apturing the SM Marketing Automation Opportunity · apturing the SM Marketing Automation Opportunity Project Director: Stephanie Pieruccini, Sr. Research Analyst Senior Advisors:

Capturing the SMB Marketing Automation Opportunity

Project Director: Stephanie Pieruccini, Sr. Research Analyst

Senior Advisors: Kaspar Roos, Associate Director

Barbara Pellow, Group Leader

Bryan Yeager, Associate Director

Megan McCarthy, Market Research Analyst

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Editorial/Proofreading: Mark DiMattei, Corporate Editor

Eve Padula, Corporate Writer

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February 2012 Capturing the SMB Marketing Automation Opportunity

© February 2012, InfoTrends, Inc. www.infotrends.com Page 2

Table of Contents

Executive Summary ............................................................................................................................................. 7

Key Findings .................................................................................................................................................. 14

Recommendations ......................................................................................................................................... 15

Introduction ....................................................................................................................................................... 18

Project Objectives .............................................................................................................................................. 19

Methodology ..................................................................................................................................................... 20

Data Tabulations ........................................................................................................................................... 21

Mean vs. Median ........................................................................................................................................... 21

Project Deliverables ........................................................................................................................................... 22

Survey Respondents Profile .............................................................................................................................. 23

Research Findings ............................................................................................................................................. 27

SMB Defined .................................................................................................................................................. 27

Uncertain, but Optimistic SMB Business Outlook ..................................................................................... 30

Key Business Priorities ................................................................................................................................. 33

Advertising and Marketing Spend ............................................................................................................... 34

Marketing Mix Diversification Accelerates ................................................................................................. 36

Marketing Challenges ................................................................................................................................... 55

Reconciling Inbound and Outbound Marketing ......................................................................................... 58

Media for Awareness and Growth ............................................................................................................... 58

Media Buying and Production ..................................................................................................................... 59

Ordering Media Online ................................................................................................................................. 65

Customer Data Management and Analytics .............................................................................................. 68

Personalization .............................................................................................................................................. 70

Marketing Automation, the Next Big Thing ..................................................................................................... 73

Adoption of Marketing Automation ............................................................................................................ 74

Enabling Sales through Marketing .............................................................................................................. 78

Capturing the SMB ............................................................................................................................................83

Service Provider or Solution: the SMB Choice ............................................................................................83

Automating SMB Marketing: Examples of Solution Packages ................................................................ 84

Learning from the Agencies: the MSP Evolution ....................................................................................... 87

Reaching the SMB Audience ........................................................................................................................ 88



Critical Success Factors ............................................................................................................................... 90

Targeting Key Verticals ..................................................................................................................................... 93

Number of Firms and Employees ................................................................................................................ 93

Marketing Spend ........................................................................................................................................... 94

Mass Marketing Channels ............................................................................................................................ 94

Direct Marketing Channels .......................................................................................................................... 95

Internet Marketing ........................................................................................................................................ 95

Personalization .............................................................................................................................................. 96

Budget Allocations ........................................................................................................................................ 96

External Providers & Solutions .................................................................................................................... 97

InfoTrends’ Vertical Picks ............................................................................................................................. 97

Conclusion......................................................................................................................................................... 98

Appendix A: Brief Industry Profiles ................................................................................................................. 99

Accommodations ........................................................................................................................................... 99

Construction ................................................................................................................................................ 103

Education ..................................................................................................................................................... 107

Food Services ............................................................................................................................................... 110

Financial Services & Insurance .................................................................................................................. 114

Healthcare .................................................................................................................................................... 117

Manufacturing .............................................................................................................................................121

Non-Profits .................................................................................................................................................. 125

Professional Services ................................................................................................................................... 129

Personal Services ......................................................................................................................................... 133

Real Estate ................................................................................................................................................... 136

Retail Trade ................................................................................................................................................. 140

Wholesale Trade .......................................................................................................................................... 144

Appendix B – Marketing Automation Technology Overview ....................................................................... 147



List of Tables Table 1: Business Types ..................................................................................................................................... 25

Table 2: SMB Segments by Number of Employees ......................................................................................... 27

Table 3: Number of Firms and Employment Size, by Industry ...................................................................... 93

Table 4: Marketing Spend, by Industry ............................................................................................................ 94

Table 5: Mass Marketing Channels, by Industry ............................................................................................. 94

Table 6: Direct Marketing Channels, by Industry ........................................................................................... 95

Table 7: Internet Marketing, by Industry ......................................................................................................... 95

Table 8: Marketing Budget Allocations, by Industry ....................................................................................... 96

Table 9: Use of External Providers or Solutions, by Industry ......................................................................... 97

Table 10: InfoTrends Vertical Review .............................................................................................................. 97

List of Figures Figure 1: Number of Employees ....................................................................................................................... 23

Figure 2: Company Size by Industry ................................................................................................................ 24

Figure 3: Major Industry Mix ........................................................................................................................... 25

Figure 4: Total Number of Firms, 1998 to 2008 ............................................................................................. 29

Figure 5: SMB Industries by Number of Employees ...................................................................................... 30

Figure 6: Small Business Actual and Expected Sales, 1986 to 2011 ............................................................... 31

Figure 7: Optimistic Revenue Outlook for 2012 .............................................................................................. 32

Figure 8: Small Business Optimism Index, 1986 to 2011 ................................................................................ 32

Figure 9: Top Business Priorities – Next 12 Months ....................................................................................... 33

Figure 10: Mean Marketing Spend 2009 vs. 2011 ........................................................................................... 34

Figure 11: Mean Marketing/Advertising Spend, by Vertical ........................................................................... 35

Figure 12: Marketing/Advertising Spend Change in 2012 .............................................................................. 36

Figure 13: Marketing Budget Allocations ......................................................................................................... 37

Figure 14: Use of Mass and Direct Marketing for Business Promotion .........................................................38

Figure 15: Use of e-mail for Marketing, by Vertical ......................................................................................... 39



Figure 16: Use of Direct Mail for Marketing, by Vertical ............................................................................... 40

Figure 17: Percentage of Marketing Materials Printed in Full-color .............................................................. 43

Figure 18: Agreement with Increase in Color Print Volume ........................................................................... 43

Figure 19: Use of Wireless/Mobile for Marketing, by Vertical ....................................................................... 45

Figure 20: Familiarity with Mobile Barcode Technologies ............................................................................. 46

Figure 21: Use of Digital Marketing Channels ................................................................................................. 49

Figure 22: Digital Marketing Channels; 2009 vs. 2011 ................................................................................... 50

Figure 23: Use of Social Media for Marketing, by Vertical ............................................................................. 53

Figure 24: Social Media Network Presence versus Advertising ...................................................................... 55

Figure 25: SMBs Face a Resource Struggle ...................................................................................................... 56

Figure 26: Top Challenges when Marketing to Existing Customers .............................................................. 57

Figure 27: Media Responsible for Business Awareness and Customer Acquisition ...................................... 59

Figure 28: Types of Service Providers Used – Last 12 Months ...................................................................... 60

Figure 29: Average Number of Service Providers Used – Last 12 Months .................................................... 62

Figure 30: Print Media Production .................................................................................................................. 63

Figure 31: Digital Media Production ................................................................................................................ 64

Figure 32: Use of Creative and Layout Software ............................................................................................. 65

Figure 33: Percentage of Total Print Volume Ordered Online – Last 12 Months, by Vertical ...................... 66

Figure 34: Service Providers Used for Internet Print Order – Top 15 ............................................................ 66

Figure 35: Service Providers Used for Ordering Digital Marketing – Top 15 ................................................ 67

Figure 36: Reasons for Not Ordering Print Online ........................................................................................ 68

Figure 37: Brand of CRM Ownership ............................................................................................................... 69

Figure 38: Type of Information Stored in Customer Database(s) or CRM .................................................... 70

Figure 39: Percentage of Promotional Materials that are Personalized ......................................................... 71

Figure 40: Top Reasons for NOT Using More Personalization ...................................................................... 72

Figure 41: Use of Marketing Automation Solution .......................................................................................... 75

Figure 42: Marketing Automation Solution Provided by Franchisor ............................................................. 76

Figure 43: Marketing Automation Brings Understanding .............................................................................. 77



Figure 44: Top Marketing Automation Providers Used .................................................................................. 78

Figure 45: Marketo’s Integration with salesforce.com .................................................................................... 79

Figure 46: Use of Marketing Automation Solution Features ......................................................................... 80

Figure 47: Reasons for NOT Investing in a Marketing Automation Solution ................................................ 81

Figure 48: Motivating Reasons to Invest in Marketing Automation ..............................................................82

Figure 49: Preference for Managing Marketing across Multiple Channels ...................................................83

Figure 50: SMB Approach to Software-as-a-Service ...................................................................................... 84

Figure 51: Genius’ Marketing Automation Package Options .......................................................................... 85

Figure 52: Hubspot’s Package Options ........................................................................................................... 86

Figure 53: Vertical Response’s e-mail Marketing Plans ................................................................................. 86

Figure 54: Vertical Response’s Add-on Options .............................................................................................. 87

Figure 55: PSP to MSP to Agency; an Evolution ............................................................................................. 88

Figure 56: How SMBs Find Online Service and Marketing Automation Providers ..................................... 89

Figure 57: SMB Preference for Being Marketed To ........................................................................................ 90

Table 8: Personalization, by Industry .............................................................................................................. 96

Figure 58: Number of Accommodations (Hospitality) Firms by Company Size ......................................... 100

Figure 59: Number of Construction Firms by Company Size ....................................................................... 104

Figure 60: Number of Education Firms by Company Size ........................................................................... 108

Figure 61: Number of Food Services Firms by Company Size ....................................................................... 111

Figure 62: Number of Finance & Insurance Firms by Company Size .......................................................... 114

Figure 63: Number of Healthcare Firms by Company Size .......................................................................... 118

Figure 64: Number of Manufacturing Firms by Company Size .................................................................... 122

Figure 65: Number of Non-Profit Organizations by Type ............................................................................. 126

Figure 66: Number of Professional Services Firms by Company Size.......................................................... 130

Figure 67: Number of Personal Services Firms by Company Size ................................................................ 133

Figure 68: Number of Real Estate Firms by Company Size .......................................................................... 137

Figure 69: Number of Retail Firms by Company Size ................................................................................... 141

Figure 70: Number of Wholesale Firms by Company Size............................................................................ 145

Documents

apturing the SM Marketing Automation Opportunity · apturing the SM Marketing Automation Opportunity Project Director: Stephanie Pieruccini, Sr. Research Analyst Senior Advisors: