The Real Return on Marketing Automation Investment

When people examine ROI and possible metrics from their implementations and/or use of Marketing automation technology, there's an interesting conversation brewing.  In a recent post, Leadsloth talks about whether there are more metrics than revenue metrics that can be measured, and reaches the conclusion that really, all benefit from marketing automation comes from increased revenue.

The post discusses the possible metrics as put forth by Sirius Decisions, which are all revenue metrics.  He goes on to say the cost improvements/reductions are marginal.

I thought it would be good to consider what additional capacity is available through the implementation of marketing automation that makes it hard to evaluate cost reduction per se -- but will argue that you will get more done with less resource through implementing marketing automation.

First let's consider a small business.  There is usually only 1 (at best) "marketing" person -- and sometimes there are only sales people and no marketing people at all.  They've got a website that is mostly a brochure, and they need to work with their web people to make any changes or updates, or to add any pages or forms.  And doing so costs them money.

Their Sales people are smiling and dialing -- working to get through to leads and prospects who don't really want to talk with them much.  They are working harder to meet their numbers, especially given the economy and tight times we find ourselves in.

Enter the conversation for "Marketing Automation" -- and their questions are:  Why won't this just be one more expense item?  Will it really add to my top line?  So, obviously, the metrics that will get the executive/business owner's attention will be the revenue-based ROI conversation (as it should).

But let's consider a minimum of 6 capabilities that become possible through implementing any one of several marketing automation tools that exist on the market today, at affordable cost:

1. The ability to easily publish a "microsite" - which for many smaller businesses could be their entire website - or at least the market-facing public site.  This puts control over pages (web pages, and landing pages) in the hands of the business people at the company.  No more waiting and queueing up requests with your web design firm. 
2. The ability to create lead capture forms and place those onto your site pages and landing pages.
3. The ability to identify the "flow" that occurs when someone submits that form - in terms of what confirmation page or messaging to display, which lead category to put the newly captured lead, and whether they should also receive an email or begin to receive a specific nurturing or follow-up sequence.
4. All leads are now captured in a single database, which is also tracking all of their responses to your online marketing efforts -- viewable by both marketing and sales - so if you've got a lead that's "ready" for a sales conversation, that sales person can check out all of the information you've got about that lead - including how they've responded to previous marketing campaigns -- now that sales person can hit the ground running in terms of the conversation they are able to have with that lead -- continuing the relationship that has begun.
5. The ability to create email messages, and follow-up sequences that can automatically be triggered based upon a leads actions -- so once they are set up, they can just run -- and it takes tuning and tweaking to ensure that the follow-ups are effective.
6. The ability to see a metrics "dashboard" re: lead generation, most effective forms and content, email metrics, and conversions.

And those are only a FEW of the capabilities that marketers or small businesses would have available to them.  And for MANY small to mid-size businesses, that is a HUGE difference from current state.

Considering that through traditional sales, many leads are falling out of the process, and the process is largely inefficient.  Here's some statistics:  80% of the leads that are not qualified today, purchase within the following 24 months.  And another one from Marketing Sherpa: For every sales-ready lead that comes into a B2B vendor, there are 5-6X more leads that are longer-term and must be patiently nurtured until they are ready to purchase.

A lot of the small businesses I talk to and work with experience a freedom when they can implement these sorts of initiatives -- and they could not do so before -- so it's added capacity, oftentimes without any increase in staffing.  AND they get the revenue gains as well - because fewer leads are falling out of the process and getting dropped.

In the mid-size businesses that I talk to and work with, many have had to utilize their IT staff to try and bring the intelligence and metrics stored in disparate tools together -- so leads captured at their website, plus metrics from their Email Service Provider system, their event/webinar sign-up and registration system, etc.  It takes them about 30 days to get the "metrics" on how effective their marketing was in any given month.  And they get those metrics a month AFTER the month in question.  That's like turning around an aircraft carrier -- way too slow for the pace of business and the need to nurture and provide leads what they are looking for.  It's very hard to test, tweak and tune with that reality.  Implement marketing automation, and that work, performed by highly paid IT staffers goes away. 

Maybe some other costs get redistributed -- for example, to pay for the marketing consultants that can help you source the content that will feed your new marketing automation and nurturing machine.  But those costs can be tied more directly to the results and revenue that get generated.

So, I believe that while tough to measure, the reality of productivity enhancement for the SAME cost equals cost reduction if we're really looking at a true comparison in capacity and costs.

To explore marketing automation that's affordable, my company, Genoo, provides a comprehensive platform.

Comments

[Steve Woods]

Kim,
great points, and the business case is always an interesting discussion. Looking for a business case in optimizing existing processes is not going to show the right answer. It's only in enabling business processes that were not possible prior where the business case really shows value.

Your point #5 is key - using follow-up and nurture to begin to plug leaks in the funnel early on, and thus eventually convert those leads to deals. That is where there's a lot of value.

[Kim Albee]

Steve,

Thanks for the post -- what's cool is that once people see that putting these follow-ups in place isn't that difficult to think through - and they start to see the benefits, it really is a sense of freedom for what they see is possible.

And I cannot overemphasize the importance of relevant content - because it doesn't matter what tools/technology you employ if you don't have relevant content that is a match for your lead's interests, then you will struggle with marketing automation.

Kim

[twitter.com/fearlesscomp]

Good post, Kim. Having a holistic view of a prospect and seeing everything in one place is imperative and is the main reason that Find New Customers uses Genoo. But the thing that most marketers overlook when selecting marketing automation is the need for a content management strategy and process development to engage prospects. As I like to say, marketing automation is a power tool -- it can build crap very, very fast. That's why content and process are essential.

Jeff Ogden, the Fearless Competitor
Find New Customers
http://www.findnewcustomers.net
http://www.fearlesscompetitor.com

[Margaret Johnson]

Great points. From my perspective, though, the main challenge is that many "marketers" don't know how to market. They are the pen and coffee mug buyers, and the PowerPoint jockeys, and have no clue about how to set an editorial calendar let alone programmatically think about how to best contact and nurture leads. As we like to say here at Oakwood, "when you automate bad process, you just get to chaos faster" and the email marketing bandwagon is a great way to achieve chaos. Planning and process is critical. I am personally challenged still with some of this - from the collecting and writing of "contagious content" to the publishing of that content to the dripping of that content on the unsuspecting heads of clients and prospects - it's bigger than most seem to recognize. Just this morning, I got an automated email from someone who thanked me for visiting their booth at Dreamforce. Um, I didn't attend Dreamforce. Then (ready to LOL, kind people?), right after the email greeting the next part was LITERALLY, as follows:

[PERSONAL TEXT]

OMG. Start with the bad data - I didn't attend the conference and have never heard of this company - and end with the fact that I still have no idea what this company does, and you've got a great example of bad planning leading to bad execution.

So - my point in all this is that the world of lead nurturing requires a lot more discipline than most people seem willing to give it. To be consciously competent requires a plan and a process and means by which to execute against both.