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Vontoo finding its voice: Phone message marketer modeled on ExactTarget blends local, Indian talent

June 19, 2006

During his January trip to Bangalore, India, angel investor Robert Compton dreamed up dozens of ideas for high-tech business. To keep costs low, he planned to base each in Indiana, but outsource some work to the fastdeveloping nation's famously inexpensive software talent.

Now, only five months later, Compton is concentrating on just one: a startup IT company called Vontoo Inc. Based in Indianapolis, Vontoo will allow marketers to send audio messages to thousands of phones in a particular demographic, then track whether they're heard.

Much like Exact-Target, the fast-growing Indianapolis-based e-mail marketing firm, Vontoo will deliver messages only to people who want them. The antithesis of spam, the approach has allowed ExactTarget to swell to 200 employees and 5,000 customers in just five years.

Compton, a Harvard MBA and longtime venture capitalist, is ExactTarget's chairman.

"The potential for permission-based voice message marketing is as high or higher than e-mail marketing," Compton said. "It's Mount Everest, and we just need to climb it."

For 10 cents a call, Vontoo promises to send audio messages with all the emotion and nuance that e-mail inherently can't provide. What's more, using any phone, many versions of that message can be recorded for different intended recipients-an innovation that sets Vontoo apart from the low-tech blast dialers already available.

Marketers dream of reaching desirable target demographics, such as high school girls or soccer moms. With Vontoo's help, a different version of every message can be sent to each. Take, for example, a Colorado ski resort that would like to instantly update downhill enthusiasts about the day's snow conditions. With Vontoo, it could tailor its pitch differently for beginning, intermediate and expert skiers.

One of Vontoo's first customers is the Indiana Republican Party. The software allows Republican Chairman Murray Clark to instantly broadcast his personal thankyou message to every volunteer in a grassroots campaign. A call from Clark to 10,000 people has been Vontoo's largest so far.

Another early customer is Justine magazine, a Memphis-based publication aimed at teen-age girls. With Vontoo's help, Justine can send its readers voice messages from the celebrities it interviews, tailoring the list of recipients based on their volunteered interests. Vontoo is talking to Justine about variations that would let the magazine send its readers makeup tips or the "SAT word of the day."

Advertising content can be added to any of the audio messages. And at the end of the process, Vontoo delivers reports showing who heard them, when they were received, and how long the recipients spent listening.

"As an advertiser, you know whether your ad is getting to who you want. That's useful information," Compton said. "And since this is permission-based, you can opt in or opt out at any time and never receive another call."

Compton, Vontoo's sole investor so far, has risked "mid-six figures" to capitalize the company. He's shared ownership with several of Vontoo's key employees, including Dustin Sapp, a co-founder who serves as chief technology officer. With the help of a three-member team in Bangalore, Vontoo's 10 Indiana employees are tinkering with their system, adding new features every day.

Vontoo's hybrid Indian business model allows it to decrease some development costs, Compton said, although he didn't specify how much money Vontoo will save using its Indian team.

Local employees created Vontoo's core software and are constantly upgrading it with new features. Meanwhile, Indians are busy integrating the system with other companies' software. This allows partners to offer Vontoo's voice messaging service under their own brands.

In many ways, Vontoo is a mirror image of ExactTarget-and not just because of its business plan. When it was founded in December 2000, ExactTarget had just three employees. Its CEO, Scott Dorsey, remembers landing the local restaurants, sporting goods stores and dry cleaners that served as ExactTarget's early customers and became its first references. Those efforts led to today's marquee clients, such as recent wins Charles Schwab and Pier One Imports.

"It's all about permission. I think we've proven permission-based communications are powerful. They're the future of marketing," said Dorsey, who is not involved in Vontoo. "It's very intriguing to wonder whether that permission can be extended to the phone."

While Vontoo has barely started down the path, it already has a handful of testimonials from satisfied clients. Tom Polak, director of the local food and clothing pantry the Metropolitan Baptist Center, is one.

He recently used Vontoo's system to communicate with 4,500 people about a block party and basketball camp sponsored by the center. The response was much better than he previously saw using postcards.

"It was a great way for us to communicate our event. It was a little more personal touch I thought this year than in past years," Polak said. "I'm really not a big computer person. I can get my e-mail, do this and that. But the system itself was really easy to use for a novice."

Despite its promise, Vontoo can't assume success is inevitable. Bern Elliot, a research vice president for Stamford, Conn.-based technology analysis firm Gartner Inc., said a number of players have attempted to explore the potential of targeted voice messaging before, particularly in the early 1990s.

As the Internet took off, most interest in the area gravitated to the Web because of its much lower expense than telephones. To earn success, Elliot said, Vontoo will have to show why its voice messages have more value than the cheaper ones delivered by email.

"I think they, like the other companies that have looked at this in the past, will have to balance what people do on the phone with what they do on the Internet," Elliot said. "I'm not saying the potential isn't there. But they're going to have to work on their marketing and delivery."
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