A Tough Road for Marketing Automation

June 20, 2011

Marketing Automation is a hot topic. News about multi-million dollar investments in the space has sparked not only interest from marketers but a multitude of competitors crowding an already jammed market. Is like driving down the highway only to see the traffic stopping right after you take the next curve. As the traffic is slowly moves, some cars faster than others, many drivers start wondering if they should take the next exit.

What’s Ahead for Marketing Automation Vendors

Continue reading my thoughts on what’s ahead for marketing automation vendors on a recently published article at the Marketing Automation Times website.


Email Adoption High But Lacking Best Practices

June 14, 2011

Email Marketing MailboxA Forrester Research “How US Maketers Use Email” Report sheds some light into the use of email by B2B and B2C companies. Author Sarah Glass states:

Email is the most mature and most widely used interactive marketing tool

According to the report, adoption of email marketing is high, with 88% of  B2C companies already using email and 10% planning to use before December 2011. In the B2B space, adoption at 71% is also very high but different from their B2C counterparts, 16% of B2B companies don’t plan on using it within the next 12 months.

Best Practices in Email Marketing

Maybe a surprising finding from the research is that despite high adoption, marketers at B2C and B2B companies still don’t use best email marketing practices such as cleaning the database, letting users select what products and services they want information about, and running welcome routines for newly registered users.

Despite email’s prevalent use, interactive marketers still don’t do all they can to get the full value out of their email efforts – Sarah Glass, Forrester Research

Marketing Budgets and Email Effectiveness

The report says email budgets will stay flat in 2011, but 43% of email marketers expect email effectiveness to increase over the next three years. Other channels are also expected to gain in terms of effectiveness, such as:

  • Social Media (blogs, podcasts, widgets, discussion forums)
  • Mobile (ads, applications, MMS, SMS)
  • Online Video

Getting More Out of Email

The report concludes with some advice for email marketers to get more out of their programs, suggesting them to:

  1. Invest in Analytics
  2. Clean Email Data
  3. Prioritize Relevance Over Rich Media
  4. Detect Devices Used to Access Email
  5. Embed Social Media Into Email Content

Download the Report

The Forrester Research Report can be downloaded for free thanks to Neolane.


When Leads Go Cold

June 9, 2011

Rusty Funnel by TMWeddle @ FlickrIt seems with all the systems we have today to generate, score, and nurture leads, it all comes down to sales. The amount of time it takes for a sales person to follow up with a lead can determine whether the deal is closed or not. At least, that’s what the recent HBR article “The Short Life of Online Sales Leads” states, saying that 24% of companies take more than 24 hours to respond to a lead, and 23% of companies never responded at all.

According to their research, the average response time, among companies that responded within 30 days, was 42 hours.

These results are especially shocking given how quickly online leads go cold – HBR

The article doesn’t go into much detail about whether the leads being followed up had been nurtured by a Marketing Automation system, or even a break down of industries but it does point a good possible flaw in the sales process of most companies.

What good is implementing a complex nurturing system if when the marketing qualified lead is sent to sales, the rep doesn’t follow up? Plugging this hole in the funnel takes more than software.


Marketing Automation is More Than Technology

June 1, 2011

A new research study by Sirius Decisions, “Calculating the Return on Marketing Automation“, sponsored by Marketo talks about the different levels of companies implementing marketing automation platforms (or MAP, as they call it).

“Companies using technology alone to solve their demand creation issues may actually experience negative return where it matters most”

The report breaks down companies into three segments:

  1. No Marketing Automation, and no processes
  2. Marketing Automation and wither no or weak processes
  3. Marketing Automation with average processes

Although talking about processes is not new, what I liked is that instead of just stating the obvious (no process won’t make the technology work) they try to quantify and answer the more important question of How much does a well defined process really contribute towards your overall marketing automation efforts?

Increasing Response Rates

From the report, it seems the key critical element that is impacted the most by marketing technology when it comes to automating campaign response, nurturing, and scoring your leads is the increase in response rates.

The best way to think about it is to imagine the traditional funnel. As you move from one stage to the next (inquiries, leads, qualified leads, etc.) there are only two ways to impact the outcome, either you get more inquiries or you increase the number going from one stage to the next.

According to Sirius, Marketing Automation technology paired with good processes can yield 4x to 5x the number of closed deals. The magic relies on the higher conversion rates throughout the sales cycle. Is not about getting more leads or more inquiries, is about getting the right ones and improving the odds of closing a deal at each stage.

It’s About Content and Processes

But how are processes helping make sure the system works? Here’s the intersting part, because anyone can implement technology to automate what goes out to customers and prospects. The pairing of processes means more than ensuring emails go out when they should, it takes care of ensuring the right message is sent to the right person at the right time.

And when the process includes both sales and marketing working together on definitions, on content strategy, and qualification criteria companies see higher response rates overall. As the report states:

With a handoff process in place, sales now accepts and processes more than 58percent of MQLs; the higher quality of these leads in turn yield a third conversion rate of roughly 49 percent to opportunity, and an increased close rate of a bit more than 23 percent.

Adding technology without processes may make you feel better at first, but will only serve to highlight the problems you always had. The key is to rethink your approach and use technology to leverage your processes, not the other way around.


The Rise of the Content Marketer

May 9, 2011

Content Needs a King in Marketing

Content Needs a King

I know I don’t have to argue the value of content to readers of this blog. If you are even remotely interested in marketing it is clear that the more the web has transformed the way we promote our products, the more firmly ‘content’ has planted itself as the center of our lives.

Besides the rise of social media as marketing channel, the emergence of marketing technology, more specifically Marketing Automation systems, in which you can configure the automated distribution of content to customers and prospects has been changing the way marketers see and create conent.

The power of marketing automation is the ability to target your marketing database with specific content based on their behavior and stage in the purchasing process. According to a recent report from Forrester Research titled “B2B Marketers Must Better Prepare for Marketing Automation” (get it from Marketo for free), marketers have to really focus their efforts on content creation if they are to succeed:

“If they only push this type of content out in campaigns, they push their audiences away, since business buyers have a low tolerance for commercial messages. When companies start to tailor content to different audiences and stages of the buying cycle, they greatly increase the amount of content, and the type of content needed changes”

Marketing Roles Are Evolving

Marketing used to have clearly defined roles. Marketing Directors and Managers on top, Marketing Coordinators, Marketing Specialists in the middle, followed by Copywriters, Designers, Web Masters, and more at the bottom. Add a few other roles such as events coordinator and more recently email marketing specialist and maybe even something related to social media and you have the hierarchical organization of 90% of marketing departments today.

With the change and addition of new marketing channels, marketers now see themselves more as content creators than anything else. Twitter feeds need updating, Facebook pages need commenting, blog posts need editing, and YouTube videos have to be tagged. All of this new material requires some form of marketing organization, or better yet, organization and support from the marketing team.

What used to be clear roles (i.e. the copywriter writes copy for the ad while the designer makes the ad look pretty), is now morphing into a free for all. Interns are ‘liking’ pages on facebook while the events coordinator is Tweeting about the trade show giveaway at their booth. Sales reps are sharing webinar recordings with prospects, the CEO is blogging his latest thoughts on the industry, the human resources manager is updating the company’s LinkedIn page.

Does it sound familiar? And scary? Yup!

A new role is starting to take shape. I first heard a term I think will become norm at the last Power of eMarketing Conference in San Francisco, during a panel discussion in which Chris Baggott, Compendium’s CEO, talked about the “Content Coordinator“.

The Content Coordinator

The Content Coordinator is basically the person on your marketing team responsible for coordinating content creation and distribution. Note that this person is not necessarily responsbile for creating the content per se, and in fact some will argue that content creation and copywriting are the same, but rather helping with maintaining a consistent message across all channels (content creation should actually be encouraged throughout the company and a good social media policy put in place).

How you think about what content is for your company will determine how big this role is. Think about:

  • Videos
  • Webinars
  • Presentations
  • eBooks
  • Whitepapers
  • Sales Collateral
  • Blog Posts
  • Tweets
  • Facebook Comments/Likes/etc
  • LinkedIn (company page, discussions, etc.)
  • Website

And the list could go on a few more bullets. But you get the idea… content can be as simple or complex as you make it. The important thing is how consistent, or integrated your message and branding is across channels. And unless you have someone paying attention to it, you’re likely to lose the opportunity to influence people towards buying your product.

So while adding another person to your marketing budget may seem tricky at first, maybe you don’t have to hire an additional person (although for larger organizations that should definitely be the case). You could simply rework some job descriptions to free someone’s time to focus more on the whole content coordination aspect. This could be a good stepping stone for a promising young Marketing Coordinator, for example. The important thing is to make it official and empower this individual to really take charge of content inside your organization. This will save everyone (especially the Marketing Manager) a lot of time and avoid headaches down the road.

Larger organizations may even start thinking of a higher level role, of Chief Content Officer, created in order to plan, coordinate the execution, and report on content ROI.

Whether you decide to formally create this new marketing position or keep things the way they are for now, one thing is certain – your content is more king than ever. How you decide to work with it will determine whether you succeed or fail.


The Challenges in Adoption of Marketing Technology

May 3, 2011

A recent webinar hosted by Neolane, “Crack the Code – Getting C-Suite Buy-In for Your Marketing Tech Purchases” had a very interesting presentation by Suresh Vital from Forrester Research.
Based on a recent report on Marketing Technology Adoption for 2011, the findings of their research shed some light on the challenges we face when it comes to marketing technology.

The Goal of Marketing Software

The need for marketing software comes from the necessity to better understand customer behavior across multiple channels. Companies need to be able to track and measure customer interactions from a reliable source and that has driven a lot of the recent interest in Marketing Automation and Customer Intelligence technologies. The goal is to make use of cross channel marketing strategies to target the customer at the right moment and influence purchase decisions.

Not a new trend, but rather a need that has ben greatly amplified by the prevalence of social media channels which in turn is making companies look for technology solutions. Without solid customer data, cross channel strategies become increasingly difficult to implement.

Marketers as Technologists

According to Forrester’s research, data driven marketers are divided about technology investments. 53% of Customer Intelligence professionals (those who own the customer data and are responsible for customer analytics) consider themselves as technology leaders while 47% said they were technology followers.

While personalities play a role, I think corporate policies and the marketing leadership play a big role in shaping up how marketing technology is brought into the company.

Mobile technologies were also a clear trend for 2011, having the majority of marketers saying they are planning on using or increasing the use of mobile marketing technology. Improving customer experience across channels was also top of mind.

Technology and the Marketing Budget

Technology accounts for 10 to 14% of the marketing budget, according to the research. Marketers are starting to play a strong role in defining the needs and in the selection process when it comes to purchasing marketing technology. This is a shift from the traditional back-seat marketers take for software purchases, typically letting the IT department decide.

27% of marketers say they are the final decision makers

Adoption Problems with Marketing Technology

A surprising finding was that the most important criteria for selection of marketing technology is cost, quickly followed by functional alignment.

82% of respondents say cost is number one factor in deciding marketing technology

This means marketers are settling for solutions that are more economical as long as they match most of their needs. Those solutions that praise themselves for being the all encompassing [fill in the blank] for marketing may be surprised to find out that they are losing deals to lesser competitors simply because of pricing, but that’s not all they should focus on.

As part of the adoption issues, the research found out that the top three barriers for using marketing technology are:

  • 49% Cost
  • 47% Uncertain ROI
  • 40% No Budget

This makes sense. With markeeting budgets still being threatened due to economic uncertainty, marketers are pressed to justify their purchases and show ROI. New tools on the block (social media monitoring and others are the likely candidates) may have a tough time showing solid ROI, therefore their purchases being delayed. Vendors should therefore really work with their customers and prospects in trying to justify the purchase. Marketers also need to work on their justifications and their business cases to make senior management understand why a technology can help the company especially when Facebook, Twitter, and other channels are still a mystery for most corporate executives.


Selecting the Right Email Marketing Provider

April 6, 2011

You either have or will have to evaluate and select an email marketing software provider at some point in your marketing career. And there’s a good reason most people dread this project, after all with so many ESP (email service providers) out there, is really a daunting task.

That’s why I wrote a comprehensive guide to help you in your email selection process. Published in a 3-part series by Email Vendor Selection website, it shows a proven approach to quantitatively help you narrow down your choices and select the solution that will be the best fit for your organization.

Check out part 1 of the “Taking control of the email vendor selection process” article and let me know what you think!


Why Sales and Marketing Don’t Get Along

March 24, 2011

Talk to marketing mangers and sales managers about their biggest complaint and you will likely hear “They don’t follow up on leads!” from the marketing guy and “Their leads suck!” from the sales guy. No news there. But why is that this fight on lead quality continues?

According to a recent chart published by MarketingSherpa (below), 80% of marketers don’t spend time qualifying leads before sending them to sales.

B2B Lead Qualification Requirements

What information is required before leads are passed to sales?

It is interesting that back in 2009, MarketingSherpa had published a chart showing the key challenges marketers faced and “generating high quality leads” was the top one. Sales keeps insisting on receiving better leads, marketing knows that is an issue, but still they are not delivering. In their “CMO Perspectives on B2B Marketing Automation” this challenge for high quality leads is shown as having increased from 69% in 2009 to 76% in 2010.

A Gartner Group presentation on allocation of Marketing Budgets for 2011 showed that the top three marketing priorites for this year are:

  • Acquire new customers
  • Improve customer retention
  • Support sales including lead generation programs

If the budget is there, then maybe more companies will be able to finally put some technology in place to help with lead quality, more specifically marketing automation with the goal of improving lead quality. Because the solution to the disconnect facing marketing and sales today is to fix the “lead problem”, once leads are better qualified the two organizations can be friends again.

 


How Everybody Wins with HubSpot’s Funding

March 10, 2011

As everyone in the marketing industry surely knows by now, HubSpot raised $32 million in additional funding. This means that is time to update my previous charts on marketing automation funding (see below) and the funding timeline, because HubSpot just surpassed Marketo as the highest funded marketing software vendor to date. (Note: yes, I wouldn’t necessarily say HubSpot is a ‘marketing automation’ vendor per se, but they are moving towards that end).

Click to enlarge

With the new round of financing, HubSpot now leads the pack in terms of VC funding and takes the total amount raised to date by key marketing players to over $220 million.

Click to enlarge

Updated above is the timeline of funding for the key players in the marketing automation space (you may argue HubSpot is not a marketing automation vendor, this is subject for another post).

Everyone Wins

But it also means something else. The money flowing to companies like HubSpot is impressive, and the results of the investment will not only benefit them but also the whole marketing automation and marketing software industry in general. Is almost like a virtuous cycle, where money goes to marketing software vendors, who use it to build better products and educate the market, which then learns about the benefits of such solutions, purchase those solutions, and publicize it themselves and pay those vendors for services.

Industry Impact

Should established marketing automation players be worried about HubSpot’s sudden infusion of capital? After all, now that they have the deep pockets to invest in improving their product, maybe their solution will start looking more like what marketing automation vendors have been selling for some time now. For Eloqua, at least, they say there’s no need to worry since HubSpot is serving a very different market.

Market Segmentation

And here is worth pausing for a moment. We sometimes tend to bundle all of the vendors into one big basket, because a search for marketing software solutions will show more results than you would care to browse and the sales literature of most of them will make you think they all do very similar things. Nothing could be further from the truth, since after taking a few of those solutions out for a spin you will discover there’s much difference under the hood… but that is a topic for another post, since it can take some time to untangle the value propositions and real benefit all the marketing software vendors make.

So HubSpot’s recent capital infusion should be treated as good news by all marketing vendors. It does seem the whole industry is due for a shake-down but until then, the awareness and market education will benefit everyone.


Marketing Automation Catching On Fire

February 16, 2011

According to the recent report by Marketing Sherpa, “CMO Perspectives on B2B Marketing Automation” (offered for FREE by Marketo until March 1st), “the majority of CMOs have either implemented, are in the process of implementation, or are at least considering implementation of marketing automation software“.

34%: Our marketing automation software is partially implemented

19%: Our marketing automation software is fully implemented

17%: We have not began implementation but plan to

30%: We have not began implementation and don’t plan to

This is probably good news for the vendors, which are competing in an increasingly crowded market. Some have even suggested that marketing automation market is floundering, but it is such a new market and offering that is innevitable to have doubts, especially with these many vendors in the space. With time, a shake out is likely (in fact, the recent acquisition of Unica and Aprimo may point to consolidation) and the evolution of solutions will ensure marketing automation has a place in most marketing organizations, much like CRM is now standard for sales departments.

A Marketing Automation Timeline

So let’s take a look at the marketing automation companies in play today (mostly US based in this case) and when they were founded. Interesting to note that the majority of the players only came to existence not even 5 years ago. This nascent industry still has lots of growth to do.

Timeline of Marketing Automation Vendors

You may spot some companies that were not considered to be “marketing automation” players just a year or so ago. That points to the evolving nature of the market, and the key functions of lead nurturing, scoring, and automated triggers becoming part of email marketing and other marketing solutions. Marketing Automation Software Guide published a B2B Marketing Automation market map that shows a few other players I ignored for the timeline above, like SAP and Oracle because although they do have marketing automation capabilities it is not their core business (and I don’t agree with tagging Salesforce.com as a marketing automation solution).

Investment in Marketing Automation

Another interesting factor to consider in the marketing automation industry and why it seems to be catching on fire is the money that is flowing towards some of the key players. Just a few marketing automation companies have already raised over $170 million dollars combined. Whether they will all be around a couple years from now is still to be seen, but it does make for a highly competitive environment. With cash to burn, these companies are focusing on growing the customer base first, with hopes that revenue will follow.

Total invested in Marketing Automation vendors

The marketing automation infographic above (click to enlarge) shows the top players in the MA space that have raised over $1 million dollars. Also interesting to note that if you break down the fundraising of each of the above vendors into a timeline (like I did below), most of the investment has been made in the past couple years.

Marketing automation funding timeline

You may have to click to enlarge the funding timeline infographic above.

Note: I used publicly available data and wasn’t able to find Eloqua’s Series A, so I deducted based on valuation of their second round.

The Marketing Automation Market

The Marketing Automation market is at an interesting stage. Companies are fighting for customers, trying to educate the market, and we may be seeing the beginnings of consolidation. Based on the investment figures above it seems is catching on fire, but at the same time there’s fierce rivalry and still a lot of room to improve… what will happen? I don’t know but it promises to be really interesting!

What do you think ?

P.S. Let me know if I missed any MA company in the graphics above or if I got incorrect data. I’d be happy to fix the infographics for benefit of everyone.


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