17th Aug 2011
Is marketing automation the white knight to help marketers with sales alignment, digital methods and accountability? Or a flawed first attempt at replicating the old sales process with marketing methods? Peter Johnston explores.
Every sizeable company these days has seen the powerful impact of technologies such as computer aided design(CAD), enterprise resource planning (ERP), customer relationship management (CRM) and business intelligence (BI) with major business improvements. Originally standalone or departmental solutions, these now form company-wide software infrastructures integrating every department into a single, technology managed business. Data from them allows managers to make better informed decisions for the future of the business, reduce waste and allocate resources more efficiently.
Interestingly, marketing was considered exempt, so marketers were spared this business transformation, forensic examination of what it was doing and the glare of the spotlight on results. Only a few years ago, marketing was about advertising, sales promotion and direct marketing, with the website seen as a big brochure. Nothing produced truly measurable results.
In the past five years, marketing has moved from a creative art to a data driven, measurable discipline - short-term focused, results-driven and targeted with producing leads for the salesforce. Half of all marketers are now responsible for revenue metrics according to a recent DemandGen survey.
This has created panic in the minds of many marketers as they struggle with sales alignment, digital methods and accountability.
To the rescue, vendors would have you believe, is marketing automation.
One puts it thus... "We automate the science of marketing - campaign execution, testing, measurement, prospect profiling, and lead nurturing – allowing marketers to acquire customers, drive revenue and do what they do best: develop strong brands, build creative campaigns, and deliver compelling content".
Let’s examine how it works...
Under the hood of marketing automation
Marketing automation falls into three key sections:
- 'Clever' email marketing. Complete automated campaigns can be set up in advance, triggered by an event. For example, downloading a white paper will trigger several subsequent messages, with different content according to which links were clicked. This allows potential customers to be followed up automatically without any personal intervention and tailors campaigns to the recipient.
- Lead nurturing. A modern version of the old sales 'keep in touch' system (which everyone started but no-one kept up), it aims to deliver information in stages to aid potential buyers through their decision-making process and 'nurture' them towards a sale.
- Lead scoring. This automated process scores respondents according to their responses (the cleverer programs also score by company demographics), aiming to qualify prospects for sales force involvement. Analytics are generated showing volumes at various stages aiming to predict the likely volume of sales in a given time period.
Vendor claims of 1,000% and more uplift in sales leads have persuaded many marketers - enough indeed for the industry to have doubled in size each year for the past three , with 2011 turnover predicted to reach $325m (£150m), according to Raab Associates.
That is small beer, however, set against $9.1billion for CRM in 2008 (Gartner's estimate).
Let’s look behind the scenes...
A new marketing age
Marketing automation is not new. Some providers hail from the end of the 90s, when websites were brochureware, clouds were in the sky, broadband and email marketing were big new concepts and social media hadn’t been invented yet. Push messages were best practice and interaction with customers was the job of sales staff. Sales and marketing were separate departments and working together was minimal.
Marketing automation enshrined these concepts with email as its key technology, sequential push marketing as its methodology and 'Marketing makes leads for sales' as its philosophy.
Just as marketing automation was coming of age, social media changed the way we used the internet and ushered in a new marketing age.
Here are four key changes:
- Buyers no longer look to vendors to provide them with information. Advertising, push messages and interruption sales methods such as telephoning have lost their impact. Inbound methods – being found on search, putting out engaging content and being talked about on social media – are emerging strongly as marketing’s future.
- Sales calls and visits are no longer at the beginning of the buying process. Instead, buyers use readily available internet sources and social media to discuss ideas with other similar companies, independent sources and a variety of vendors and advisors. They share information internally and make most of the buying decision themselves from online research before calling in vendors or permitting sales calls.
- Social media transformed the way buyers use the internet. Buyers seek to engage with vendors interactively, clarifying, sharing ideas and asking questions rather than simply being an audience for sales and marketing messages. Engagement begins online and builds seamlessly towards working together - buyers no longer accept being handed like a baton from one vendor team to another.
- Vendors are no longer in control of timing or process. People look at vendor information after putting the kids to bed, over breakfast or on the train. If information is poor or difficult to access (for example, insisting they fill out a form), another vendor is just a click away. Marketing must thus be 'always on', rather than working in campaigns.
These changes have left marketing automation wrong-footed. Not as the only way to apply technology to marketing as its proponents would have you believe, but as an early, flawed, first attempt at replicating the old sales process with marketing methods.
What is becoming known as Technology Aided Prospecting (TAP) is helping marketers and sales people work together and evaluate a much wider range of ideas. IBM has had strong success with its 'Listening for Leads' programme, where key sales people blog and post on social media and listen for potential customers in the early stages of buying.
Companies like Shell and Sage are finding that technologies which tell you who is on your website, track them back to company level and then identify the key decision-makers are far better than simply relying on web forms and cookies. Content marketing is also evolving from sequential spam into true interactive engagement.
Companies generally are finding:
- Salespeople involved from the beginning in the role of 'trusted guide' produce far better results than 'Marketing makes Leads for Sales'.
- Building engagement interactively online is more effective than sending a series of marketing push messages or scoring leads to decide whether they merit salesforce involvement.
- Multi-threaded work to inform and engage the multiple decision-makers involved in most complex sales is much more effective than simply responding to and nurturing the person who contacted you.
In any new field, there are early experiments. Often these are hampered by applying old fashioned thinking to not yet fully understood new processes. In time we will see marketing automation as one of these early experiments: either a blind alley - or a first step on the path to effective Technology Aided Prospecting.
Peter Johnston runs Marketing Pipeline, a sales and marketing consultancy specialising in helping companies move to modern methods and set up effective business generation pipelines. Marketing Pipeline’s Intelligent Technology division is also the UK distributor for LeadFormix, ProspectVision and several other sales and marketing software products.