Marketing Automation Software

Marketing Automation (MA) is a fairly simple term applied to a complex marketplace. Most every business engages in marketing, but how each company markets varies widely. Businesses that sell to other businesses (B2B) firms have longer sales and marketing cycles and engage in more relationship selling. Businesses that sell to consumers (B2C) rely more on brand and high-volume direct marketing. Of course, these two approaches require very different systems. This overview aims to help both improve understanding of marketing automation solutions and clarify the marketing automation market for buyers.

Here’s what we’ll cover:

What Is Marketing Automation Software?
What Type of Buyer Are You?
The MA Vendor Landscape

Market Trends You Should Understand
Benefits & Potential Issues

What is Marketing Automation Software?

Henry Procter is credited with saying “I know I waste half of my advertising dollars. I just wish that I knew which half.” This is precisely the question that marketing automation software answers. It assists firms in developing, executing, and tracking campaigns. Managers use these systems to automate workflows, manage collateral, track prospect behavior, and qualify leads before they are passed to sales.

B2B systems have sophisticated lead generation and lead management capabilities. For example, lead scoring functions score leads based on demographics (e.g. geography, industry, size) and behavior (e.g. website activity, responses to campaigns). The resulting scores ensure that the sales department only receives qualified leads that are close to making a purchase. For leads that are not ready to buy, MA provides campaign management, which helps marketers to foster the relationship through techniques such as drip marketing and “stay in touch” campaigns. 

B2C systems tend to manage vast databases of customer data - often millions of records. These systems have sophisticated tools for analyzing and segmenting customers into different categories of buyers. Markets can then execute specific campaigns, or “treatments” for each segment. Campaigns are typically designed to elicit a direct response, such as returning to a website to make a purchase. Alternatively, campaigns may feed a target prospect list into a call center systems for telesales outreach. 

MA software also provides companies with advanced reporting and analytics to measure the performance of initiatives. This allows managers to see which campaigns and channels are driving leads, along with the costs and revenue of those initiatives. In the end, this helps organizations decide how to better allocate resources.

What Type of MA Buyer Are You?

We believe that most buyers segment into the following four categories:

• B2B enterprise buyer. These buyers work for firms that market to consumers. With millions of prospects and huge volumes of data, they need sophisticated analytics and segmentation tools to define, select, and reach members of their target markets.
• B2B enterprise buyer. These buyers work for firms that market to other businesses, and engage in longer marketing and sales cycles. They are primarily seeking capabilities that help them nurture relationships with prospects. Lead nurturing, lead scoring and sales force automation (SFA) integration are critical capabilities.
• CRM suite buyer. These buyers have less sophisticated requirements, but value integration with their other customer relationship management (CRM) programs. They are typically content to trade feature depth for native integration with CRM, SFA and other applications. 
• Email marketing buyer. These buyers work for small businesses that want to engage in more sophisticated email marketing, but are not ready to deploy enterprise-class MA. They are primarily focused on managing a database of contacts and executing regular email campaigns. 

The MA Vendor Landscape

Market Trends You Should Understand

There are a number of market trends that buyers should understand, including:

• Software as a Service (SaaS). In the MA market, SaaS is less of a trend than it is the dominant model for deploying software. Buyers will find that the majority of marketing automation solutions - with the exception of some high-end B2C solutions - are delivered through a SaaS model where the system is hosted by the software vendor and accessed over the Internet by user. A benefit of web-based systems is increased accessibility. They can be accessed on multiple devices and from any operating system, whether you're a Mac or PC.
• Social media. Social networking gives managers a new channel. Firms tweet coupons to customers and post special offers to friends on Facebook. Advertising videos are successful if they go viral on YouTube. MA is embracing all of this. Social networking integration will drive the next generation of MA.
• Use of two dimensional barcodes. Two dimensional (2D) bar codes are seen more and more often on print ads, bill boards, bus stop benches, and even as tattoos.  Customers can use smart phones as code readers to get information about a product or service immediately on their mobile browser. Current marketing automation solutions can use 2D bar codes with third-party solutions, but new versions will have built in support.
• MA vendor consolidation. Large ERP and CRM vendors will acquire some firms, while some niche providers will combine to remain competitive. IBM and Terradata both made significant acquisitions by picking up Unica and Aprimo, respectively. Oracle purchased the assets of Market2Lead. Buyers should expect to see more M&A activity going forward. 

Benefits & Potential Issues

Buyers who successfully implement a MA system should expect to realize the following benefits:

• Identify and qualify more leads. Marketing automation allows firms to better target potential customers, quickly qualify leads, and send them to the appropriate sales rep.
• Improved sales and marketing coordination. MA helps firms better coordinate marketing and sales activity. For example, a firm can promote a single product and track the effectiveness by looking at the number of qualified leads generated and comparing that to the number of leads converted to sales.
• More effective campaigns. MA lets firms measure their campaigns and adjust those campaigns based on what they learn. 
• Decrease costs. The savings per marketing dollar shows up in several ways. Two of the most important are number of the employees in the marketing department and the dollars spent on outside support. 

Issues with MA software often results from unrealistic expectations and poor implementations. For example, marketing automation solutions cannot make a bad service or product into a good service or product. If the marketing collateral is bad or misses the point, MA will simply deliver a bad message more efficiently. Finally, if the wrong target market is selected, effective delivery to that target market will not help the bottom line.

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