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Marketing automation software was born out of a marketer’s need to more effectively generate and nurture leads through the funnel. Today, it is seen as a cornerstone of modern data-driven marketing practices.
If marketing automation is a ‘needle mover’, then why the continued furor over its ROI?
Act-On Software commissioned its inaugural study on the State of B2B Marketing Automation to determine the link between marketing automation investment and business performance. The findings tell a very different story from what we commonly believe though the study found that companies that were active MA users are more likely to outperform their peers.
Reality
53 percent of companies surveyed had implemented marketing automation. 37 percent were planning to and ten percent had no such plans. Of those planning to implement, 87 percent said their timeframe was within the next six to twelve months.
The lack of adoption is puzzling since 82 percent of study respondents agreed that marketing automation can make them more efficient , delivers a ROI and can increase marketing’s contribution to pipeline.
The catalyst of adoption is a need for higher quality lead generation. While every marketer worries about leads, marketing’s worth is measured on the revenue it generates. While generating leads that convert is at the top of the list, it isn’t the only reason to adopt MA:
- Align sales and marketing (44%)
- Automate customer onboarding and retention (36%)
- Measure marketing’s impact on the company’s bottom line (31%)
- Understand the digital behavior of buyers and customers (30%)
Despite this compelling list of reasons, a surprising finding was the low usage of MA features. Of the fifteen most commonly found features, the top four most used features are: Email, web forms, landing pages and CRM integration. The majority of features, nine of them, are used by 33 percent or fewer companies:
- A/B testing
- Dynamic content
- Social integration
- APIs
- Dynamic segmentation
- Progressive profiling
- Lead recycling
- Account based marketing
- Business intelligence integration
Even more surprising is that over 20 percent of companies have no plans to use the last seven features. Not only does lack of adoption directly imped these marketers in achieving their business goals, it prevents them from capturing the data needed for a true 360 degree view of the customer.
What is holding these companies back? The study found for many companies it’s aligning “marketing automation activities across the business, and to demonstrate the impact these activities have”. Having to prove in hard numbers the ROI and efficiency gains is a challenge that slows adoption.
Are you a Leader or Laggard?
Leaders are defined as “those whose marketing functions exceeded their top 2016 business goal” and comprised 34 percent of study respondents. Mainstream are companies that did not exceed but met their business goals. Laggards, by my definition, are those that missed their business goals.
One area that differentiates Leaders is what keeps them up at night. Lead generation keeps everyone up but for mainsteam and laggard companies it was also building brand awareness. Leaders are 55 percent more likely to be worried about lead handoff from marketing to sales and retention of customer/install base than top-of-funnel lead generation . Equally, leaders are more likely to have achieved sales and marketing alignment.
Leaders leverage MA technology to better understand the digital behavior patterns of customers and buyers. By capturing where, when and to what customers respond to, marketers are better able to serve up the right content and offers, at the right time, to the right persona through the right channel and in the most effective format. It all comes down to data. While MA will not provide a 360 degree view of the customer, the data it captures combined with the data from other solutions in the MarTech stack can provide the near real-time insights needed to continuously fine-tune how marketing and sales deliver value-add to customers and buyers.
Interestingly, leaders use more of their MA solution’s features. 48 percent of leaders, compared to 29 percent of mainstream, use social functionality. Another is lead nurturing and lead scoring where there is a 23 percent gap in adoption between leaders and the rest of the study respondents.
The gap between leaders and mainstream/laggards becomes wider when the study evaluated what metrics they use to measure marketing’s performance. While a majority of respondents measure new contacts and traffic to landing pages/forms the similarity ends there. Leaders, on average, measure these additional metrics:
- Marketing qualified leads (69% vs. 49%)
- Sales qualified leads (64% vs. 43%)
- Sales accepted leads (61% vs. 39%)
- Sales generated leads (56% vs. 43%)
- Marketing-generated opportunities (55% vs. 40%)
- Marketing contribution to pipeline (unweighted) (51% vs. 24%)
- Marketing contribution to revenue (49% vs. 26%)
- Marketing contribution to pipeline (weighted) (38% vs. 20%)
Close the Gap
To be successful a strategy and plan is needed. Prioritize the MA features to be implemented based on where the initial low hanging fruit is. In other words, go slow. Start with small changes that show success and progressively tackle more sophisticated workflows. But you need to have a plan first and to partner with someone that specializes in change management.
Second, based on your plan define the current marketing workflows as well as the new ones. Define the roles, hand-offs, data and sources, and new activities. Starting with the initial set of low hanging fruit workflows/activities will give you a very in-depth understanding of the degree of change –people, process, data and technology – needed for measurable success.
Third, socialize, socialize, and socialize. Implementing new technology/processes that touches many parts of an organization is always more successful when the people affected have a voice in the process, are adequately trained, and regularly kept abreast of progress. I’ve seen implementations fail because technology was implemented in isolation and the lack of grass-roots support sabotaged a well-meaning effort.
Fourth, get clear on the type of MA solution that is right for you. I see a tendency in companies to either want to buy a Cadillac when what they need is a Prius or buy a stripped down Corolla when they need a F150 pick up. No offense Toyota. Every business is different just as are customer’ journeys and lifetime experience expectations. Before jumping into demos, invest the time to develop a solid set of requirements – business, technical and functional. Go back to your plan and your redefined workflows and use them to define the requirements.
Lastly, have a heart-to-heart with your senior leadership and finance. Ensure that funding is available for future years to provide the necessary resources to grow into your MA solution. It took companies in the study three month to a year or more to get to measurable ROI. Too often, the focus is on the initial cost of the solution and the renewal terms – overlooking the need for additional training, resources, etc.
