the new feature has been “very well received by clients.”

RelPro continues to build out its Chrome extension for on-demand company and people intelligence based upon the current website. Decision maker intelligence includes emails, direct dials, and corporate phones. Chrome extension features include contact send to CRM, follow, open the full profile within RelPro, and follow for weekly email alerts.

“RelPro’s latest firmographic and workflow enhancements represent another step forward in our mission to help clients grow their business and make the most of their precious time by delivering Integrated Relationship Intelligence to accelerate all stages of the B2B business development process (Marketing, Sales, Account Management and Research).  RelPro grew more than 3x last year and we aim to continue the momentum in 2018 with our growing enterprise client base and reputation for being ‘easy to do business with’.”

  • CEO Martin Wise

Wise noted that 2018 development plans are “on track.” This year, the firm is looking to add company and linkage analytics, corporate family trees, and ABM look-a-likes.

Sales Navigator Q1: Revenue Growth and Expanded Partner Network

Sales Navigator Employee Insights
Sales Navigator Employee Insights, a new feature added in Q1.

LinkedIn Sales Navigator had another strong year of growth in-line with its historical Compound Average Growth Rate (CAGR).  Extrapolating from data published prior to its Microsoft acquisition, LinkedIn Sales Navigator has global revenues between $300 and $350 million.  This would make LinkedIn the largest vendor of sales intelligence solutions with revenue roughly double that of Dun & Bradstreet (Hoovers, D&B Hoovers, Data.com, D&B360) and triple that of DiscoverOrg.

Doug Camplejohn, Head of Product at LinkedIn Sales Solutions, described the service as “one of the fastest growing SaaS B2B products in history.”

LinkedIn Sales Navigator rolled out its first quarterly release on February 7th.  Quarterly releases help LinkedIn manage its communications and ensure that admins and trainers are prepared for the changes.  Enhancements will roll out first to this group before becoming available to general users in subsequent weeks.

“In the early days of Sales Navigator, we chose to act like a startup and launch products as soon as they were ready, without much warning or pre-release training for our customers. We also acted independently, only integrating with a couple of systems, instead of opening up the platform to the dozens of types of sales applications a rep uses throughout their work week.  Starting today, we will release Sales Navigator product updates on a quarterly cycle to provide advanced communications and training for administrators and users so they have adequate time to familiarize themselves with new features and take advantage of them properly.”

  • Doug Camplejohn, Head of Product at LinkedIn Sales Solutions

The product is maturing as it develops connectors with other services and formalizes its releases and communications. “Sales Navigator is growing up and learning how to play with others,” said Camplejohn.

As part of this development, LinkedIn announced four new members of its Sales Navigator Application Platform (SNAP) partners. SNAP is a broad partner program that spans business intelligence, CRM, eSignature, MAP, Sales Acceleration, and Web Conferencing. A year ago, LinkedIn only supported Salesforce and MS Dynamics.

The new Oracle Sales Cloud integration displays LinkedIn prospect and contact data within the Oracle CRM.

A SugarCRM integration displays a LinkedIn dashboard within Sugar Opportunities, Accounts, Contacts, and Leads.

Implemented partnerships were also announced with Demandbase and InsideSales’ Predictive Playbooks. LinkedIn lists 11 future partners including Tableau, Adobe Sign, BlueJeans, Microsoft BI, Eloqua (Oracle Marketing), and SAP Hybris.

The SNAP announcements were part of the Q1 release which included a redesigned Account page, new alerts, seat transfers to enterprise accounts, and Seniority Level preferences.

Sales Navigator Q1 18: Seat Transfers, Additional Alerts, and Seniority Preferences (Oh My!)

SN Seat Transfers
If your firm has an enterprise Sales Navigator team account, you can migrate your standalone account to the enterprise account and let your employer pay your subscription fees.  Just realize that all of your current data (InMails, Messages, Saved Leads and Accounts, etc.) are being uploaded into the corporate account.

LinkedIn Sales Navigator adopted a new quarterly release system for 2018 and has begun rolling out its Q1 release.  Yesterday, I touched upon their redesigned Account profiles.  Today, I’m delving into other new features that are rolling out to clients over the next few weeks.  These include self-service seat transfers to enterprise accounts, expanded alerting, and a Seniority Level preference.

The new self-service seat transfer feature allows sales reps to import their Sales Navigator information into a corporate account. Thereafter, the corporation pays for the license. Migrated content includes Saved Leads, Saved Accounts, Saved Searches, InMail, Messages, InMail Credits, Notes & Tags, and personal Sales Navigator settings. However, when a rep leaves a firm, there is no way to migrate content back to the individual account (their LinkedIn connections are untouched). While activity that took place after the rep merged their account can reasonably be considered company intellectual property, the shared information contributed by the new rep should be returned to the individual’s private account afterwards.

Alerting for the PointDrive service (an enhanced email which directs users to an HTML page containing attachments and multi-media) has been modified to provide real-time email messages when an individual views PointDrive content. Alerts are suppressed for subsequent views by the same individual. The alert’s viewer data includes name, title, company, email, and location. The feature allows reps to reach out to viewers in a timelier manner (perhaps while still viewing the content). PointDrive also provides activity reports and identifies individuals to whom content has been forwarded.

LinkedIn added a new email alert called “Saved Leads Who Viewed My Profile.” According to LinkedIn, the mobile push notification for this event has the highest click through response rate. Sales reps perceive the trigger “as a potential buying signal and want to know ASAP when this happens.” LinkedIn added the near real-time email feature because not everybody has installed the Sales Navigator mobile app. The alert includes quick account and contact details along with account employment details by function for the past six months (if available). To avoid email SPAM, users are only re-notified of visits after seven days.

LinkedIn inserted a new variable for Seniority Level in its Sales Preferences which are employed for recommendations. Sales Navigator also added the option to quickly toggle preferences on and off during Account and Contact Searches. For example, a Boston-based rep for an enterprise Martech Solution can automatically target New England executives, Director or Higher, working in Marketing, IT, Finance, or Purchasing.

Preferences are set during the Sales Navigator onboarding process.
Preferences are set during the Sales Navigator onboarding process.

Sales Navigator Q1 18: Revised Account Profiles

LinkedIn redesigned its Account Page display as part of their Q1 2018 release.
LinkedIn redesigned its Account Profile display as part of their Q1 2018 release.

LinkedIn Sales Navigator formally announced their Q1 release last week. The new functionality, which is rolling out to admins and trainers first, will be unveiled to sales reps over the next few weeks. The release focuses on a redesigned Account page, but also includes self-service seat transfers, new sales email alerts, seniority preferences, and additional SNAP partners.

LinkedIn describes the refreshed Account page as “the most efficient way to get the information you need about your accounts.”

The new company profile page is laid out in a series of sections:

  • Company Summary – a company overview with employee count, industry, revenue, short description, URL, location, and contact information. The section also supports Add Tags, Add Notes, and Save Account functionality.
  • People Tab – three categories of people intelligence: saved leads, recommended leads, and connections into the account. The saved leads section is displayed in a list format with headshot, title, connections, geography, and recent activity. Recommended leads may be filtered by spotlights such as job changes, mentioned in the news, recent LinkedIn posts, shared experiences, and company followers. Recommended leads highlights job changes, news mentions, recent LinkedIn posts, shared experiences, and company followers. Connections are broken into three strata: first degree connections, TeamLink (co-workers) connections, and alumni connections based on the user’s college or university.
  • News & Insights Tab – company insights related to news mentions, LinkedIn posts, and executive hires. The section also includes recent headcount growth by department.
  • Head Count Growth – the headcount growth data has been available to premium users in core LinkedIn for over a year, but finally made it into Sales Navigator (see image on right). Employee estimates found in sales intelligence vendors are often difficult to obtain or out of date. LinkedIn has access to probably the most reliable employee analytics on the market. Not only can they provide current headcount data, but they also include this data by eight job functions (Art & Design, Business Development, Engineering, HR, IT, Operations, Program & Project Management, an Sales) and the change at the departmental and corporate level over the past six months, year, and two years. This data is invaluable to sales reps as they can determine the mix of employees by function at the firm, whether hiring has accelerated or decelerated over the past few months, and even which departments are hiring. Not only does this data provide talking points, but an acceleration or deceleration in hiring is a valuable signal in assessing whether a pipeline deal is likely to move forward or stall.Sales reps should be careful about taking LinkedIn employee counts as gospel. While the data is more accurate than other sources, it is likely to lag M&A activity and layoffs as members update their profiles. Thus, hiring (except for embargoed executive changes awaiting press release) will be more quickly reflected than layoffs. Employees of acquired firms may be slow to update their profiles, particularly if their subsidiary retains its brand. As such, the trend data is probably more important than the displayed employee count.For private investors and competitive intelligence professionals, the head count data can be invaluable for comparing peers and evaluating growth and hiring patterns across a segment.

    Unfortunately, Sales Navigator does not yet display all of the employment analytics found in the LinkedIn service so sales reps may still wish to toggle between the core LinkedIn service and Sales Navigator to review New Hires data, Notable Company Alumni, and the Total Job Openings analysis.

  • Recent Senior Management Hires – The Recent Hires section lists Directors and higher that recently joined the firm. Both current and previous roles are displayed along with tenure in the current position. New hires may be saved as Leads without leaving the page.
  • People Also Viewed – This section lists similar companies which were viewed after the current account. While the firms may be in the same industry, this section could include partners, companies from which the firm has hired key execs, vendors, etc. Each company includes a logo, employee range, industry, and location. The companies may be saved as Accounts without leaving the page.

New content includes an expanded set of revenue estimates, headcount growth data, the Saved Leads module, Spotlights and Insights in the Recommended Leads module, alumni in the Connections module, and recent senior management hires. Previously, only public companies had revenue data, but LinkedIn is beginning to build out revenue estimates for private companies with at least $1 billion in revenue. LinkedIn plans on building down these estimates to smaller companies.

“Our redesigned account page experience streamlines the process of landing new accounts or building relationships within existing accounts, by giving you the information you need, when you need it.  Now you can better understand whether the account is a good match, who you should be targeting, and how you can get a warm introduction.”

  • Doug Camplejohn, Head of Product at LinkedIn Sales Solutions

This is the first in a series of blogs discussing the Q1 2018 Sales Navigator release.  Part two discusses additional enhancements.