Marketing Automation. Gleansight Benchmark Report Q Content. Sidebars

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1 Q Content Part 1: Topic Overview Part 2: Reasons to Implement Part 3: Value Drivers Part 4: Challenges Part 5: Performance Metrics Part 6: Success Story Part 7: Vendor Landscape Sidebars Survey Stats Benchmark KPIs Core Technologies Gleanster Numbers Vendor Quick Reference Guide Gleansight Benchmark Report Marketing Automation Contrary to the name, marketing automation tools are only partly about automating marketing. Automation for the sake of automaton accomplishes very little for organizations. More importantly, automating mediocre processes just accelerates mediocre results. Marketing automation tools are designed to build more intimate relationships with prospects over one or more digital channels across the entire lead-to-customer lifecycle. These relationships form the basis for predictable revenue performance, and visibility into how marketing dollars translate to sales results. The tools facilitate digital multi-channel communications (mainly via , landing pages, website analytics, and social media) with target audiences to collect and aggregate individual customer data across different engagement channels. What really makes marketing automation tools compelling (and where the automation really comes into play) is the ability to configure business rules that can trigger and initiate communications with prospects at just the right time, over just the right channel, with just the right message, without manual intervention from marketers. In essence, marketing automation tools help marketers automate more intimate relationships to identify new revenue opportunities, gain visibility into the effectiveness of marketing spend, and unite marketing and sales in the common goal of maximizing profit for the organization.

2 Gleansight: Marketing Automation 2 Survey Stats The research findings featured in this Gleansight benchmark report are derived from the Q Gleanster survey on Marketing Automation. Total survey responses: 220 Qualified survey responses: 151 Company size: <$1M (6%); $1-10M (19%); $10-100M (45%); $100M - $1B (20%); >$1B (10%) Geography: North America (95%); Europe (3%); Other (2%) Industries: Software and Technology (36%); Business Services (8%); Financial Services (16%); Education (7%); Entertainment (1%); Other (32%) Job levels: C-level (12%); SVP/ VP (29%); Director (18%); Manager & Staff (41%) Sample survey respondents: Director, Cisco VP of Marketing, Link America Manager, MicroTech CMO, OverGo Studio Manager, Dassault Systems Director, Reflexis Systems Director, QA Symphony Part 1: Topic Overview As many organizations can attest to, having multiple disparate customer engagement technologies (separate tools for marketing, landing page hosting, web analytics, list management, social media marketing, etc.) that don t integrate is problematic in the age of the empowered consumer. You can use separate tools to engage target audiences, but it s very difficult to collect and aggregate customer behavior across different channels, customize message frequency to buying triggers, and give marketing and sales visibility into the data collected. According to Gleanster, the average organization has 3-5 disparate technologies supporting customer engagement. Disparate technologies lead to fragmented data, difficulty managing customer preferences, and multiple licenses. Marketing automation can actually replace some of these disparate systems AND layer on a rules-based communication engine to maximize revenue for an organization. Marketing automation helps to centralize multi-channel customer data so marketers can infer buying intent, automate lead nurturing communications to educate potential buyers, or route the hottest leads directly to CRM and alert sales accordingly. This Gleansight benchmark report explores the use of marketing automation in the context of Top Performing organization to identify what they do differently with the tools, how they maximize a return on investment, and how they measure the success of initiatives. It turns out Top Performing organizations are 5x more likely than Everyone Else to use marketing automation. But it s not just about using the tools, it s about using them in the right way, because as Top Performers can attest to, there s a lot more to extracting benefits from marketing automation after the initial implementation. Research over the last five years has indicated that, in general, marketers are experiencing diminishing returns from traditional tactics such as large volume campaigns. Target audiences are inundated with information, and not all of it is useful in the context of making a purchase decision. Many organizations have already recognized the impending need to shift marketing strategy away from generic communications and toward hyper-personalized engagement engagement that is designed to earn a dialogue and build relationships with prospects. New tactics such as inbound marketing are proving effective because they shift marketing spend away from broadcast messaging to embrace a customer centric approach that fosters relationships grounded in personalized and relevant communications. Content forms the basis of these relationships. But content proliferation is a blessing and a curse. On the one hand, buyers have access to more information. On the other hand, more information makes it easy to become overwhelmed. That makes it extremely difficult for marketers to rise above the noise. It s no longer about segmenting your target audience based on demographic attributes, it s about segmenting the target audience based on demographic attributes AND the buyer s journey and marketing automation is the only tool on the market that can effectively automate multi-channel communications based on the buyer s purchase cycle. Lead scoring and multi-channel capabilities in marketing automation provide just the right tools to solve this challenge.

3 Gleansight: Marketing Automation 3 Part 2: Reasons to Implement What are Reasons to Implement? Reasons to Implement represent the reasons Top Performers invested, or plan to invest, in a technology. These also represent the most common ways to justify the investment. Marketing automaton has moved beyond the early adopter stage. Best estimates suggest that somewhere shy of 20,000 companies are using marketing automation today; that actually represents a tiny subset of the organizations that could benefit from marketing automation. While top reasons to implement still center around performance (revenue, lead quality, and cost reduction), many companies are starting to wake up to the harsh reality that marketing automation is increasingly necessary to maintain competitive parity, especially in industries where prominent competitors have already embraced marketing automation and are raising the bar on customer engagement. Benchmark KPIs Gleanster uses 2-3 key performance indicators (KPIs) to distinguish Top Performers from all other companies ( Everyone Else ) within a given data set, thereby establishing a basis for benchmarking best practices. By definition, Top Performers are comprised of the top quartile of qualified survey respondents (QSRs). The KPIs used for distinguishing Top Performers focus on performance metrics that speak to year-over-year improvement in relevant, measurable areas. Not all KPIs are weighted equally. The KPIs used for this Gleansight are: Year-over-year increase in revenue Click-through rates on Volume of marketing qualified leads To learn more about Gleanster s research methodology, please click here or research@gleanster.com. Marketing automation is designed to centralize and align disparate technologies that support marketing, web analytics, landing page hosting, and social media engagement, so marketers can build a more comprehensive view of the target audience at the customer level. Marketing automation tools not only allow organizations to divest of disparate marketing technologies, they help aggregate customer data so it is available for business rules that can automate individual communications with prospects and customers based on their propensity to buy. It s simply not possible for marketers to manually deliver the type of relevant and cross-channel communications that can be automated by a marketing automation platform. More importantly, marketing automation helps to bridge the gap between marketing and sales to route leads with a higher propensity to purchase directly to sales. Increase Revenue. Marketers are sometimes stereotyped as more interested in clever advertisements or customer attitudes than in concrete business results. But, in fact, driving revenue is their most important concern. In fact, the most successful Top Performing organizations are 16x more likely than Everyone Else to report that marketeering performance and incentives are directly tied to revenue performance. These days relevance is the gateway to revenue, and marketing automation tools help marketers simplify multi-channel communications with business rules that ultimately push and pull prospects through the buying cycle. Higher quality leads. For quite some time, marketers were myopically focused on generating more leads: More is better. Wrong. It s a good sign to see Top Performers indicating that the number two reason to implement marketing automation is to generate higher quality leads (and, of course, more of them!). Marketing automation uses a process called lead scoring, whereby prospect behavior is tracked and aggregated over time. A score then represents the propensity to purchase and leads can be routed to nurture marketing campaigns or pushed to sales depending on their stage in the buying cycle. That means sales spends less time qualifying opportunities and more time selling to a finite number of high quality opportunities. This also helps distill sales metrics like average

4 Gleansight: Marketing Automation 4 Core Technologies The basic components and core capabilities required for a marketing automation system include: Outbound . Users must be able to create templates to generate personalized s from the system database. They must also be able to import lists from trade shows, print advertising, CRM and other sources. s must contain trackable links to system-generated landing pages. Social media. Users can post content to social media, track social mediagenerated traffic, help recipients share content to their own social media accounts, and monitor social media conversations. More sophisticated features include forms and personalized ads within social platforms, using social sign-on to capture more data, and building more detailed profiles based on activities, consumption, connections and influence. Landing pages and Web forms. Users must be able to create Web forms and landing pages that can capture leads from system-generated s and other sources. Forms are designed to collect prospect information and marry this with cross -channel behavioral response patterns allowing the organization to identify which prospects are ready to talk to sales. These pages are hosted by the marketing automation system and post data directly to the marketing automation database. deal size and the sales cycle for more accurate forecasting and budget allocation because sales personnel are truly focused on the best short-term opportunities. MOST COMPELLING REASONS TO IMPLEMENT MARKETING AUTOMATION* 79% Say: 76% Say: 53% Say: * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers Divest of fragmented marketing technologies. According to Gleanster research, the average organization supports marketing with 3-5 disparate technologies. Those licensing fees often add up quickly, and in some cases the cost of disparate technologies is reason enough to justify an investment in marketing automation. Fragmented marketing technologies pose three major challenges for Top Performers. First, they lead to fragmented customer data that is often difficult to access or not actionable. Second, marketers must learn to operate multiple interfaces. Third, disparate technologies complicate the customer data integration strategy, and often managing and configuring links to CRM places too much of a burden on IT and IT queues. Increase revenue Higher quality leads ** versus 45% of Everyone Else Divest of fragmented marketing technologies Visibility into marketing and sales performance. For Top Performing organizations marketing automation brings increased visibility into marketing spend, by channel. More importantly, marketing automation provides visibility into pipeline performance across marketing and sales. This eliminates the incessant blame game that traditionally plagues marketing and sales leaders You didn t follow up on our leads. Your leads stank. Marketing automation gives senior leaders a better sense of where to optimize performance to maximize revenue and the ability to back into necessary spend in order to meet revenue targets. For marketers, marketing automation helps justify marketing investments by linking them directly to sales; marketers know exactly which channels a prospect engaged, when, and how effective different communication messages were at nurturing prospects to the point where they were ready to engage sales.

5 Gleansight: Marketing Automation 5 Behavior tracking. The system must track the behavior of individual visitors to the company website, typically using a combination of cookies to identify visitors and tracking tags embedded in company web pages. Conventional web analytics captures page and session statistics but does not usually link these to persistent individual identities. Lead scoring. The system calculates one or more scores to measure the quality of a lead, primarily to determine when it should handed to the sales department. Scores are based on the combination of individual attributes (title, company, location, etc.) and behaviors (search terms, responses, Web forms completed, pages viewed, etc.). Scoring formulas can be complex, so special interfaces are needed to make them easy to build, understand, and maintain. Lead nurturing. The system can be configured for automated engagement based on the unique needs of a prospect. In conjunction with lead scoring, communications can adapt based on the prospect readiness to talk with sales. The messages can change in response to lead behaviors such as Web page views and opens. Lead nurturing flows may be simple, linear sequences or can incorporate complex decision rules that send different leads down entirely separate paths. Automate nurture marketing. Top Performers readily accept the fact that marketing automation will demand a more intimate approach to content creation. In truth, marketing automation can do little to mitigate the challenges around content creation. But marketing automation can help with pushing content out through multiple channels, particularly digital channels. Inbound marketing uses content like bait to attract leads through a relevant and personalized message and educate them to action. The campaign configuration features in marketing automation allow marketers to push content out to multiple channels to both engage existing prospect lists and find new leads through landing page form capture. Marketing automation also makes behavioral triggers more accessible to marketers. That means marketing communications can be triggered based on prospect behavior (a click on a link, a form fill, or a webpage visit). Increase the quantity of leads. Lead quantity was rarely selected as a top reason to implement marketing automation by Top Performers. However, marketers that did select this option overwhelming chose it along with the need to increase revenue and the need to isolate higher quality leads. A larger volume of higher quality leads is of course the ideal situation for any Top Performing organization. Lower marketing costs. Marketing budgets are under continuous pressure. Few marketers would buy an automation system specifically so they can spend less, but many want a system that helps them to understand their spending and eliminate pockets of waste. This is especially true at less mature marketing organizations, where existing systems may not provide adequate cost management. Outside of cost reduction, marketing automation can also help eliminate spend in areas that do not generate sufficient returns. Top COMPELLING REASONS TO IMPLEMENT MARKETING AUTOMATION* 51% Say: Visibility into marketing and sales performance CRM integration. The marketing automation system maintains its own lead database, but exchanges updates with CRM so both systems have consistent information. Integration may also extend to coordinating campaigns between the two systems and sending alerts to sales people about behaviors captured by marketing automation. 45% Say: 44% Say: Automate nurture marketing Increase the quantity of leads ** versus 77% of Everyone Else * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers

6 Gleansight: Marketing Automation 6 Reporting. The systems provide information on messages sent, responses received, and profiles of the lead database. Many also import sales results from the CRM system and use these to for Return on Investment calculations. Some vendors go further to provide reports tracking leads through stages in the combined marketing and sales revenue cycle from initial acquisition through closed deals. Performers indicate they use marketing automation to benchmark performance and continuously optimize marketing spend to get the biggest bang for the buck. Competitive pressures. Top Performers indicated that the need to maintain competitive parity was of lesser importance when justifying an investment in marketing automation. That s a good sign, because Top Performers recognize that marketing automation demands a sea change in the traditional marketing and sales approach. Just because a competitor has raised the bar doesn t mean an investment in technology will solve the challenge. If you accelerate poor processes or mediocre communication strategies with marketing automation, you accelerate mediocre results. That doesn t make the need to step up exceed customer expectations any less important, especially if competitors are making it difficult. But it should be done for the right reasons and with sufficient commitment to all components of change: people, process, and technology. Better alignment with sales. Because closer integration between marketing and sales is a growing necessity, both departments are looking for ways to achieve it. Most sales departments already have basic operating systems in place to distribute, track, and manage leads and customer contacts. Marketing automation provides a corresponding infrastructure for the marketing department, so the two organizations can easily exchange information and coordinate activities without huge amounts of manual effort. In fact, deployment can be the catalyst for alignment efforts that both groups have long recognized were essential but never quite found time to begin. LEAST COMPELLING REASONS TO IMPLEMENT MARKETING AUTOMATION* 36% Say: Lower marketing costs 28% Say: Competitive pressures 21% Say: Better alignment with sales * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers

7 Gleansight: Marketing Automation 7 Part 3: Value Drivers What are Value Drivers? Value Drivers represent the processes, organizational considerations, and tactics that help Top Performers maximize the return on investment in a technology initiative. These are the things Top Performers would attribute to the successful implementation and use of a technology. Despite increased adoption, research shows that marketers continue to struggle with embracing marketing automaton the way it was initially designed to be used. Top Performers were 9x more likely to customize lead scoring capabilities in marketing automation. In fact, 90% of respondents (including Top Performers) report regular and periodic use of marketing automation for large-volume campaigns. It seems old habits die hard. The survey revealed that Top Performers rank ease of use of the system as the single most important element for extracting value from marketing automation. This comes as no surprise since vendor usage statistics revealed 7 out of 10 organizations had tried multiple marketing automation tools. Clearly organizations see value, but for whatever reason cost, usability, or features there is very little loyalty among providers. Unfortunately, the levers that impact a return on investment have less to do with the technology and more to do with organizational alignment, process improvement, and content creation. Top Performers tend to leverage the full breadth of features in marketing automation tools. For example, 68% of Top Performers (compared with 23% of Everyone Else) had pre-configured cross-channel campaigns that used customer behavior data to trigger campaign communications. Interviews with some of these Top Performing organization revealed it took months or years after implementation before marketers embraced customized lead scoring, dynamic segments, and trigger-based rules. It s important not to fall into the what we are comfortable with trap after investing in marketing automation. Push your organization to embrace the full breadth of the tools early, as this will generate a faster return on investment. A crazy concept: Use the tools the way they were built to be used to maximize the return. Easy to use system. Ease of use as a value driver was the subject of much debate because it s quite subjective. Shockingly, Top Performers ranked tool ease of use as a critical element to successfully achieving a return on investment in marketing automation. Since Top Performers display an affinity toward process re-engineering, change management, use of lead scoring, and multi-channel campaign execution, it stands to reason that the tools must strike the right balance between features, functions, and usability to take full advantage of these best practices. That makes marketing automation investments akin to purchasing a new vehicle: You look for the features and functions you need, then the nice-to-haves, and then a style and color that matches your own personal preferences. When selecting a marketing automation solution it s a good idea to elicit feedback from the users who will physically be configuring campaigns on a day-to-day basis. Ask solution providers for a demo or even a trial period prior to making the investment.

8 Gleansight: Marketing Automation 8 MOST IMPORTANT VALUE DRIVERS FOR MARKETING AUTOMATION* Destination... MAX ROI! 100% 50% 92% Easy to use system 87% Re-usable campaign templates 77% Cooperation with sales * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers Re-usable campaign templates. Top Performers tend to rely on a handful of campaign templates (the flow across different channels, timing, etc.) that are repurposed with new content and refreshed on a periodic basis (think semi-annually). One of the biggest mistakes organizations make with marketing automation is custom configuring every different campaign that is delivered. You don t need dozens and dozens of campaign flows. This dramatically complicates measurement and execution. It also makes it difficult to switch providers should the need arise. Top Performers have found that the consistency of the layout and the general creative look and feel impacts conversion, especially when prospects may stumble across a variety of personalized campaigns based on their specific stage in the purchase cycle. Some consistency reinforces the brand, particularly across different channels. Cooperation with sales. Cooperating with sales means jointly agreeing on the types of customers to pursue, defining lead scoring rules and processes to pass leads from marketing to sales, and designing marketing messages for active prospects and current customers. These are all in addition to developing traditional sales materials such as price sheets and product brochures. Marketing and sales should also commit to regularly meeting to validate the shared definition of a qualified lead. Marketing automation is about removing the guesswork in lead qualification. But this requires an iterative process of continuous optimization. As long as sales is transparent about its needs, marketers can develop materials that truly help to educate and pre-qualify new leads before they reach sales. Theoretically, marketing automation should eliminate any dispute on lead value. You will know exactly where the bottlenecks are. You may not have the resources to address all of them, but that s a different conversation. At least you know where to focus the effort.

9 Gleansight: Marketing Automation 9 Marketing performance tied to sales. Top Performers are 6x more likely than Everyone Else to tie marketing performance and management by objectives directly to revenue. This may not be possible right out of the gate, but organizations should have a line of sight to using marketing automation as a window into marketing and sales performance. Diligent tracking of costs and channel attribution (which can be accomplished manually, through fuzzy logic, or using linear models in many marketing automation tools) gives marketers data points about how closed won opportunities engaged with marketing prior to talking to sales. Executive alignment. Top Performers almost always have an executive-level champion for marketing automation. This is critical because the real work starts after the decision to implement marketing automation is made. A marketing automation initiative needs organizational support, including strong and public commitment by top management, adequate staffing of the project team, and cooperation from workers whose jobs will be affected. Most organizations can only support a few large initiatives at any one time, so it s important to ensure that marketing automation will be given adequate priority before committing to a major change. Otherwise, it may still be possible to deploy marketing automation as a simple replacement for existing systems. This will at least get the system in place so the company can phase in the more advanced applications over time. Change management. Marketing automation initiatives involve substantial changes to processes within the marketing department and between marketing and sales. These changes must first be analyzed and planned to ensure they will achieve the desired results. Then implementation must be managed carefully to ensure that operations continue smoothly as they are introduced. Even after IMPORTANT VALUE DRIVERS FOR MARKETING AUTOMATION* Destination... MAX ROI! 100% 50% 72% Marketing performance tied to sales 65% Executive alignment 59% Change management * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers

10 Gleansight: Marketing Automation 10 implementation, follow-up is needed to ensure that the company does not lapse back into old habits and that new employees are trained correctly. The ability to plan, deploy, and maintain process changes is a specialized skill that must itself be acquired by the organization, either through staff training or use of outside resources. Cross-channel campaign execution. Today s buyers communicate across many different channels direct mail, , Web, social, telephone, mobile, etc. Cross-channel campaigns may present the same message in a recipient s channel of choice, or may present different messages in different channels over time. Either type of coordination is extremely difficult when each channel is managed through a separate system. It s important to note the difference between multi-channel and cross-channel. Cross-channel orchestrates communications across many channels delivering a consistent customer experience and reinforcing the message. It s much easier to execute and manage cross-channel campaigns from within a centralized platform like marketing automation. Analytical culture (fact-based decisions). The difficulty of measuring marketing results has often forced marketers to make decisions with little hard evidence. Marketing automation makes sound measurements more available, at least to marketers who are willing to seek them. An organization that is committed to fact-based decisions is more likely to invest in marketing measurements and to use measurements to guide future marketing activity. These measurements will help to ensure that the possibilities made available by marketing automation are converted into actual benefits. Help from outside resources (agencies, consultants). Marketing automation requires new skills in program design and measurement that extend well beyond learning to operate the system itself. These skills are often LEAST IMPORTANT VALUE DRIVERS FOR MARKETING AUTOMATION* Destination... MAX ROI! 100% 50% 53% Cross-channel campaign execution 32% Analytical culture (fact-based decisions) 27% Help from outside resources (agencies, consultants) * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers

11 Gleansight: Marketing Automation 11 not available in-house, especially at less mature marketing organizations. Some skills may be needed for a limited time, may be highly specialized, or may be hard to learn. In those cases, it may make sense to partner with consultants or marketing agencies. This sort of assistance can speed the initial marketing automation deployment and significantly increase the chances for success. Once the company has completed its initial deployment, it will be in a better position to judge which skills it should add to its own staff and which should remain with external providers.

12 Gleansight: Marketing Automation 12 Challenges Challenges represent the various roadblocks to watch out for before, during and after a technology implementation. These are the things that prevent Top Performers from maximizing the return on technology investments. Part 4: Challenges The best-laid plans for marketing automation will still face obstacles. These are less likely to be technical than organizational. Lack of funding, staff skills, and management support are all concerns. But the most immediate impact comes from operational issues, including poor marketing processes, problems with data quality and integration, and inability to create enough good content. These must be resolved in advance or the project cannot proceed. Metrics pose a different challenge: The system can be deployed without them, but they re needed to measure success. Otherwise, the company won t know which marketing projects are most valuable or whether the system itself is worth its cost. This puts it at risk when budgets are tight and management is looking for ways to cut expenses. However, real business value requires more than getting the software to run. Companies must set realistic goals for their project and measure progress toward those goals. They need to train staff to use the systems, to design new marketing programs that take advantage of system capabilities, and to populate those programs with effective marketing content. They need to assess and improve data quality, both by fixing internal processes and by purchasing external information. Perhaps most critical, they must coordinate with the sales department to ensure the programs are delivering valuable leads and that those leads will be handled effectively when sales receives them. Creating enough content at a reasonable cost. Top Performers recognize content creation as the single biggest hurdle to overcome when adopting marketing automation. Here s the thing: It can t be avoided. The minute a competitor starts developing relevant targeted content that is gaining exposure to your target audience, you have a problem. There are, however, lots of ways to develop content on the cheap. In fact, 75% of Top Performers report using blog posts in lead nurturing and drip marketing campaigns. The most important consideration with respect to content is to make it valuable and develop it with the goal of becoming a trusted advisor to the prospect. The days of the hard sale and the promotional white paper are long gone. Brand promotion in white papers still has a place in the lead lifecycle, but they are generally much later when prospects are educated and ready to talk to sales. The most valuable content you can create will be front-of-the-funnel inbound content. Use content like bait to attract the right type of leads to your marketing automation engagement strategy. To keep costs within reason, companies should develop a library of materials they can reuse across programs. This can be based on a matrix that lists different buyer types and stages in the purchase process. Materials can be developed for each buyer type at each purchase stage, and then used in all programs targeted at that. Data quality and integration. Data quality is often an unexpected stumbling block to successful marketing

13 Gleansight: Marketing Automation 13 MOST CHALLENGING ASPECTS OF MARKETING AUTOMATION* 100% 50% 97% 85% 84% Creating enough content at a reasonable cost Data quality and integration Poor marketing processes * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers automation deployments. Many sales automation systems contain duplicate and obsolete records that salespeople can simply ignore, but will pollute the database if they are imported blindly back into marketing automation. In addition, many marketing automation providers tier pricing based on the number of active users. The industry has also significantly cracked down on data uploads. Most providers will not accept purchased lists or lists that were generated without the use of an opt-in clause. An early, thorough assessment of existing data is an important task in any implementation process. The result should be carefully planned rules for deduplication, field-level updates, and use of external services to clean and enhance marketing records. In addition, you ll need to design any custom fields or tables that will extend the standard data models. Poor marketing processes. Garbage in, garbage out. Marketing departments can survive poor processes when channels and programs are disconnected, but coordination requires predictability and more complex programs require greater efficiency. Companies with poor marketing processes need to first document the existing processes and develop effective ways to change them as needed. Help may be available from manufacturing, finance, or other departments with long experience in process management. If those skills are not accessible in-house, marketers can draw on outside specialists in marketing operations management. Rethinking legacy processes. It s a good rule of thumb not to try to automate complex processes in a new system. If you are finding loads of custom fields and unique processes are necessary to execute campaigns, then consider simplifying these legacy practices by looking at the real business value derived from more complex processes. Top Performers often found that the incremental value of customization wasn t worth the investment in time and resources. Don t assume that just because that s the way it has always been done that it should be that way in the future. Marketing automation investments are

14 Gleansight: Marketing Automation 14 CHALLENGING ASPECTS OF MARKETING AUTOMATION* 100% 50% 75% 73% 62% Rethinking legacy processes Lack of skilled staff Lack of funding * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers a great excuse to completely rethink what works and doesn t work for your organization. Lack of skilled staff. Marketing automation requires a range of new staff skills. These go beyond running the system itself to include designing new types of marketing programs, developing appropriate content, creating new business processes, building lead scores, coordinating between marketing and sales, and measuring results. Rather than attempting to acquire all these new skills at once, companies can rely on outside resources to help set up initial programs. This setup should include training so that company employees will be able to do the work for themselves in the future. The most popular providers have communities of power users, but they can be expensive to onboard. An increasingly popular option is a managed service approach whereby an agency or service provider will host and manage the marketing automation tool, and some can even take on campaign execution. Lack of funding. The landscape for marketing automation is in a state of constant evolution. Barriers to entry are generally fairly low, so new class disruptors are constantly popping up to challenge industry leaders on pricing, features, and usability. In general, companies complain about pricing and cost when the tool is perceived to be lacking a return on investment and that s usually because the company failed to change processes or struggles with resource limitations. However, cost is not just a function of the tool itself. Top Performers are quick to point out that there are real costs to developing sufficient content, hiring resources to manage campaigns, and data quality. Divesting of legacy systems. Marketers are generally resistant to change. Replacing existing tools will likely require some degree of change management diligence. It s a good idea to plan a phased approach to fully divesting of legacy systems. Often that means setting hard date when legacy systems will no longer be available. It helps if this date coincides with a real, tangible business fact we are not paying for licensing anymore so the system will be gone, IT is moving the

15 Gleansight: Marketing Automation 15 LEAST CHALLENGING ASPECTS OF MARKETING AUTOMATION* 100% 50% 55% 52% 40% Divesting of legacy systems Selecting metrics Senior management mindset * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers data and turning this system off, etc. Leave a buffer period for marketers to test the new system and ensure customer data was ported appropriately. It s hard to avoid all of the pain associated with divesting of systems that have been customized or are deeply engrained in legacy process, but it can be mitigated through planning and strict milestone dates. Selecting metrics. It s easy to create metrics from the wealth of data provided by marketing automation. The challenge is deciding which metrics are most important. Marketers should recognize that they need different metrics for different stages of the lead lifecycle. Then there are a variety of metrics in broad categories including activity metrics such as number of s sent; response metrics such as Web traffic; efficiency metrics such as cost per lead; and value metrics such as revenue generated. Remember that metrics reflect your business priorities, so they should evolve as priorities change over time. Senior management mindset. Most marketing automation projects will rely on senior managers to help secure the necessary resources and push for needed changes. If senior managers don t support the project, find out why: Do they not understand the concept, do they not believe it will work, or do they simply not trust marketing? Address their concerns and gain support. Or limit the initial deployment to a small scope where help from other departments is less essential.

16 Gleansight: Marketing Automation 16 Part 5: Performance Metrics Performance Metrics These represent the most common metrics Top Performers use to physically measure the success of a technology initiative before and/or after the implementation. Marketing automation is about creating marketing value. But marketing value can t always be measured directly because the results are affected by sales performance, competitive behavior, business conditions, and any number of other factors outside of marketing s control. This leaves marketers with a choice of imperfect measures, such as estimates of marketing-influenced revenue, cost per lead, and promotion response rates. Most firms use a judicious mix of these, supplemented with tactical measures to track the results of specific projects, and with lifecycle measures that trace movement of customers through stages in the buying process. All must be presented so they effectively communicate the desired information. Keys to achieving this include providing context, such as comparisons to previous results and to plans, highlighting significant variances, visualization to illustrate important relationships, and filters to show each viewer information relevant to his or her particular role. MOST COMMON METRICS FOR MEASURING MARKETING AUTOMATION ROI* 84% 77% 71% Number of qualified leads generated Cost per lead Conversion rate (from inquiries to leads) on marketing-sourced leads * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers Number of qualified leads generated. Marketers consider lead generation their primary task, so the number of leads generated is clearly a primary metric. Since unqualified leads are a drain on company resources, it makes more sense to focus on the number of qualified leads rather than the actual total. If leads are turned over to sales once they are deemed qualified, this figure also reflects an important stage in the purchase cycle and can be used in cycle analysis. Marketing leads can be classified as Marketing Qualified, which signals the lead is ready to be passed to sales, and Sales Accepted, which forces sales to acknowledge that the lead meets certain criteria. These gates help drive accountability around the flow of leads from marketing to sales. Cost per lead. Marketers must balance

17 Gleansight: Marketing Automation 17 COMMON METRICS FOR MEASURING MARKETING AUTOMATION ROI* 69% 52% 48% Close rate on marketing-sourced leads Marketing-sourced deals as share of pipeline Response rates * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers lead cost against lead quality and quantity. Thus, these values should be reported together to give a clear picture of marketing effectiveness. Cost per lead is fairly easy to calculate once a marketing automation system is in place to track costs and results. However, it applies only to acquisition programs. Projects that aim to nurture existing leads and to improve results from existing customers require other metrics. Conversion rate (from inquiries to leads) on marketing-sourced leads. A lifecycle approach to customer management tracks the movement of leads through stages, from initial inquiries through final purchase. The inquiry-to-lead conversion rate measures one of these transitions. It can be interpreted to show marketing s effectiveness in producing this transition, although factors outside of marketing may also influence the results. Top Performers generally report having a solid understanding of the flow of leads across the lead lifecycle. This helps marketing and sales leaders take accountability for bottlenecks and address them early. Close rate on marketing-sourced leads. The percentage of deals that ultimately become closed sales is a common measure of sales performance. The close rate of marketing-sourced leads can be compared with the close rate of leads from other sources to infer the relative quality of the marketing leads. Top performers are much more likely than others to use this and other metrics that connect marketing efforts with sales results. Marketing-sourced deals as share of pipeline. It can take a long time for leads to convert to revenue. Companies seeking a quicker evaluation of marketing contribution can look at the number or percentage of marketingsourced deals in the sales pipeline. This may be reported in terms of deal counts or deal value, and might be further adjusted to account for the estimated probability of the deals being closed. Since deal size and probability are both estimates, these adjustments add considerable subjectivity to this metric. Response rates. Response rates are among the easiest metrics to report and understand. But the significance of any response rate can only be judged

18 Gleansight: Marketing Automation 18 NUMBERS LEAST COMMON METRICS FOR MEASURING MARKETING AUTOMATION ROI* 67 Percentage of Top Performers (compared to 35% of Everyone Else) using lead scoring. Percentage of Top Performers (compared to 6% of Everyone Else) using trigger-based marketing tactics on lead nurturing campaigns % 29% 19% Marketing cost per revenue dollar Incremental revenue from marketing efforts Marketing-sourced revenue * According to Top Performers, based on 151 Qualified Survey Responses to the Q survey on marketing automation. **According to Everyone Else shown only when a notable disparity occurs relative to Top Performers 79 Average percentage of marketing sourced leads in the sales pipeline. 75 Percentage of Top Performers that have been using marketing automation for more than 2 years. Percentage of Top Performers that rank data proliferation as a top 2 challenge for marketing in in the context of past results, offers, audiences, cost, and response quality. This means that response rates are best used within the marketing department to compare results within a particular channel and program. Marketing cost per revenue dollar. The ratio of marketing cost to revenue is a broad measure of marketing efficiency. It seems simple but can be misleading when large amounts of revenue originate outside of marketing or when revenue is earned long after the original marketing costs. This measure is best used by sophisticated organizations with the resources to properly understand its components. Incremental revenue from marketing efforts. The incremental impact of an individual marketing effort is arguably the most important metric of all since it serves as the basis for calculating that effort s true value. Marketers calculate it in many different ways, some more accurate than others. A highly reliable estimate requires formal testing that few marketers have the time, skills, or budget to accomplish. Incremental revenue is especially important in connection with lead nurturing and existing customer programs, which can t be judged on acquisition cost. Marketing-sourced revenue. This is a strategic metric that shows how much revenue originated with marketing-generated leads. Like reports on lead quantity, it must be viewed within the context of related marketing costs and compared with results for previous periods. It is also typically compared with revenue generated from non-marketing sources, such as leads that salespeople find for themselves. For this measure to be useful, marketing and sales must agree on rules to determine which department gets credit for generating which leads. Percentage of All Respondents that were confused about the definition of RPM. 65

19 Gleansight: Marketing Automation 19 Part 6: Success Stories Voices.com is an online marketplace where business connects with professional voice actors and voice-over talent. Radio and television stations, advertising agencies, marketing professionals, casting directors and voice talent agencies rely on Voices.com to easily find, audition and hire narrators and other voice-over talent. Voices.com clients include NBC, ESPN, PBS, The History Channel, The Discovery Channel, Reader s Digest, Audible, Comcast, Bell Canada, Sony Picture, Microsoft, Cisco Systems, ING, Western Union, American Airlines, Ford, GM, Toyota, the US Government and thousands more. Note: The original version of this Success Story may have been prepared and previously published by an enabling solution provider. If so, it is edited and reproduced here by permission. While reasonable efforts have been made to verify the accuracy of the information contained herein through independent fact-checking, Gleanster disclaims liability for any content that was developed and submitted by third parties. Success Stories are selected based solely on the merits of the content as judged by Gleanster s Research Oversight Committee. Vendors are not charged a fee for inclusion and no preference is given to vendors based on their ability to purchase other Gleanster products or services. Any questions or concerns regarding this particular Success Story or Gleanster s selection criteria or policies, in general should be directed to successstories@ gleanster.com. Case studies may be submitted for publishing consideration using the Success Stories Submission Form. The Challenge Voices.com initially turned to marketing automation to manage communications and gain some much needed visibility into performance. is a very large part of our business, said Ben. We had little control over our automated messages. They were also being sent from multiple applications, and the systems didn t talk to each other. We couldn t see who d opened an , clicked through, etc. Managing was a huge issue. Voices had distinct criteria they were looking for when evaluating marketing automation tools. The Solution Voices.com evaluated several systems and used a set of specific criteria to compare and contrast providers. Solutions had to be user friendly, with a short learning curve. They needed to be capable of creating and updating campaigns quickly and easily. The solution would be consolidating all of Voices.com s existing platforms and therefore needed to report open and click-through rates for all campaigns. Finally, Voices.com used Salesforce.com for CRM and wanted a system that could easily create lists and contacts generated by criteria from Salesforce.com. The Results we now have an average open rate of 84% on . With marketing automation we easily set up automated campaigns that push/pull data from Salesforce, said Ben. Being able to send customers the right content at the right time is very important to our strategy. We now have an average 84% open rate and a 40% click through rate, well above the industry standards of 22% and 3.5% respectively. We have a consistent brand message with the templates. Once an s gotten the green light, we send the message, or schedule it to be sent, in a mere few clicks.

20 Gleansight: Marketing Automation 20 Part 7: Vendor Landscape Vendor & Solution Showcases View the Interactive Marketing Automation Vendor Landscape Visit to access vendor and solution showcases for this topic area, where you ll find: Vendor Descriptions Analyst Commentary Related White Papers Videos & Presentations Solution Demos Other Related Research And much more... It s everything you need to make smart technology decisions. All in one place. The last few years marked some very critical milestones for the marketing automation industry. Industry leaders Eloqua and Marketo both filed for initial public offerings, which ultimately helped validate the technology and proved that marketing automation was more than a passing fad. Then much-anticipated consolidation by the big suite players started to take shape. Oracle acquired Eloqua for a whopping $871 million, or 9 times revenue. Salesforce.com acquired Exact Target (which brought with it the former acquisition of Pardot). Microsoft acquired Marketing Pilot and Adobe acquired Neolane. This consolidation brought a new set of dynamics to the marketing automation landscape, and in some respects it opens the door to more questions than answers. Can industry tier-one marketing automation solutions continue to innovate and grow at the same accelerated pace under a broad suite of offerings? Consolidation certainly has its benefits, particularly when it comes to up-selling and cross-selling to existing clients. One thing is for sure: The value of marketing automation is not limited by industry verticals or business model. The future of marketing is all about data-driven rulesbased customer dialogs. While early adopters of the technology were largely B2B organizations with complex sales cycles, Top Performers from a variety of industries are using marketing automation to power relationship marketing, which benefits both B2B and B2C organizations. What largely differentiates a marketing automation solution from, say, an marketing or campaign management tool is the ability to engage customers on two or more channels, lead scoring features, and integration with CRM. For the most part, any viable provider can check these boxes on features like lead scoring and multi-channel campaign delivery. That means the decision making considerations tend to weigh heavily on setup and support, usability, deliverability, and pricing. Today there are largely two classes of marketing automation technology: solutions built with robust functionality that can address the demands of the enterprise and solutions built to address the basic needs of a small-to-midsize organization. Enterprise class solutions tend to be more expensive and generally lock the buyer into a long-term commitment (which is somewhat justifiable because setup and optimization inside the bureaucracy of an enterprise can take longer, which extends the return-on-investment timeline). Enterprise solutions have more robust role-based security features, customizable data fields, single sign-on integration, performance scalability, multiple instances, and sophisticated data integration capabilities. Reporting and campaign management can get quite complex inside of a large enterprise, so enterprise-class tools walk a fine line between robustness of features and ease of use. There are a handful of providers that are more appropriate to address the needs of the enterprise including: Oracle Eloqua, Marketo, Callidus Cloud Leadformix, SalesFusion, Hubspot, Saleforce.com Pardot, and Act-On. For small-to-midsize businesses there are about a dozen different providers that feature all of the basic marketing automation necessities. Last year, integration with social media and web conferencing platforms became a popular add-on in marketing automation tools. Low barriers to entry in the space have led to a flurry of new entrants, even over the last few years. In many cases, new incumbents have very