Contentsquare acquires Hotjar to expand reach from enterprise to SMB | ZDNet

Digital experience analytics provider Contentsquare announced this week that it is acquiring Hotjar. Contentsquare provides a platform to help companies improve their customers’ digital experiences across the web, mobile, and applications by analyzing users’ digital interactions. The company has significant momentum in large enterprises and counts big brands such as Walmart, Microsoft, T-Mobile, BMW, Sephora, and Accor as customers. Contentsquare claims that about 30% of the Fortune 100 use its cloud service to improve customer experiences.

Hotjar has a similar offering to Contentsquare but focuses on the needs of small and midsize businesses. The combination of the two will create the first digital experience analytics company that serves the needs of companies of all sizes. This should serve customers of both companies well, because Contentsquare will have insights from nearly 1 million websites in more than 180 countries through the analysis of trillions of digital transactions. Contentsquare uses AI to convert its data into actionable recommendations, so the larger data set will prove useful to companies of all sizes. 

The two companies also have different go-to-market models that they will use to attract a broader audience. As is typical with enterprise sales, Contentsquare has a top-down model led by seasoned salespeople and customer success managers. Hotjar, as is typical with companies that sell to small businesses, uses a freemium model to attract customers and then hopes to convert them to paid customers as they become comfortable with the product. 

While those models generally hold true for those audiences, there are exceptions, but Contentsquare now is able to adapt its sales model to any type of customer. For example, some SMBs are highly advanced and need the Contentsquare direct touch that isn’t offered by Hotjar. Similarly, there are enterprises that would prefer to “try before they buy,” so the freemium model would appeal to them. Both companies will remain independent for the time being.

Complementary buyers will benefit from the acquisition

Another interesting aspect of the acquisition is that the primary buyer of Contentsquare’s service is different but complementary to Hotjar. Contentsquare has a sophisticated platform that it sells to the chief marketing officer, digital marketeer, UX, design teams, or the head of sales. The product is used to refine broad digital initiatives. Conversely, Hotjar is targeted at product managers within departments or SMBs. The information from Hotjar is used by this audience to improve specific features or products, both quantitative (like Contentsquare) but also qualitative (with surveys and polling features), instead of looking at the companywide impact.

The combination of the two has some interesting implications in a world where digital experiences are the basis for competitive advantage. The pandemic forced all companies to think digital-first, because many customers were unable to transact business in a store. Even the simple act of buying a coffee required logging into a mobile app and placing an order. 

The better and easier the experience, the more likely a company can retain a customer for future transactions. A bad experience will likely cause the customer to look to a competitor. Contentsquare and Hotjar create an end-to-end view of digital experiences where new products and features are built according to the needs of the product team but also through the lens of the CMO or head of sales. This could create some interesting insights to help organizations prioritize initiatives. 

Contentsquare continues its shopping spree

This is the sixth acquisition for Contentsquare in the past two years. In the past 24 months, it has added to its platform with the addition of PricingAssistant (e-merchandising), Clicktale (market consolidation), Dareboost (performance monitoring), Adapt My Web (digital accessibility), and Upstride (deep learning). 

Additionally, the company recently closed its Series E round of funding, where it raised $500 million.  The company has extremely aggressive growth plans, which makes sense; the digital experience industry is exploding, given businesses’ need to be digital-first.

While Hotjar adds a lot to Contentsquare’s capabilities, I certainly don’t expect this to be the company’s last acquisition; this is good because this market needs to shift from best-of-breed to best-of-suite to make deployments easier.

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