Automating Marketing

Meet Doug. Doug is the CMO at a start-up B2B company. He has been working extremely hard to hit all of his lead generation numbers this quarter. The website redesign is complete; the consultant he hired has created and is implementing a search engine optimization strategy, the two interns are posting the latest product information to Facebook and Twitter, and he has personally traveled to four industry trade shows so far this year. Doug is feeling pretty confident as the number of leads his team has generated is 25 % above target.

Then Dan, the CEO, calls. The Sales department has been complaining to Dan that they are wasting too much time with the leads that Marketing has generated. Most of the leads were not ready to make a purchase and a majority couldn’t tell the sales rep when they would be ready.

Doug was stunned. He was exceeding all the goals that were set for him but it wasn’t enough.

Doug’s first reaction was to think of ways to generate even more leads but then he remembered a story he had read a few months ago about marketing automation and lead nurturing. He realized that he didn’t need to just generate more leads for Sales but he needed to generate more leads that were ready to buy and so his search for a solution began.

Doug’s story is not unusual among businesses that sell products and services to other businesses.  According to a survey of more than 900 marketing executives by MarketingSherpa on the state of B2B marketing published earlier this year, “generating higher quality leads” (78 %) and “generating a higher volume of leads” (44 %) were the two most cited challenges facing marketing departments. Also of concern was the lengthening sales cycle. Among respondents, 60% experienced a sales cycle of longer than 3 months.

Implementing marketing automation technology has become a popular solution to easing these pressures.

What is Marketing Automation?

Forrester Research defines marketing automation as the “tooling and process that help generate new business opportunities, improve potential buyers’ propensity to purchase, manage customer loyalty, and increase alignment between marketing activity and revenue.” Put another way, marketing automation is a combination of software and internal processes which generate more leads that are ready to buy and that become loyal customers.

The market for marketing automation is still young, but it shows great promise. When IBM bought Unica in 2010, it believed the market was worth $2.5 billion and doubling every year. In 2009, Forrester Research estimated that between 2% and 5% of B2B firms had invested in full-featured marketing automation functionality. By 2011, that number has grown to 18%. At this pace, one can assume that adoption is likely to exceed 50% within the next few years.

Comparing these numbers with a recently released Forrester report showing that 71% of B2B companies currently use email marketing it is easy to see the disparity in adoption rates. Why is marketing automation being adopted so slowly in comparison and what does the future hold?

Marketing Automation and Email Marketing: Blurring Lines

Less than 10 years ago, analysts were saying that if email marketers could include behavior in their campaigns that their lists would double. Marketing automation vendors have been able to figure out how to tie in more data than just simple preferences before many email marketing vendors. Marketing automation treats each person as a unique individual, instead of groups and segments, and can track a wide variety of data, website visits, white paper downloads, CRM support center information, etc. As a result, marketers utilizing marketing automation systems are getting much better results than they could get with an email blast.

“I think the biggest change happening in a couple of years is that the differences between marketing automation and the traditional email world are going to melt away,” said Bill Nussey, President and CEO at Silverpop. “The next evolution is simply a continuing merger of those two spaces as it becomes increasingly common for email to be at the core of marketing automation campaigns and for email marketers to better understand the importance of automating their campaigns – in order to distribute more relevant and targeted messaging while also working efficiently,” he added.

Atlanta is home to more than its share of marketing automation vendors with many regularly included in industry analyst reports and surveys. Solid State spoke to a number of them for this story.

Target Audience = small- and medium-sized businesses (SMBs).

Loopfuse’s OneView product helps marketing teams create, manage, and refine marketing programs by automating the lead qualification process. Product features include email marketing, lead capture, scoring and nurturing, inbound marketing, social monitoring and marketing dashboards designed to help keep everyone on the marketing team informed as to how well campaigns are performing.

“Marketing is the last horizontal department to be standardized or automated. Look at what Oracle and SAP did to accounting and HR, and what Salesforce.com has done to the sales department, it’s finally marketing’s turn,” said Sean Dwyer, President and CEO of LoopFuse. “The challenge that marketing automation has traditionally faced has just been getting the penetration. I don’t think there is any question that the value is there,” he added.

Last year LoopFuse released their “freemium” marketing automation solution that is limited based on volume and not features. This offering allows SMBs to test out the product when it fits their schedule before having to commit financially. “We used to have a 15-day free trial. People would sign up, priorities changed and they would miss out on the limited time trial,” said Dwyer. “With any marketing automation tool there is a bit of a learning curve. Why make time a barrier?” he added.

Target Audience = SMB

Pardot’s marketing automation product shows the sales team exactly where to spend its time in order to maximize ROI. Micro-level web analytics allows Pardot to capture all relevant prospect activities, both on and off their customer’s site, and help determine who is showing the most buying signals. Sample product features include CRM integration, lead scoring, prospect tracking, and automated nurturing.

Pardot’s customers are businesses with generally less than $50 million in annual revenues, have fewer than 50 people in sales or marketing and at least one full-time marketing resource. The bulk of their customers are B2B technology companies who are early adopters and at the forefront of marketing automation software use.

“We provide the most bang for your buck with a great set of features for the cost,” said David Cummings, Co-founder and CEO of Pardot. “Our software is a little different from some of our competition, it allows unlimited prospects in the database and is priced based on traffic to the company’s website and the number of emails sent, more like a traditional email marketing vendor,” he added.

Target Audience = Large Enterprise

Target Audience = Mid-Market to Enterprise

Silverpop’s Engage marketing platform helps marketers turn prospects into customers through the creation, automation and delivery of relevant information across multiple channels. Companies can create and manage sophisticated email campaigns that reach millions of individuals—one at a time—engaging prospective customers and enhancing lifetime customer value and brand loyalty. Campaigns are created using a graphical drag-and-drop design engine.

Silverpop provides both product support and strategic consulting services to help marketers maximize their use of the product and to get “up and running” very quickly without the need for IT support. “Silverpop has a very rich service model that really rounds out the product offering, which helps customers ensure their success,” said Bill Nussey, President and CEO of Silverpop.

“We are capable of handling the scale and sophistication of more serious marketing organizations,” said Nussey. “The most distinguishing parts of our offering over competitors are the result of our hybrid merger of an email marketing offering and a traditional MA offering. When we put those things together some really amazing things came out of it,” he added.

Target Audience = SMB

LeadLife Solutions’ marketing automation product is bundled with marketing and sales specialists to ensure effective implementation and use of the lead management process. LeadLife’s approach is based on their experience that marketing automation technology has great promise but, if implemented without trained personnel, would be very difficult to fully optimize.

“Our product is really not just technology, it’s a solution,” said Lisa Cramer, President of LeadLife Solutions. “What we found while going through the marketing automation space is that it is really easy to buy automation. It’s a little more difficult to actually make it usable within your current marketing and sales process and applicable to your business,” she added.

“Many of the [marketing automation] companies just keep trying to have feature wars,” said Richard Brock, CEO of LeadLife Solutions. “Some of the features may be good for massive companies but what we are seeing is that [marketing automation] is more about fine tuning touches to make yourself different than the competition that is constantly evolving. That’s why it has this intellectual capital component of how you apply the technology,” he added.

Target Audience = SMB

LeadMaster’s solution closes the loop between marketing and sales by tracking leads in real time throughout the sales cycle, from demand generation to lead closure. Combining sales force automation, marketing automation and virtual call center capabilities, this web-based application helps companies pinpoint where leads are quickly converting into revenue in order to increase close ratios and maximize return on investment on marketing campaigns.

“One of the challenges with most tools today is you really have to be hands on, you have to be an expert, constantly measuring and modifying,” said Andy Brownell, CMO of LeadMaster. “Wouldn’t it be nice if it happened a little more automatically? Imagine a marketing automation system that tries to automate as much of the interaction as possible so you don’t need to be quite as hands on. That is the future for Leadmaster…making it even easier for customers,” he added.

What to Look for in a Marketing Automation Solution?

Marketing automation technology is an enabler. It automates business process and does not, by itself, improve marketing ROI. Business should take the lessons learned from the many failed CRM implementations in the late 1990s and the 2000s and prepare their organizations for the changes required to fully leverage marketing automation. The table below from Forrester encapsulates the activities organizations ought to undertake prior to a marketing automation implementation.

With these directives in mind, we asked a local marketing executive whose company had implemented a marketing automation solution about their evaluation process.

“What was most important for us before implementation was cleaning up our database,” said Kissling. “It was also imperative to make sure that sales and marketing were working together and that the lead process was in order,” said marketing director Jody Ma Kissling of Atlanta-based Lancope, a network performance and security monitoring vendor.

“We looked for a marketing automation provider that could fill a lot of the needs that we had already identified, consolidate a lot of the intelligence that we were getting from Google Analytics and our email marketing provider, and enable us to do that on a more automated basis,” she added. “We wanted to get our arms around an introductory solution that helped us understand how to integrate the system into our sales and marketing process. Price was a factor but also that it was highly integrated with Salesforce.com.”

Despite the work required prior to implementing marketing automation technology, it remains a very attractive option for marketers that need to increase their qualified leads.

Indeed most B2B companies may not have a choice as business prospects increasingly turn to peers and influencers to investigate products and services and respond less to push marketing offers. This shift requires marketing programs to become more complex as the number of interactions required to attract, educate, and qualify a sale increases.

For marketing automation vendors, the future is looking bright. In the first quarter of 2011, marketing automation providers across the industry reported an increase in revenue, customers and year-over-year growth. This proved true for both enterprise-level and SMB players.

Highlights reported by specific vendors:

• Marketo adding 146 new customers, reaching the 1,000-customer count
• Eloqua reaching 900 customers
• Pardot reporting its most successful quarter to date, adding 100 clients in Q1
• Neolane increasing its revenue 80% compared to Q1 2010
• SalesFUSION adding 100% more customers over the same period last year
• Genius.com continuing its 75% year-over-year customer growth rate
• Silverpop adding 20% more new customers in Q1 2011 than Q1 2010
• LoopFuse increased customer accounts 22% from the previous quarter
• LeadLife Solution’s revenues grew by 250% last year
• eTrigue expecting a 60% year-over-year revenue increase in 2011

If you’ve implemented a marketing automation solution from an Atlanta-based vendor, and have a tip or two to share, we would like to hear from you. Send your tip(s) to editor@ventureatlanta.org.

July 2011 Newsletter

• Summer Getaway Tech
• SPARKS – rappidApp: Content Management Goes Mobile
• THE MONEY BIN – Q+A with the Metro Atlanta Chamber’s Larry Williams
• NOTEWORTHY – Automating Marketing