The Secret Engine Behind Effective Lead Generation, Nurturing and Management
Credit to Josh Stailey of The Pursuit Group, Inc. and The Business Marketing Institute
This is part one in a two part series on marketing automation. Marketing Automation, Part 2 highlights the 4 pillars to success. This post will explain what marketing automation is and why you need it.
For several good reasons, marketing automation is among the most significant initiatives in the marketing profession today. Yet, there remains considerable confusion about what marketing automation is and how to make it work.
In its original incarnation a few ago, marketing automation was seen as a way to make enterprise marketing departments more efficient. The toolset usually included a database for managing digital assets (content, art, logos, etc.), a system for managing asset production and approvals, collaboration tools, a campaign calendar application and some e-mail and web content management software.
But since then, buyers of almost everything—from consumer products to business-to-business equipment and services—have participated in a revolution that has forced marketers to address things like:
• The fact that a growing number of potential buyers no longer reveal themselves or invite personal interaction with vendors until they have researched and determined a solution, then settled on a short list;
• The need to understand and respond to “digital body language” –the online behavior of customers and prospects;
• The rise of social media as a tool for prospects to learn about solutions and customers to grade their own vendor experiences
Now—especially for SMB (small- and medium-sized businesses) and B2B companies – the term “marketing automation” revolves around what Industry analyst Ian Michiels calls “marketing engagement automation,” which focuses on how prospects and customers interact with the array of online and offline communications channels. In his own words, new marketing automation “might include setting up an email campaign, sending it out, and tracking performance; or creating a new landing page with a form capture element; or more importantly, managing communication with a prospect across multiple channels (email, the Web site, microsites), and tracking their behavior to identify the relative propensity to purchase.”
That’s close enough to ease the confusion. Now, the most important issue…
Why Your Company Needs Marketing Automation
Almost every BtoB company out there has a leaky sales funnel. In many, only the hottest prospects and the clearly unqualified leads get the proper treatment; the rest of the funnel leaks like a sieve. The qualified—but not yet sales-ready—leads are routinely deferred, forgotten or ignored until they fade away. Yet, it is this last class of prospects that often defines whether your company is just getting by or going to the next level. For example, in high technology, several studies have shown that over half of the people who demonstrated initial interest actually purchased a product in that category within two years. But in many cases the initial supplier they reached out to didn’t nurture them, so they ended up buying from another vendor.
The new marketing automation tools enable your company to accomplish two major goals:
1. Stop the leaky funnel by nurturing qualified prospects until they are ready to buy, and do it without involving valuable sales talent in the process;
2. Recognize the new “stealth” buyers by their online behavior, track their interactions, provide necessary information, then respond quickly when their behavior signals they are ready to buy
Even if this was all an automated marketing/sales funnel could do, it would be valuable to most companies. But that’s just the start; the role of marketing automation is to not only prevent prospects from falling through the cracks, but to:
• Increase success ratios by tailoring and managing outbound interactions and content to each prospect’s specific situation and need;
• Use inbound marketing to generate and nurture potential buyers not reached by outbound lead generation efforts;
• Score leads and prospects based on both their “fit” (e.g., industry, size, etc.) and behavior (e.g., online and offline activities);
• Develop, then maintain, a seamless flow of information between marketing and sales;
• Provide in-depth, real-time reporting on all leads, prospects, activities and communications between you and potential buyers;
Sound like a silver bullet for marketers? Could be…but it doesn’t come easily.
Marketing Automation Is Not A Set-and-Forget Tool
Even though marketing automation is a popular and fast-growing concept, some industry observers have already issued warnings about the “CRM effect.” That’s the old (at least in Internet years) problem in which companies rushed to embrace CRM as the “silver bullet” for sales automation without having appropriate processes in place throughout their sales force. The result: some two-thirds of all CRM initiatives “failed” to reach stated goals. And some multi-million dollar investments in CRM were abandoned altogether.
CRM has proven to be a valuable tool, however, when launched and sustained with appropriate sales processes, training and motivation. But memories are short and the same risk holds for marketing automation. Four ingredients must be in place for marketing automation to succeed:
1. Marketing processes defined and tested;
2. The ability to comprehensively capture prospect interactions on your website (and with every other form of digital interaction—e-mail landing pages, etc.—as well);
3. A library of content that can be applied to every possible interaction. This includes content customized by product, geography, buying cycle stage, or other relevant filters;
4. The ability to hand sales-ready prospects over to your sales force at the right time (and get them back for further nurturing if they do not buy)
That’s a handful. But we think it’s worth the effort. Consider the research from Aberdeen Group that shows companies with the highest performance in annual revenue and return on marketing investment were four times more likely than peers to automate customer engagement with a marketing automation solution.
Marketing automation helps marketers increase the number of leads and prospects moved through the funnel, manage both outbound and inbound marketing efforts simultaneously, and deliver only sales-ready leads to your sales pros. In addition, real-time visibility into the pipeline enables marketers to focus on channels that drive the highest conversion rates, calculate customer acquisition rates/costs by marketing channel, and identify when campaigns or initiatives drive above average close rates.
And the results extend far beyond marketing metrics; marketing automation can shorten the time for prospects to convert to revenue, reduce bottlenecks in the sales cycle, and help forecast sales growth more accurately by identifying realistic and achievable targets.
On the unlikely chance that you haven’t heard of marketing funnel automation until now, you will in 2011. The concept is no longer a novelty, but a proven boost to marketing effectiveness and a rational and accountable way to—finally —close the gap between marketing and sales.
Credit to Josh Stailey of The Pursuit Group, Inc. and The Business Marketing Institute