Understanding the ROI of Marketing Automation ERIC WEBB

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1 Understanding the ROI of Marketing Automation ERIC WEBB

2 Contents What is Marketing Automation?... 4 Could Marketing Automation Benefit Your Company?... 5 Understanding the Real Value of Automation

3 Over the past decade, marketing professionals have seen their field change substantially thanks to advances in technology and the ever-increasing use of social media. Keeping up with marketing tasks in this new environment of constant connection can be extremely difficult. This juggling act might be tough, but it's simply the day-to-day reality for many marketing pros. Marketing automation has emerged as a solution for company leaders who want to focus on generating leads without sacrificing other types of marketing campaigns. For many sales professionals, automation systems provide the best way possible to pare down leads and focus on the prospects most likely to buy. But before you can decide if a marketing automation system is right for your company, you need to know more about automation and its return on investment (ROI). CMOs have been under pressure during the past few years to drive greater effectiveness, increase efficiency and improve overall accountability, moving marketing automation from a nice to have to a must have technology. (Gartner) 3

4 What is Marketing Automation? The business world has been abuzz about marketing automation, but many company leaders are unsure of exactly what automation is and how it can be used in their companies. Some marketing professionals who have a basic understanding of automation have even been reluctant to adopt these systems because they are unsure of how they differ from traditional customer relationship management (CRM) programs. For both business executives and marketing staff, the key to understanding automation lies in looking at the lead generation process. 81% of Best-In-Class companies say their number 1 reason for wanting automated sales platforms is to close sales faster. (Source: Focus Research) Any sales-based business relies on lead generation to identify potential clients. Depending on the type of business you run and the services that you provide, you may generate leads from small, local ad campaigns or from major online campaigns. Marketing automation solutions are designed to support marketing professionals as they create, run and evaluate campaigns. It's important to remember that automation programs are designed to support a company's marketing staff, not replace it. With the use of an automated solution to manage campaigns, marketing professionals free up time to focus on the most productive tasks. Instead of wading through confusing website search data and trying to calculate conversion statistics from social media sites, marketing team members are able to focus on nurturing quality leads. Putting the focus back on actual interaction with potential clients can have major advantages where sales and revenue are concerned. In fact, according to Sirius Decisions, adoption of marketing automation is expected to increase 50% by Companies employing a marketing automation system gain a dramatic tactical advantage over their competitors, accelerating their sales funnel, gaining insight into their performance of marketing operations, and streamlining outdated sales and marketing processes. 4

5 Could Marketing Automation Benefit Your Company? Business executives and marketing pros who want to make changes to a company's marketing and lead generation programs may find themselves focusing more on changing content than on changing processes. While fresh and interesting campaigns will always drive marketing efforts. It s important to realize that significant changes to a marketing program must be made at the process level. After all, not even the most thought-provoking ad campaigns are of any use if marketing staff can't convert or manage leads efficiently. 63% of surveyed marketers indicate that the ability to set measurable objectives for each of their campaigns is the biggest value driver of marketing automation. (Gleanster, 2013 Marketing Automation Benchmark Report) The primary benefit of marketing automation is that it provides for total management of the campaign process. From creating campaigns to evaluating leads to making initial contact with the client, automation programs are designed to support marketing professionals and help them meet their sales goals. At a basic level, automation programs take the guesswork out of marketing by using up-to-the-minute data to help marketing and sales teams make essential customer relationship decisions. The value of a marketing automation program may be clear to marketing staff, but company executives are likely to be more concerned with tangible, measurable evidence that these programs are working. Because switching to marketing automation requires an investment of both capital and human resources, it's essential that business leaders understand how to calculate the ROI of automation. As marketing automation is so new, many business professionals are unsure of how to calculate or understand its ROI. First and foremost, it's important to understand that ROI measures for automation are very similar to ROI measures for traditional, non-automated marketing campaigns. Busy executives don't 5

6 need to learn a new marketing vocabulary or become acquainted with complex calculations in order to understand automation ROI. A basic grasp of how these calculations work for standard marketing campaigns is all that is needed in order to understand how an automation program affects any enterprise. One of the chief benefits of using a marketing automation program is that doing so makes compiling ROI data easier. Instead of fussing over spreadsheets or trying to make sense of profit and loss reports, marketing staff can simply open the automation program and pull up the desired data. In order to calculate ROI, marketing automation suites look at campaign investment, leads generated, sales conversions and average sales values. When looking at these calculations, it's important to remember that an automated campaign doesn't require the same labor investment as a non-automated campaign. Over the course of a year, marketing automation can help redirect hundreds of labor hours to more essential functions. More than simply increasing ROI, automation can also be used as a tool to build strength across an enterprise. Understanding the Real Value of Automation When it comes to understanding the value of marketing automation, it's essential to go beyond looking at ROI. While ROI provides a good measure of the effectiveness of marketing campaigns and processes, it doesn't offer a complete measure of how a new system really impacts a business. If you're struggling to sell marketing automation to company executives or are unsure it makes sense for your business, take time to consider all the benefits of automation. 61% of B2B marketers send all leads directly to sales; however, only 27% of those leads will be qualified. (MarketingSherpa) 6

7 Automation offers total management of revenue performance. Marketing automation programs are designed to look at the whole picture. They don't have the innate human tendency to focus more on some phases of a project than another. These programs are designed to help marketing pros think ahead and anticipate the lifecycle of a campaign. They're also designed to make understanding the relationship between marketing and revenue streams easier. Automation establishes core standards between sales and marketing. Breakdowns between sales and marketing departments can lead to serious revenue losses, especially if a lack of communication is preventing qualified leads from moving through the sales funnel quickly. By establishing common standards and vocabulary, a marketing automation system helps these departments combine their strengths. Automation allows for quick and accurate profiling of consumers and their behavior. Evaluating the quality of leads can take over any marketing professional's life. Perhaps you don't even have time to really evaluate leads anymore. Marketing automation programs compile client data, look at online behavior and help identify the most promising leads. This is one way in which automation redirects labor hours towards a more essential function. In this case, marketers free up time to focus on upcoming campaigns while sales staff wastes less time with low-quality leads. Automation helps direct clients through the sales funnel. A marketing automation program is designed to move leads through the sales funnel by sending appropriate communications to promising leads. The system uses the data it gleans about potential clients in order to provide a totally customized experience. Automation allows for proactive client management without a huge labor investment. Automation provides measurable results at any point in a marketing campaign. The success of a traditional marketing campaign can only be measured once the campaign is over. After all, it's hard to track leads, predict behavior and compile complex statistics while 7

8 running a campaign. Automation programs provide for a minute-by-minute account of how potential clients are interacting with a campaign, which allows for timely campaign adjustments and increased campaign efficacy. Automation improves your ability to predict campaign outcomes. More than anything, automation makes it easier to predict the outcome of a given campaign. Executives can review concise, accurate data at any point in a campaign. This allows finance and marketing professionals to work together to create accurate, growth-minded predictions to sculpt campaigns and foster future success. 8

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