We spend a lot of time in these pages discussing and dissecting the many challenges faced by companies in the local space breaking through to their downstream local and small business customers. Sometimes it is the gifts that make the difference in reaching a prospect or decision-maker.
We remember well a story told by ex-Localeze business development leaders. They figured out which colleges their key prospects had attended and sent them caps from their respective schools. That’s one way to break through the clutter of emails and text messages and social posts.
So we were reminded of Localeze’s creative approach when we read this week about a gifting company closing a $43 million Series B round. The company, Reachdesk, is certainly taking advantage of fewer in-person meetings and gatherings. Instead of personally flying to a meeting, business leaders can supplement their Zoom sessions with creative gifts. There’s no shortage of money in the arena – the business-to-business gifting market in the U.S. and the U.K. is sized at nearly $250 billion.
Over the last year, Reachdeck’s revenues grew some 600%. That is probably from a pretty low base. But 600% is still, 600%. Interestingly, HubSpot Ventures was one of the strategic backers in this B round. That should come as no surprise since Reachdesk integrates with a variety of CRM tools including HubSpot.
Reachdesk’s $43 million raise is another sign of gifting space’s recent momentum. Just a couple of weeks ago, for example, Sendoso collected a cool $100 million round. And before that Alyce, raised $30 million. Taken together these three have garnered some $175 million in the last 12 months to support the development of the market.
Our interest is to see if these companies can help those that are selling into the local, small business space which we would think is a more complicated problem to solve. But in our view, certainly worth solving.
We know time is a local businesses’ most precious asset. So sending them a branded bag of jerky or a water bottle can bring some name recognition. Then, when the SDR or AE lobs a call into a prospect company, if there’s a water bottle on the desk or a branded bag of jerky being munched on, that call just might get through to a decision-maker.
Reachdesk, a 2019 London-based start-up, came from the challenges the founders faced in gifting. They noticed that it wasn’t a very easy process to send a gift to a prospect or a customer and decided they’d do something about it. Perhaps its breakthrough was figuring out how to integrate with CRM platforms. This transformed sending a gift from a time-consuming process to something much closer to just hitting a button.
Reachdesk helps its customers by offering them three buckets of gifts to choose from. Group one is the company’s own swag. The second group two is a marketplace of more than 50 vendors of gifts. And the third is the lucrative and convenient gift card world.
Here’s what a partner at the lead VC had to say about the company. “The Reachdesk team truly understands the pain points faced by companies looking to break through to customers with effective marketing campaigns and has built a single solution that acutely addresses these, every team member is passionate about making corporate gifting work for everyone involved, and has a unique take on it, one that is set to capitalize on the potential in this space, and become a clear market leader.”
Opportunity to Shorten Sales Cycles
These gifting players have an opportunity to help all the companies pursuing hundreds of thousands of conversations each with small and local business prospects. If they do this cost-effectively by sending out water bottles, it’s easy to see a lot of growth. Even if the water bottle costs $30, this might be just a fraction of what it would cost for an account executive to make a week’s worth of cold calls.
We’d like to hear from Localogy members. Are any of you using Reachdesk or one of the other services for reaching decision-makers? Let us know what you’ve experienced.