No. 8 – Knotice

Knotice – Brian Deagan, CEO, Jon Grimm, president & CFO

Q: Give us an example of a business challenge your organization faced, as well as how you overcame it.

The primary challenge Knotice has faced is rapid growth. Our company has grown significantly over the past five years based on selling an innovative Direct Digital Marketing SaaS software product that solves key problems marketers faced in online communications with their customers. Our product, Concentri®, drives additional revenue and reduces marketing expenses for its users.

As a result, Knotice has signed more new customers quarter-over-quarter for the past three years consecutively. From a revenue standpoint, the company has grown 89 percent, 65 percent and 56 percent over the last three years respectively and headcount from 12 in 2006 to 55 as of October 2010, and we are still expanding.

The challenges stemming from such rapid growth involve people. Our growth requires new employees on a constant basis; getting them onboard and keeping them. It is difficult to attract and retain top talent on a consistent basis.

To address this challenge, we use a two-pronged approach: become a high profile, “cool” company to attract people; and develop a desirable work atmosphere to retain people.

So far, so good. We have an incredible group of employees who are continually driving innovation and more growth. Our retention rate is very high. We are still in a growth mode and are constantly trying to build upon what we currently have in place to maintain an attractive image and a positive, supportive work environment that balances both work and personal time.

Q: In what ways are you an innovative leader, and how does your organization employ innovation to be on the leading edge?

Knotice has several points of innovative leadership. The first is on the product front. In 2003, we were watching online marketing technologies develop in their own silos, but we did not think that approach was in the best interest of marketers or their customers. In 2004, Knotice developers set to work to build an innovative SaaS software product that combines all the key elements for marketers to conduct targeted, interactive communications with their customers. The product was commercialized in 2006, which was still several years before research analysts and marketers starting writing and talking about the very thing Knotice had already built.

A second area of innovation is our sales and marketing efforts. We use our Concentri product to contact prospects directly. Using our product provides us with a very effective and efficient lead generation program. Without letting the cat out of the bag, our cost per lead is far below industry averages, and our conversion rate is solid.

The third area where we show innovative leadership is in employee attraction and retention. We have employed unique ways to attract employees through public relations, word of mouth and referral incentives via current employees. For retention, we have designed a culture, environment and compensation structure that, in combination, makes Knotice a very nice place to work. This has led to a very favorable retention rate and has driven HR costs down.

We will continue to innovate in product development, sales, marketing and customer service to maintain our growth and market position.

Q: What is the greatest lesson you’ve learned and how have you applied it?

The key lesson Knotice learned was “Don’t fight market forces.” In 2006, we thought we could change the marketing world, and our product would be so beneficial everyone would jump on it. Simply put, our product is the combination of several key digital marketing technologies, all built on the same platform.

This integration offers a highly focused means of marketing to the individual. Historically, these various technologies had been built at different times as point solutions within the evolution of direct digital marketing. We saw major benefits in offering all these features and technologies from a single source and vendor. So we built the product and formally launched it in 2007 selling “the whole enchilada,” or multiple digital marketing products bundled as an all-in-one solution.   

Well, our message was received positively and marketers saw the benefits; however, they often didn’t need or want to buy the “whole enchilada.” They just want to solve a specific problem at hand. We were ahead of the market, so our start was far slower than anticipated. 

After some trial and error, the product was realigned to reflect marketers’ current needs AND future needs. This realignment allowed many more firms to buy into the concept and purchase only what they needed at the time, with the knowledge they could add on additional capability as needed. 

The result for Knotice was rapid growth in 2008, 2009 and 2010.Our lesson learned was to really understand how your product will solve our customer’s problems today, as well as offer future benefits when needed.

Q: How does your organization make a significant impact on the community and regional economy?

Knotice has positively impacted the regional economy. Year after year, we’re adding employees to the workforce. We have grown from 12 employees in 2006 to 55 in late 2010. Our goal is to grow the company to over 100 total employees sometime in 2012. To date, we have found very talented people locally, plus we have brought in people from outside Ohio. Although talented, the skills and knowledge required at Knotice are not generally found in Northeast Ohio. Our employees often acquire new skill sets to add to their capabilities, further benefiting the region’s capabilities. In our growth, we have used the services of several local legal, accounting and professional services firms. We are committed to growth in Northeast Ohio.

Knotice and its individual employees support numerous organizations in the Northeast Ohio area. In terms of leadership, the three top executives are involved in a variety of community activities.

Brian Deagan, CEO, is a past board member at the Akron Job Center; he has been a Junior Achievement volunteer; serves on the advisory board at Work In Progress; has been a past president of the American Marketing Association Akron chapter; and has been an award winner in Crain’s 40 Under 40 as well as Akron Chamber’s 30 for the Future. 

Jon Grimm, president and CFO, is on the board of Northeast Ohio Software Association (NEOSA); is a trustee and the Treasurer at The Cleveland Museum of Natural History; is a member of the North Coast Angel Fund and a participating member of Akron’s ArchAngels network.

Bill Landers, CTO, has been a volunteer at several local non-profits.

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