Tailwinds for Marketing Automation

by

CRM Analyst,

Marketing automation is arguably the hottest segment of the CRM industry. While it was a relatively quiet niche several years ago, marketers are now adopting these systems aggressively. Vendors such as Genius, Eloqua, Marketo, and Pardot are reaping the benefits and growing fast. The marketing automation industry clearly has a steady tailwind at its back.
[CTA] These tailwinds are actually someone else’s headwinds. The increasingly challenging B2B sales environment is forcing companies to explore new ways to market and sell their products. We’ve experienced these challenges first-hand through our phone calls with thousands of business software buyers. A confluence of trends is changing the way business buyers purchase, making marketing automation software essential.

Let us outline the macro trends that we see pushing buyers towards adoption of marketing automation.

Buyers want content of real value.
Traditional pamphlets and brochures filled with marketing jargon just don’t cut it anymore. Buyers are looking for informative and interesting content that provides actual value and education. They expect vendors to provide them the content they need throughout the sales cycle. Increasingly, the first two-thirds of that cycle is spent researching the market and vendors, without regular contact with a sales rep. To remain top of mind with the buyer and claim the “thought leadership” position, marketers are deploying marketing automation to provide a steady stream of educational content for buyers.

Buyers are increasingly wary of the phone.
One of the biggest issues sales professionals face when engaging with prospective buyers is a declining level of sales engagement. This is often because the buyer is just getting started on research, overwhelmed with competing priorities and not ready for a sales pitch. Also, when the economy is poor and money is tight, consumers become much more skeptical of sales people making big promises. Compound that with a macro trend away from the phone and toward email and the web. As a result, sales and marketing teams are facing the challenge of selling to buyers who won’t talk to their sales team. Delivering the right content over time is a great way to “warm up” buyers until they are ready to talk to sales.

Desire for marketing accountability.
Marketing has traditionally been somewhat of a “black box” expense for businesses. While development could be measured on release cycles and product quality, and sales was measured on performance against plan, It’s tough to track marketing’s ROI on positioning, collateral and brand building. B2B marketers have traditionally gotten off easy in terms of strict accountability, but were often the first budget to get cut and were sometimes looked down upon by more accountable departments. Marketing automation empowers marketing to define its contribution to the sales pipeline, tracking each sale back to one or more marketing campaigns.

Sales cycles are longer in a down economy.
Under adverse economic conditions, buyers are less inclined to purchase – plain and simple. Even when there is a clear business challenge and a solution with real ROI, tight budgets create hesitation on the part of the buyer. Therefore, sales professionals are faced with increasingly risk-averse prospects whose buying time frames are longer. Marketing automation tools supporting drip marketing campaigns and lead nurturing can build relationships with buyers during a longer sales process.

B2B sales processes are becoming “consumerized.“
According to Peter Sondergaard, SVP at Gartner, consumerization is a significant trend that will affect enterprise IT purchasing this decade and beyond. What does that mean? Business buyers are demanding that their enterprise purchase process be simplified to match the consumer purchases they make in their private lives. They demand coherent pitches, simplified pricing, rapid implementation and ease of use. Moreover, they don’t want to have to interact with sales every time they want information. Marketing automation plays a critical role in supporting self-service sales interactions.

Marketing channels have changed and grown.
The Internet has vastly changed the way we communicate. It has also changed the way companies market. There are more channels to reach customers – email, microsites, social networks – and businesses must develop more cohesive marketing plans. Marketing automation allows companies to ensure a coherent, unified marketing approach by tracking these various marketing channels in one system.

SaaS systems are greasing the skids.
Given the number of relatively new entrants into the marketing automation market, almost all of these systems are built on a modern, software as a service (SaaS) architecture. This has reduced friction for early adopters. Buyers have been able to get up to speed and start demonstrating value far more quickly than early adopters of sales force automation (SFA) and call center software in the 1990s. Moreover, subscription pricing has enabled marketers to add a digestible monthly or quarterly line item into their budgets, rather than seek approval for a costly capital expenditure for on-premise software.

It will be interesting to watch the development of this CRM application over the next couple years as companies learn to adjust to and embrace the new realities of B2B sales. For professionals currently implementing a marketing automation solution, Bob Scheier is hosting a survey on his blog to gain some insight on what challenges you might meet up with in implementation. Check it out here. Also, Dan McDade, prospect development expert and PointClear founder and CEO, recently published his book on how to focus B2B lead-generation efforts, align sales and marketing and drive revenue. It is hot off the press and definitely worth a look.

Think we have left any trends out, or wish to share comments of your own? Feel free to leave feedback below.

 
  • Scott Bauman

    Lauren, nice write-up. I agree the space is heating up, which makes me think it also makes sense for you to get Aprimo on your radar as well. I’ve started doing work with them, and I’d be happy to set something up it you’d like. They’d certainly have something to add. Please drop me a line or connect through Twitter to get the ball rolling:
    @sbauman.

    Look forward to speaking.

    Scott

  • http://www.dontaskdontsell.com victor kippes

    Nice post and very true. Especially the desire for marketing accountability.

  • http://www.baseonegroup.co.uk/beyond John Bottom

    Lauren – terrific summary. I use most of these points already when talking to clients because I agree wholeheartedly that automated email has a central role to play in today’s B2B sales/marketing process.

    There is a big caveat though, and that is to keep one’s expectations realistic. It is easy to define automation as “a machine that does your job for you”. Clearly, it is not, and relying on a system like this, however sophisticated it may be, is asking for trouble.

    As all responsible marketers will know, the modern buyer seeks engagement in a way that fits in with their own specific requirements. The brand that does it best will win their business. And while part of that can be addressed by email automation, personal engagement is still critical.

    In addition, over-reliance on automated, outbound email can be dangerous because buyers do not always like to be force-fed. As they become more sophisticated, they know where to go to find information on their own terms – hence the importance of inbound marketing, content marketing, PPC, SEO and so on.

    You make some excellent points Lauren – I’d simply add that it is only part of the ‘new marketing mix’.

  • http://pauldunay.com Paul Dunay

    2 things that I have been thinking about recently when it comes to the Marketing Automation space are

    1) How are we effectively going to wire in and capture social efforts into a marketing automation platform – this would require integration with a firm like Radian6 so all social activity can live on the same platform

    2) Another vendor that I think could OWN the marketing automation space is SalesForce.com – while we all know and love them as our SFA/CRM for the sales team – their footprint could expand into the Marketing Automation space and tie nicely with the SFA platform

    Great post Lauren!

  • Kate

    Great article. I use one of the marketing automation platforms that you mentioned, and one of the main advantages in doing so is lead scoring. We measure the activity of every potential lead (both offline and online) and score it. Once a certain score is reached we pass them on to sales, ensuring the lead is qualified and highly relevant for sales to engage. This lead generation increases our value as lead generators and allows measurable ROI as you mentioned. May I add that the process of implementing these platforms requires a lot of preparation, process development and alignment between functions within the company.

  • http://syncforce.com/en/Home.aspx Hans van den Berg

    great article! Regarding channels: cross channel or cross media consistency is indeed a big challenge. However in a B2B environment the brand owner has still a lot of grip on their own marketing activities. When we move into the B2B2B or B2B2C arena brandgagement is more critical as there is a channel that starts promoting the products and services of the brand owner. With a dispersed stakeholder group who create their own brand touchpoints a marketing automation platform can help with distributing marketing materials to these partners in order for them to have better marketing tools at the right time. On top it will give the brand owner a faster time to market in a cost effective manner.

  • http://www.scheierassociates.com Bob Scheier

    Agree with all the factors, and would add the loss of the traditional trade press which used to provide (or try to provide) impartial thought leadership. To me, this provides an opportunity for smart marketers to “hook” prospects with valuable content, tracking their readership of it to determine when they’re moved past consideration to a decision and only then hitting them with a sales call.

    I’d also raise a terminology question. Lauren, you mention marketing automation as a subset of CRM, whereas most MA vendors refer to their products as “linking” to CRM systems such as Salesforce.com. Beyond semantics, I don’t think most CRM systems have the content management, analytics, SEO and other content analytics capabilities MA systems have.

    But a good post about a growing field. Thanks…

  • http://www.HubSpot.com Mike Volpe – HubSpot

    I think you have the change that is happening in marketing about right, but the conclusion that this helps marketing automation misses the mark I think.

    Yes, the buyer is now in control. Old methods of outbound marketing where you advertise and interrupt people with cold calls and print ads are becoming less and less effective. Buyers have great ways of blocking those channels out. Today marketers need to use inbound marketing techniques to attract buyers and gain permission to interact with them through blogging, social media and SEO. Agreed!

    But… does “marketing automation” solve this problem? I don’t think so.

    The issue I always have with marketing automation systems (as a marketer with 10+ years of experience) is that marketing automation does not attract new leads and contacts to my company. Marketing automation does not help me gain permission to interact with new people. Marketing automation does not attract people to my content or attract new followers to my social media profiles. to me, marketing automation does not solve the problem/trends you highlight in this article.

    Marketing automation is a great technology to help marketers slice and dice my existing database and get more out of what I have already attracted. But the reality is that my existing database contact info expires at 20-30% per year, so unless I am using inbound marketing to attract more buyers to me and gaining permission to interact with more buyers every day, then I am losing ground every day.

    Certainly, all of these marketing automation companies (Eloqua, Marketo, Pardot, Silverpop, Manticore, Aprimo, Loopfuse, Oracle/Market2Lead, Genius, Marketbright and probably 10 others I am forgetting) have good products and increasing sales, which is great for the marketing software industry as a whole. But what is interesting to me is that if you add up all of the paying customers of all of these companies I think you end up with far fewer customers (maybe 1,500 to 2,000) than the customers who are doing inbound marketing using HubSpot (3,400 paying customers).

    I guess my point is that you have done a great job of putting your finger on the pulse of the trends in marketing! But I think the vendors that will really benefit from this trend in the long term are not the marketing automation players.

  • http://www.thebuyerexperience.com Tony Zambito

    Lauren,

    The macro trends you have outlined certainly have had a tailwind behind them the last few years. The macro trends you outlined are radically changing buyer experiences. One common view of marketing automation is that it is an engine for content. The big IF in the equation is the relevancy of the content – making your first macor trend point the most essential in my opinion. Before making a sizeable investment in marketing automation, companies should invest first in understanding their buyer personas and in formulating a strategy for designing buyer experiences. Superb post Lauren!

  • http://marketing-automation-site.com Paul Gardner

    Intelligent marketers are providing their prospects with valuable quality content and tracking their interest with marketing automation software to get stronger consideration of their products and services to generate the sale. and only then hitting them with a sales call.

    You have a good presentation on marketing on marketing automation software and all of your key points of information are very informative.

  • http://www.genius.com Scott Mersy

    @mike – You’re right – most marketing automation vendors don’t help you attract new leads and contacts. Some do. I wrote a blog post about this relatively recently. http://gurl.genius.com/bde0g4

  • http://www.alinean.com Tom Pisello

    Lauren,

    I completely agree with your synopsis on marketing challenges and marketing automation tools to help overcome these challenges.

    In my blog post: “The End of Marketing as We Know It”, the past decade of marketing was all about the exploitation of new channels to reach prospects. However, because of the leverage of these channels, marketers now face buyers:
    1)overloaded with more information than ever, making it harder to connect and engage
    2)taking charge of the purchase cycle, fueled by the Internet and more information than ever,
    3)more frugal than ever as a result of successive downturns

    Content marketing and the ability to match content to buyer needs, stage and role in buying cycle is more important than ever to cut through the noise, engage buyers with the right decision support content at the right time, and help buyers quantify the value and ROI of proposed solutions.

    My blog article can be found at:
    http://tompiselloroiguy.blogspot.com/2010/09/defining-decade-for-marketing.html

  • http://digitalbodylanguage.blogspot.com Steven Woods

    Lauren,
    great post and summary of the trends. Indeed buyers are changing fundamentally now they have access to the information assets of the Internet.

    Interesting discussion that has ensued, and in many ways I agree with Mike and also with the folks on the marketing automation side of the house. The need for both “inbound” marketing to assist buyers in finding you, and for marketing automation to engage with those who have already found you, is crucial in driving revenue. Tying both of these efforts to sales completes the picture.

    This comprehensive view of the buying funnel is something we’re calling Revenue Performance Management (RPM) – see more here http://www.eloqua.com/revenue-performance-management/ – and it takes both of those perspectives into account.

    Congratulations on starting a very spirited discussion Lauren.

  • http://www.mclellanmarketing.com Drew McLellan

    Interesting article Lauren. I have to say I side with Mike on this one. While automation is certainly a part of the solution moving forward — I certainly don’t think it is the end all to the problem.

    While consumers are demanding more automation — they don’t really want it in lieu of human contact. Thank goodness.

    We’ll need to continue to find ways to blend both the efficiency/cost effectiveness of automation with the human touch to truly serve most customers well.

    Drew

  • http://www.leadlife.com Lisa Cramer

    Lauren – Nice posting and I definitely agree that in today’s Internet world the power lies within the prospect. The Internet has enabled leads to research and accumulate needed information well in advance of taking a salesperson’s call.

    We’ve found that the key to successful marketing automation is in its application to the sales and marketing process verse the actual technology. To gain near-term value you need to have experienced people in lead scoring and nurturing to implement and execute campaigns from start to finish.

    We have a resource library full of lead management whitepapers, educational articles, etc. if you are interested: http://www.leadlife.com/resourcelibrary.aspx

    Lisa Cramer

  • http://www.spearmarketing.com/blog Howard J. Sewell

    Great article, Lauren. One other trend to mention: decreasing marketing budgets and the desire for marketing efficiency.

    Marketing automation helps eliminate marketing waste. It works in tandem with inside sales by eliminating the chance that new leads will go without follow-up due to issues of bandwidth or lack of profile data (i.e. which leads merit sales investment and which don’t.) Similarly, marketing automation helps companies get more from their investment in demand generation by nurturing and cultivating the vast majority of leads that aren’t immediately sales-ready. By increasing marketing efficiency, marketing automation lessens the demand for expensive marketing initiatives designed to bring in net new prospects.

  • http://www.inbound-marketing-automation.ca Eric Goldman

    Lauren. An interesting take on the marketing automation story to date. As Mike and others said, though, I believe we need to understand that Inbound Marketing is one approach to marketing and it’s not the same thing as Marketing Automation. Now as the famous song says, the two go together like love and marriage or a horse and carriage. For this reason, we call the combined approach Inbound Marketing Automation or IMA and it’s the only solution to today’s B2B Marketing needs that we both consult on and use ourselves.

    Having clarified that, though, I’m not sure I agree with your conclusions. In fact I’m pondering writing a post which I might call “Crossing the Inbound Marketing Automation Chasm”. I guess I don’t quite see the tailwind you speak of. The vendors you cite are the first ones to throw out the stat of how less than 5% of companies have yet to automate their marketing. And those of us in the trenches know that many of the 5% who have implemented an IMA system, are still trying to get their heads around how best to use it.

    But this is what blog posts are supposed to be all about, right? Sparking food for thought and yours certainly did. Thanks!

  • http://www.wurlwind.co.uk Mark Stonham

    Great article and discussion on what is a hot and trending topic.
    @mike & @scott and others, I don’t see it as either Inbound OR nurture/automation but a sequence of Attract, Engage, Nurture.
    All three need to be present and effective at selling the next step, to move or convert a suspect to a prospect to a lead.
    All this prior to hand over qualified leads to sales for Transact and Deliver (fulfillment).

  • http://www.alsamarketing.com Alexandre Sagala – Alsamarketing

    Lauren great review of the hard trends pushing marketing automation adoption. One thing is for sure is that B2B buyers have changed they way they purchase.

    Concerning Mike comment on Inbound Marketing vs. Marketing Automation. Both are different solutions to different problems. They complement each other. You need inbound marketing to generate more raw prospects but you also need marketing automation to nurture and market these prospects into paying customers.

    Attracting raw leads without converting is useless. Same for trying to nurture and convert small number of leads.

  • http://www.apelletier.com Alexandre Pelletier

    Good points Lauren. These trends are changing a lot of things at the same time in the marketing space. The one sure thing is that buyers behavior changes and marketers need to adapt.

    Mike’s point is valid as well, but I don’t see both idea of Inbound Marketing and Marketing Automation competing. They are very complementary.

    Yes you need Inbound Marketing to fill the top of the funnel, but without Lead Management Optimization, the conversion rate at the bottom will be much lower. And fully optimized lead management processes relies on good marketing automation implementation.

    Lastly, I think the key here is to be able to match content with the buyers intent, for both attracting new leads with SEO / SEM and nurturing leads with marketing automation.

    I wrote a post about this on my blog called`: “Why You Should Think About Lead Management Optimization for 2011.”

    http://blog.apelletier.com/2010/11/why-you-should-think-about-lead-management-optimization-for-2011/

  • http://www.clever-touch.com Adam Sharp

    Great article.
    I think there are some reasons too why Marketers are adopting Marketing Automation

    Marketers recognise the web is now central to all marketing strategies and they also want to nurture prospects whose buying cycle might be complex- Marketing Automation provides the ability to join the two up as they are tired of chasing, distributing and reconciling lead sheets and excel spreadsheets.

    Keep writing.
    Adam

  • http://e-xplorations.com/ Marketing

    marketing automation is really in demand and well known in the field of marketing nowadays.

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