Marketing automation is the foundation of a productive and scalable virtual customer factory. In this article I answer a handful of frequently asked questions about this new technology stack.
On the whole, small-medium businesses owners all appear to be aware of the importance of digital marketing. The majority of them are using one or more channels and they report that 3 of their top 5 most effective lead generation channels are “digital”.
It’s no surprise then that the adoption of marketing automation of these channels is growing at an astonishing rate.
“On average 49% of companies are currently using marketing automation. With more than half of B2B companies (55%) adopting the technology. – Emailmonday “The Ultimate Marketing Automation stats 2016”.
This means your competitors are likely using, or considering using, marketing automation.
In competitive markets first-mover advantage is critical to gaining or maintaining your competitive advantage.
In less competitive markets following the herd may be fine. But the problem with following the herd is that you wind up stepping in the “stuff” that got left behind.
What is marketing automation?
Marketing automation refers to the tools and tactics used to optimize and automate marketing actions that are often quite repetitive such as emails, social media and other website actions. The tools and technology that automate these functions make performing these tasks easier, more measurable and scalable.
Marketing automation can allow you to nurture your leads through the entire buying process, delivering targeted personalized messages that address their concerns and needs.
In other words, effective marketing automation takes into account the changing needs of your customers, their behaviours and their interactions with you across all your marketing channels. This gives you the context you need to better understand a customer or prospect’s challenges and how to guide them down the funnel.
A simple example of marketing automation could look like this:
- You send an email invitation to a targeted list of people to download a document that contains information about a solution to a problem.
- You send a thank you email to all the people that downloaded that document.
- A few days later, you follow up with those who downloaded the document and offer them more information related to the same topic.
- When someone downloads the additional information, the contact is flagged as a qualified lead for your sales team so that they can follow up with them.
– Credit: Ultimate Guide to Marketing Automation
What are the benefits of marketing automation?
The two main benefits of marketing automation for small-medium businesses are:
Marketing automation will relieve you from manual, repetitive tasks associated with lead generation, scoring, nurturing, and management. That means that you can get more done with the same staff and resources.
It enables you to set up scalable systems (that run largely on autopilot) to generate new business, and to nurture your relationships with existing customers.
“Marketing automation frees up time and resources you can then spend elsewhere.”
Businesses that have adopted marketing automation say the main benefits are:
- Saving time (74%)
- Increased customer engagement (68%)
- More timely communications (58%)
- Increased opportunities, including up-selling (58%)
- Taking repetitive tasks out of marketers hands, allowing focus on new/more exciting projects (36%)
- Better targeting of customers and prospects (30%)
- Improving the customer experience (10%)
- Better email marketing (9%)
- Reduction of human error in campaigns (8%),
- Lead management (4%) and multichannel marketing (3%)
Source: Redeye and TFM&A Insights “The Marketing Automation Report 2014” (2014) & Adestra Marketer vs Machine (2015)
What are the strategic goals of implementing marketing automation?
The most important strategic goals of implementing marketing automation are:
- Increasing lead generation (61%)
- Improving lead nurturing (57%)
- Increasing sales revenue (47%)
- Improving customer engagement (36%),
- Improving marketing productivity (29%)
- Improve measurability (28%)
- Campaign targeting (22%)
Source: Ascend2 “Marketing Automation Trends Survey” (2016)
Here are a few more C-Level reasons for implementing marketing automation:
You’ll be able to pinpoint and prime the revenue engine your business needs most at any specific point in time. You can focus on getting new customers, selling more to your existing customers, or just nurturing the relationships with your existing customers. And you can shift your focus in an instant.
Instead of using fluffy measurements, you’ll be able to consistently and measurably move prospects from the top of your sales funnel to a closed deal.
You’ll receive reports that will demonstrate your success metrics, so you’ll see how marketing is directly contributing to pipeline and revenue. Reporting can also track the engagement of prospects through the funnel, and help optimize program spend to drive the highest value.
“In God we trust. All others bring data.” – W. Edwards Deming
Instead of basing your plans on intuition, you’ll have the data you need in order to make informed decisions about this year’s marketing programs. By tying your campaigns and programs more closely and effectively to the buyer’s journey, you can focus your marketing budget where you’re likely to reap the biggest financial gains.
How long does it take to see results and recoup my investment?
It is important to understand that marketing automation is not a silver bullet or a quick fix.
Having said that, nearly two thirds of companies surveyed (63%) expect to realize the benefits of their marketing automation system within six months of implementation. (Ascend2 “Marketing Automation Trends Survey” (2016).)
What are the software stack options?
As little as 3 years ago you basically only had 5 options. Today, there are more than 200 off-the-shelve marketing automation options.
The challenges for small-medium business when using off-the-shelve options are two-fold:
First, is that they are one-size-fits-all solutions. This means that any given solution either does not have everything you’re looking for, or you have to pay for features you never intend using.
The second challenge is that because they were originally built for big businesses they are expensive. Especially if you are just starting out and getting your feet wet. The better ones all have an on-boarding fee that range between R 25 500 and R 45 000 for a mid-sized small business. And the service fees range between R 67 000 and R 360 000 per year.
A more popular option which has only recently become available thanks to new technology is to weave together your own home-grown solution tailored to your needs. Only paying for the features you need reduces the cost and learning curve considerably.
On-boarding and services fees for home-grown solution have a wide range. If saving time is not the issue it’s possible to weave together a solution using only free versions of the software you require. Looking at paid versions, you can start for as little as R200 per month. The average is around R1 500 per month for a solution with all the bells and whistles.
Proponents of off-the-shelve solutions like to point out that the downside of home-grown solutions is that you need an expert to show you how to weave the components together. That’s true. Thing is, such an expert will only cost you a fraction of the compulsory on-boarding fees of off-the–shelve solutions.
What are the hidden costs?
Irrespective of the technology option you select, you’ll have once-off set up fees, and you’ll have monthly recurring service fees. As explained above, these have a wide range.
A hidden cost is that you’ll also have to manage the software and your marketing campaigns. When choosing an off-the-shelve solution you’ll need someone on your payroll. Meaning you’ll either have to dedicate and train an existing employee, or you’ll have to get a new hire.
When choosing a home-grown solution you can easily do-it-yourself or use a part timer or freelancer. Companies like Game Plan Geek will manage your customer factory for you.
“The majority of users think Marketing Automation is worth the price. 10% finds it inexpensive, 47% fairly priced, 22% pricey but worth it and 11% too expensive. 10% was not sure. – VB Insight “Marketing Automation, how to make the right buying decision” (2015)”
Here’s an article that explains how to justify the price tag of a new marketing automation system.
What are the barriers to success?
The most significant barriers to marketing automation success are:
- Lack of an effective strategy (52%)
- Complexity of the system (42%)
- Inadequate contact data quality (38%)
- Lack of employee skills (32%)
- Lack of relevant content (31%)
- Marketing and sales alignment (30%)
- Budget constraints (27%)
Source: Ascend2 “Marketing Automation Trends Survey” (2016)
Game Plan Geek’s executive level coaching program is specifically designed to help you remove these barriers.
Can you give me some examples of the results I can expect?
When it comes to making any significant purchase, it needs to make business sense. You and your partners need to see a business case with a return-on-investment that demonstrates a minimum rate of return.
Marketing automation is an investment that can do just that—and much more:
- Companies that excel at lead nurturing generate 50% more sales-ready leads at 33% lower cost.
- Systemized lead generation and management practices drive a 9.3% higher sales quota achievement rate.
- Companies that get lead scoring right have a 192% higher average lead qualification rate.
- Companies using marketing automation generate twice as many leads as those using just email software.
- Relevant emails sent with marketing automation software drive 18 times more revenue than batch-and-blast emails.
- One dollar invested in email marketing will on average give a return of 38 dollars.
- Companies that automate lead management see a 10% or greater increase in revenue in 6-9 months.
- Businesses that use marketing automation to nurture prospects experience a 451% increase in qualified leads.
Bottom line: When done correctly we have yet to come across a case where marketing automation did not result in both an increase in revenue, and a decrease in customer acquisition costs.