February 015 Deep Dive0ca36445185fb449d582-f6ffa6baf5dd4144ff990b4132ba0c4d.r41.cf1... · • 95% of organizations use email as a primary channel for communicating with ... efforts

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February 2015

About the Pie Chart

The data presented in the pie chart is derived from the Q4 2014 B2B Marketing Survey (n=769) and serves as the basis for this Deep Dive, which provides analyst commentary related to a particular aspect of the topic. The objective is to provide additional perspective and illuminate certain key considerations regarding the implementation of the related technology-enabled business initiative.

Additional survey data used:

• Q4 2014 Inbound Marketing (n= 226)

• Q3 2014 Marketing Automation (n=359)

• Q2 2014 SMB CRM (n=257)

To learn more about Gleanster’s research methodology, please click here or email [email protected].

This report is made available compliments of:

For more information on Pardot, a Salesforce.com company, click here.

Deep Dive

10 Research Stats to Support a Case for Marketing Automation in Small and Midsize Companies

ANCHORING STAT

PERCENTAGE OF TOP PERFORMING

68%

small businesses (with 10-500 employees) that currently use marketing automation (versus just 9% of all other small businesses who report the same.)

Executive SummaryOverthelastfiveyearsthemarketsawdouble-digitgrowthinadoptionofmarketingautomationbymid-to-largeB2Bfirms.Todayalmost8outof10largeenterpriseB2Bfirmsusemarketingautomationsolutions,and growth in revenue and customer onboarding continues to validate marketing automation as a critical enabler for powering future customer experiences. But adoption of marketing automation among small and midsize companies tells a slightly different story. While still growing at double-digit year-over-year adoption rates, today an estimated 20-30k (out of 21M) small businesses have invested in marketing automation. Formanysmallandmidsizeorganizations(definedinthisreportasbusinesses with 10-500 employees), marketing automation certainly raised some eyebrows over the years amid continued validation from mid-to-large companies. But from an adoption standpoint small businesses have been notoriously cautious about embracing marketing automation. Let’s be honest: there are enough frameworks, best practices, and new marketing tactics to learn about to make your head spin. Relative to existing platforms like email marketing or CRM, marketing automation solutions are also perceived as more expensive. So what kind of role can marketing automation play in small businesses?

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10 Research Stats to Support a Case for Marketing Automation in Small and Midsize Companies 2


Top Performers Defined

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 to distinguish Top Performers in this Deep Dive include:

• Filter: 50-500 Employees

• Revenue growth

Forget Features for a MomentIt’s important to really understand the business value behind marketing automation. This isn’t a conversation about redundant technologies or new features. Any software infrastructure a business (large or small) chooses to invest in will only be valuable if it solves a business challenge and delivers a

tangible return on investment more efficientlyoreffectivelythanalternativeinvestments. Successful small business owners know all too well that the investments they make in technology need to take it a step farther and allow them to accomplish more with less. They need technology solutions that provide leverage, because not every business has aspirations to grow to the size of Apple or Google. It’s therefore

Key Takeaways:

• Top Performing Small Businesses are 7 times more likely than the average small business to have invested in marketing automation.

• 95% of organizations use email as a primary channel for communicating with prospects and customers, and 75% believe email is the most cost effective option for personalizing communications and measuring effectiveness. Email marketing is just as compelling today as it was 30 years ago. What is changing is the nature of the engagement over email. By tracking prospect behavior in other channels (in marketing automation), marketers can trigger the right message at the right time via email engagement.

• Top Performing Small Businesses are notorious for reporting improvements to lead quality and pipeline growth within 6 months after an investment in marketing automation, while mid-to-large organizations report an average of12-18months.Don’tbefooledbytheperceptionthatit’seasierformid-to-large businesses just because they have more budget or resources.

• Top Performing Small Businesses are 15 times more likely than Average Small Businesses to measure metrics that translate to engagement or sales: response rates, conversion to sales accepted leads, sales, opt-in list growth, and up-sell revenue from customers. Contrast this with Average firms,92%ofwhichindicatethatthetopmetricformarketingsuccesswasthe volume of inquires generated by marketing on a periodic basis.

ThisDeepDivewillexplorethevalueofmarketingautomationsolutionsspecificallyforsmallandmidsizebusinesses.Wewillshareempiricaldatafrom1,089smallbusiness survey respondents with fewer than 500 employees (from 2013-2014) andmakepracticalrecommendationsabouttheexpectedbenefitsofmarketingautomation in small and midsize businesses. If you’ve ever wondered whether now is the right time to make an investment, we will inform that decision with data from the most successful small businesses, which we will call Top Performing SmallBusinesses–definedasthetop25%ofcompaniesthatrealizedthehighest self-reported growth in year-over-year revenue. We use this cut of the data to explore what the most successful small businesses do differently and how/whether they embrace emerging technologies like marketing automation.




no surprise that small businesses are a bit cautious about whether marketing automation is necessary.

For this reason, it is critical to ground the conversation with the issues facing EVERY business in 2015 – your buyer evolved, but your legacy fragmented investments in marketing and sales technology were never designed to deal with the complexity of today’s B2B sales cycles. Buyers are connected and informed across a litany of online and offlinechannels,andtheyhavebeenconditioned to demand relevance for share of wallet. Just a decade ago a generic email campaign to an internal list would garner 2-3% conversion; today8outof10B2Bmarketersreportgeneric email communications generate less than 1% conversion. The reality that all businesses are now facing is that the technologies and tactics that drove top-line growth a decade ago are now approaching diminishing returns:

• Generic mass email communications fatigue buyers.

• Delivering the right message at the right time to the right buyer cannot be done manually, so repetitive communications and processes become a bottleneck for marketing.

• Excessive reliance on one or two channels may not address buyer preferences and needs.

• Fragmented technology investments create data silos and no cadence in the customer lifecycle.

• Disconnected marketing and sales processes cause business leaders to turn on each other rather than focusing on the issue at hand. The goalisprofit,butmetricsforsuccessdon’t translate – lead volume, number of inquiries, etc.

• Sales spends excessive time qualifying and creating opportunities when they should be focused on selling to leads with the highest propensity to close.

• Marketing allocates budget anecdotally and lacks visibility into which channels produce the highest quality leads.

Every company, large and small, needs to deal with these challenging issues to drive top-line growth and market share. The question is, what options are available for companies to mitigate the current selling environment? Are these the same options for small businesses as they are for large enterprise?

How Small Businesses Benefit from Marketing AutomationMarketing automation replaces fragmented tools and provides a cohesive platform to manage customer engagement and lead prioritization between marketing and sales. Marketing automation is in fact the only way to holistically apply business rules using aggregated multi-channel customer behavior as triggers for ancillary communications across online or offlinechannels.Thisallowsmarketersto deliver relevant communications based on the buyer’s needs and stage in the sales cycle. The fact is, a solo investment in CRM cannot produce the same results as marketing automation. Fragmented investments in email marketing, web analytics, landing page hosting, and social media will also fail to align marketing success with sales efforts if they lack lead scoring, grading, and CRM integration. Lead scoring capabilities in marketing automation are actually a critical differentiator to alternative technology options like stand-alone email marketing or simply

Remember

What’s it take to be a Top Performer? Top Performers were identified by isolating small business (10-500 employees) survey participants that achieved the top 25% highest self-reported year-over-year revenue growth. We use the aggregate survey trends from these firms to isolate what they do differently to realize their success.




a CRM system. Lead scoring provides a systematic way of tracking prospect engagement and automatically delivers leads with the highest propensity to purchase directly to CRM, where sales repscanfocusfinitetimeonthehighestvalue leads. Marketing automation is also one of the only solutions on the markettoallowuserstoconfigureautomated sales alerts and prioritized leads within CRM (the sales rep system of record) so business owners and sales resources have the best chance of engaging buyers with the right message, when the buyer is most receptive to outreach.

Marketing Automation versus Email Marketing versus CRMThe most common reasons small businesses indicate that they have not invested in marketing automation is the expense (90%) and the resource demands(82%)anticipatedfromusingthe solution. It’s very easy to miss the forest for the trees when evaluating investment options. But in order for small businesses to meet the needs of buyers they will literally have to divest of legacy tactics (including the time, effort, and money that goes into supporting them) and replace them with new tactics. As a result, it’s probably better to think about marketing automation as a replacement for technology and marketing tactics that aren’t producing optimal results for the business.

Interestingly, Top Performing small businesses that use marketing automation do not report a need to hire additional talent or devote dedicated resources to marketing automation. The reason for this is simple: Top Performers literally stop supporting outbound-only legacy tactics that fail to produce results and switch to a combination of inbound and outbound campaigns. For example,

Top Performers are 5 times less likely than the average small business to continue sending large volume email campaigns after investing in marketing automation. That means the time that marketing resources or business owners werepreviouslyspendingonconfiguringthe campaign of the day/week/month was shifted to perpetual campaigns configuredusingbusinessrulesinmarketing automation. This allows Top Performers to drive a higher quality of lead in the long term. Sure, it takes time andefforttoconfiguretrigger-basedcampaigns in marketing automation, but some of these campaigns will convert a higher quality of lead for months or years with minimal maintenance from marketing. Again, the concept of leverage echoes throughout Top Performing behavior.

Unfortunately,it’sprovendifficultforsmall businesses to forgo legacy tactics, particularly when they are perceived to beworking.Accordingtoresearch,88%of B2B small businesses deploy email marketing solutions and 65% use a CRM solution. So what does marketing automation provide that these existing solutions do not? Does marketing automation actually replace email marketing, or do you need both? Table 1 shows a brief comparison of some of the most commonly overlooked nuances of marketing and sales investments in small businesses.

For small business owners it’s important to recognize that email marketing alone will never allow the business to engage buyers across channels in more intimate communications. Email remains the most commonly used channel for delivering targeted communications in a B2B environment in 2015. According to respondents from the 2015 Marketing Automation survey (n=359), 95% of organizations use email as a primary channel for communicating with

“... Top Performing small businesses that use marketing automation do not report a need to hire additional talent or devote dedicated resources to marketing automation. ”




ConsiderationMarketing

Automation Email Marketing CRM

CAMPAIGNS

Configure inbound or outbound campaigns. Inbound campaigns provide long-term set and forget benefits.

Constantly configuring outbound campaigns. Risk fatiguing lists. Conversion benefits are fleeting.

CRM tools allow users to configure email campaigns. Difficult to measure success, generic, and time consuming. Not a substitute for marketing efforts.

MULTI-CHANNELENGAGEMENT

MA tracks email opens, website behavior, custom forms, and social to infer prospect intent and trigger pre-configured communications at the right time.

None. Email campaigns trackbehavior within email only.

None. CRM is not a substitute for marketing technologies.

COST

Pricing typicallybased on database size in MA. Price increases in line with volume of active leads managed by MA.

Pricing usually per email or tiered by email send volume.

Pricing per user. Necessary cost for tracking ongoing customer engagement and pipeline management.

CLOSED-LOOPREPORTING

Link marketing activity by channel to sales closed revenue. Visibility into which channels and campaigns influence sales

None. Email campaign reporting is on email conversion only.

None. Reporting is independent of marketing effort. When integration exists it’s usually channel specific-email, form, etc.

TIME / EFFORT FOR INTERNAL RESOURCES

Configure inbound campaigns that play a long-term role in lead generation. Track lead-to-sale conversion to validate marketing spend.

Constantlyconfiguring campaign of the day/week/month. Primarily outbound effort has short-term conversion benefits.

Configure CRM layouts. Without packaged modules to link to CRM, detailed analysis of pipeline is cumbersome, time consuming or impossible.

LEAD PRIORITIZATION

Lead scoring, lead grading, and CRM integration are unique to marketing automation tools.

None. Users must manually filter/segment on individual campaigns and configure new campaigns manually.

Updates to opportunity stage are manual, which isn’t all that helpful for a small business.

● - Positive Benefit ● - Neutral Benefit ● - Negative Benefit

Table 1: A Simplified Comparison between Marketing Automation, Email Marketing, and CRM




prospects and customers, and 75% believe email is the most cost effective option for personalizing communications and measuring effectiveness. While the future may lead to a shift to mobile or even social media, email marketing is just as compelling today as it was 30 years ago.

What is changing is the nature of the engagement over email. By tracking prospect behavior in other channels, marketers can trigger the right message at the right time via email. Email also remains one of the only ways to link the role, industry, or purchase history inside customer databases. The problem is, most channels like the web and social createanonymoustrafficthatcannotbelinked to a prospect until they engage in an identifying event such as a form capture or cookied interaction. But marketing automation has the power tolinkanonymoustrafficonancillarychannels after a prospect is known. That means the prospect’s activity can now be linked to contact or account records in CRM for sales to reference at later stages of the sales cycle.

Marketing automation replaces stand-alone marketing tools and allows small businessestopre-configureautomatedrules that track and monitor prospect behavior across the website, email, social, and landing pages to deliver pre-configuredcampaignsthatcanbetriggered based on timeframe, buyer behavior,orsegmentationfilters.Ifnone of your competitors use marketing automation you’re probably okay today, because your target buyer isn’t being exposed to highly relevant engagement from competitors. But that is rapidly changing because early adopters of marketingautomationareinfluencingcustomer expectations (even in other industries).

But while marketing automation tools

promise to replace existing systems and integrate directly with CRM, many small business owners are on the fence about making an investment. Rightfully so. There are plenty of stories of failed attempts to embrace the technology, and expectations that it will require additional content, time, and expertise. It does, but research provesthatifyoudon’tfindawaytomanage multi-channel communications, align marketing technology with CRM, apply metrics to decisions about how to allocate budget, and deliver more relevant communications to your target audience, you simply cannot compete in 2015.

3 Compelling Marketing Automation Trends for Small BusinessesThere are quite literally hundreds of compelling statistics about marketing automation and the new dynamics of B2B marketing. But small business owners and decision makers really only need to answer three questions when evaluating marketing automation:

• Are other successful small businesses using marketing automation?

• What is the tangible return we should expect from the investment?

• What level of effort (budget, time, and resources) is required to generate a return on investment?

What we now know from research over the past 10 years is that there are three very compelling trends that relate specificallytothebenefitsofmarketingautomation for small businesses.

1.) Top Performing organizations (large and small) have a propensity to embrace marketing automation. Top Performers are typically 5-7 times more likely than

“...if you don’t find a way to manage multi-channel communications, align marketing technology with CRM, apply metrics to decisions about how to allocate budget, and deliver more relevant communications to your target audience, you simply cannot compete in 2015. ”




theaveragefirmtohaveinvestedinmarketing automation and to have been usingitforover3years.Thesefirmsalways achieve superior revenue growth relative to peers, but they also realize gains in lead-to-sales conversion, response rates, customer satisfaction, and return on marketing investment. Keepinmind,thesebenefitsarenotsolely because of marketing automation, but marketing automation certainly plays a role.

2.) There are best practices and tactics that lead to successful return on investment in marketing automation. The most critical of which include a thorough understanding of your target audience, a universal understanding of the customerjourney,shareddefinitionsofleadclassificationacrosssalesandmarketing, and the quality of content. Note that none of these best practices focus on the technology or adoption. Whether you use marketing automation or email marketing is irrelevant to success if you don’t embrace the way customers want to engage across online andofflinechannels.Thatsaid,onlymarketing automation allows you to automate success and align marketing/salesinamoreefficientwaythanfragmented technologies.

3.) It is actually easier for small businesses to embrace marketing automation than it is for mid-to-large businesses. In mid-to-large businesses, research has proven that it’s much harder to drive changes in process and technology use because the culture by nature has more potential to resist change or take longer to adopt new processes and technologies. Top Performing Small Businesses are notorious for reporting improvements to lead quality and pipeline growth within 6 months after an investment in marketing automation, while mid-to-

large organizations report an average of12-18months.Don’tbefooledbytheperception that it’s easier for mid-to-large businesses just because they have more budget or resources.

Getting the Biggest Bang for the BuckWhat does an investment in marketing automation actually look like for a small business? (See Figure 1.) One potential landmine you really want to avoid is investing in marketing automation and continuing to use the tool the way you used email marketing platforms for outbound campaigns. Marketing automation can truly add a lot of value to traditional outbound efforts, especially if leads are engaged with call-to-action messaging that capturesadditionalfieldsorvalidatesopt-in preferences. But the real value of marketing automation comes from the creation of quality content that attracts the right buyer by offering something of value, instead of selling or promoting to the buyer.

Thinkaboutitintermsoffishing.It’sextremelytimeconsumingtofishforaveryspecifictypeoffishbyconstantlycasting a huge net and sorting or discardingthewrongfishonceyougetthem in the boat (that is, the leads that really aren’t leads at all). It’s far more efficienttobaithookstoattractthespecifictypeoffishyouwanttocatch.This is exactly what inbound marketing is designed to do. You are essentially creating baited hooks (a form capture or opt-in) and promoting these via call-to-action messages across various channels such as paid search, your blog, or rented lists.

Themostdifficultchallengeforsmallbusinesses to overcome is the idea that going forward you aren’t going to pullanetfulloffishontotheboat(via




1

2

3

4

5

B2B small businesses that achieve the highest growth in revenue are 7x more likely than the average B2B small

businesses to adopt marketing automation (MA) technology.

Top Performers using MA for over 2 years report substantially higher performance in key metrics.

MA allows small businesses to up-sell and cross-sell more efficiently to existing customers (to help maximize customer

lifetime value more efficiently).

Small business with 1-2 early-stage nurturing campaigns configured in MA estimate the volume of quarterly qualified

leads increased an average of 120% because of MA outreach.

MA maximizes re-engagement revenue from qualified prospects that engage sales but choose to purchase at a

later time, reducing dependence on manual follow-up.

Using MA

Large Enterprise B2B (>$1B)

Using MA

Midsize B2B($50M - $1B)

Using MA

Small Business B2B (<$50M)

Top Performing SmallAll Other Small

82% 34%2%

68%

9%

SMALL BUSINESS USING MA

Val

idat

ion

Tan

gib

le R

etur

n

92% 89%72%

57% 55% 48%29%

14% 19%35%

12% 9%

AcquisitionRevenue

# QualifedLeads

Up-SellRevenue

Response Rates Reduced CostPer Lead

Lead-to-SalesConversion

Top Performing Small (Using MA) All Other Small (Using MA)

Reported “Significant YoY Improvement” in Metric

What % of revenue comes from existing customers?

Using MA

All Respondents

50%

Not Using MA

All Respondents

30%MA helps organizations use customer data to inform behavioral triggers that automate ongoing cross-selling and up-selling campaigns to existing customers.

According to Top Performers in a 2010 survey from Gleanster research, approximately 8% of the leads that are qualified (but do not purchase in the short-term) will come back and purchase at a later time without any intervention from marketing. But, with lead nurturing, this number can be increased fourfold to as much as 20-25%. With minimal effort small businesses can salvage future pipeline and drive more revenue from qualified and engaged leads by automating customer nurturing campaigns in MA.

# Quarterly Leads Pre-MA

# Quarterly Leads Post-MA

We asked small business survey respondents to estimate the impact of sales ready lead volume as a result of MA:

? ?

Average boost in sales-ready lead volume:

120%

Figure 1: Ten Research Stats that Support a Case for Marketing Automation Adoption in a Small Business




6

7

8

9

10

Small businesses that use MA report the top three benefits of MA investments: include increase in lead quality, visibility

into the customer lifecycle, and sales effectiveness.

Top Performing Small Businesses say top two most difficult aspects of the investment Is content creation (75%) and

learning to configure campaigns in the new system (64%).

90% of Top Performing Small Businesses that use MA report they did not increase headcount after investing in MA.

MA instantly makes CRM move valuable to sales reps who get lead alerts, prioritized lists for follow-up, and context about how leads engaged with the brand all within CRM.

While more costly than email marketing alone, companies that use marketing automation for over 2 years report the

technology is “critical to future success.”

Leve

l of

Eff

ort

Did the investment in MA require more headcount?

Using MA

NoThe need for additional headcount is a top concern for small businesses. MA does require an up front investment in time and effort, but it should replace legacy marketing campaigns. Unlike the constant demand for newly configured batch-and-blast campaigns in email marketing, MA inbound campaigns derive long-term benefits that automatically link to CRM for optimal engagement.

Top Performers overwhelmingly validate that MA is worth the budget, time, and effort. That said, average small businesses that invested are 5x more likely than Top Performers to be on the fence about future use. Further support for learning about what Top Performers do differently.

72%89%92%

Sales EffectivenessVisibility into buying cycle

Lead Quality / Revenue

All Small Businesses…

Top benefits of MA: 94% of small business that use MA report that marketing & sales executives rely on periodic reporting from MA systems. Sales is also 7x more likely to use CRM on a daily basis when MA historical data is in contact or account records in CRM.T

angib

le R

etur

n

Using MA

75%

Using MA

64%

Content Creation

ConfiguringCampaigns

What is the most difficult part of embracing MA?Yes, MA will require some level of effort in content creation to be effective – but simplicity is the key, Top Performers tend to use out of the box templates, lead scoring, and integration capabilities and then tweak them over time to suite the business. You only need 1-2 assets to get started and realize initial benefits.

90%

95% of Top Performing organizations report sales reps use sales alert capabilities in marketing automation. These same firms also report increases in satisfaction with CRM because reps can view customer engagement history for context about engagement with the account or contact. MA is the most efficient and timely way to give sales context about the optimal outreach strategy and which leads are worth finite sales time.

79%

10% 11%37% 54%

9%

Yes On the Fence Moving awayfrom MA

Top Performing SmallAll Other Small

Will you continue to use MA?

Figure 1 (Continued): Ten Research Stats that Support a Case for Marketing Automation Adoption in a Small Business




batch-and-blast email campaigns or generic outbound promotion). Marketing automation is setting the bait and waitingfortheidealfish(yourtargetbuyer) to take a bite. Moving to a smaller quantity of higher quality leads can be a slow process initially, and marketing automation users say it can take up to 12 months to grow inbound leads to a sufficientvolume.It’softenshockingforsmall businesses to move away from the high volume lead mentality. But if every lead you captured actually translated to a sale, you probably wouldn’t be a small business for very long. So we know that by nature, small businesses likely have some fat to trim in the marketing andsalesleadqualificationeffort;marketing automation helps do this moreefficiently.

For small businesses, the most common barrier to adoption of marketing automaton is a lack of understanding about how to build a business case. So what does an investment in marketing automation really look like if your business chooses to move down that path?

Pre-Investment Expectations

• Defineacommonlanguageformarketing and sales. To start, you want to make sure marketing and sales both share a common vocabulary for what constitutes an inquiry,lead,qualifiedlead,andopportunity. You should also evaluate yourcustomerdatabasetofindout if there are any obvious target segments in your existing client base – by industry, company size, buyer persona, etc. This information will be critical for prioritizing your content and nurture campaign efforts toward leads that have the greatest propensity to close.

• Identify 2-3 high priority customer

personas and then expand from there. Don’t try to boil the ocean when you initially roll out marketing automation. Pick a handful of target personas that have the greatest likelihood to resonate with your product or service. You will be configuringyourfirstemail/landingpage templates and focusing your content efforts on these high priority targetcustomersforthefirst6-12months after rolling out the solution. If these are ready before you green light the solution, you’re ready to hit the ground running.

• You will need content to get started, but you don’t need boatloads of it. Lighten the load on content by creating 1-2 assets designed to add value for your target audience, not sell to them. You can use available assets such as datasheets or product whitepapers as later stage assets. Your provider will help you align your content with various communications in the sales cycle. But it’s a good idea to have a few early stage resources before you make the investment. These days, your brand will earn mindshare (and hopefully a sale) through the quality of content. Good content is valuable and educational for buyers – even if it’s not directly selling what you offer.

• Clean up your customer and prospect lists before importing them into your new marketing automation tool. If budget permits, consider paying a third-party provider to scrub your list. Typically you will be paying for active leads managed within marketing automation, so there’s no use loading poor quality leads or old information. Fifty percent (50%) of Top Performers report that they did not load a list to marketing automation. There are merits to starting fresh in the new system and

“... the most common barrier to adoption of marketing automaton is a lack of understanding about how to build a business case. ”




creating campaigns that literally grow a new opt-in list using marketing automation capabilities and opt-in preferences managed from within CRM.

• Plan on using lead scoring and CRM integration from day one. Use out-of-the-box capabilities from your marketing automation provider. Recent consolidation in the solution market means some providers will provide a deeper level of integration and support between marketing automation and CRM than others. It’s a good idea to go with a provider that has packaged integrations for your existing CRM.

• Rely on the experts. Some vendors deliver great onboarding support resources or dedicate success coaches for the initial setup. As a small business, plan to use these resources to the fullest extent, but don’t outsource everything. Eventually someone needs to know whatwasconfiguredinthesystemfor ongoing administration. You will never have more enthusiasm than during the initial rollout, so make sure to fully leverage expertise from providers or consultants who can bring industry domain knowledge or best practices to the table.

• Many small businesses are wary of the increased demand for quality content that marketing automation will create. There is no world where you can ignore the need to create quality content and earn mindshare from prospects. But if you don’t have the resources internally, there is a rich industry of almost 3,000 B2B agency partners who can help. You can engage these consultants and agencypartnerstofulfillongoingcontent requirements for a very competitive rate relative to hiring

additional writers and resources. Ultimately, nobody knows your business like you, so as a small business owner or executive often the best content is going to come from within. Keep in mind, while it’s annoying to have to spend time on content creation, even a few quality pieces can be used for long-term inbound marketing efforts. Unlike the campaign of the week in email marketing systems, content can be used for months or years.

• Migrate relevant data from legacy applications. You will likely be starting fresh with respect to multi-channel contact and account engagement inside the new marketing automation system. Yes, that means all that historical data in email marketing will be going away. Chances are you aren’t using it effectively in email marketing anyhow, but you can export relevant segments,filters,orlistsandloadthose to marketing automation if necessary. Top Performing organizations are 9 times more likely than Everyone Else to use CRM as a centralized hub for customer history. If you can export records with auniquecustomeridentifiersuchas an address, email address, or company name into CRM it might be worthwhile.

• Don’t make the decision to invest in marketing automation in a vacuum within marketing. Sales needs to takeactionontheleadsthatflowintoCRM, and ultimately rest assured thattheleadscoringisreflectingattributes that actually help qualify prospects. That’s why simplicity is actually very important for lead scoring algorithms. You will likely refinethemovertime,butmakinglead scoring very transparent will be critical to initial sales buy-in.




There’s also a concept known as lead grading, which assigns a grade based on explicit factors that align with your ideal prospect (again, this is why it’s important to understand your ideal prospect prior to engaging marketing automation providers).

Post-Investment Tips• Start by automating simple, repetitive

activities such as a newsletter, form capture, or periodic email campaign to customers. Marketing automation allows you to create templates for email, forms, and even social engagement.Youwanttooffloadrepetitive and manual campaigns firsttofreeuptimetolearnthemorestrategic nuances of the different types of campaigns. (See Deep Dive: Set-and-Forget Lead Nurturing.)

• Use out-of-the-box lead scoring or very simple criteria. It should be obvious to sales why a lead was ranked as “hot” or given a higher grade relative to other prospects.

• Consider using marketing automation to automate other internal activity – Top Performers are 5 times more likely to use marketing automation to onboard new employees, automate reporting, or deliver updates to company employees. The nice thing about marketing automation is that it’s about automating a rules-driven process. Why not also use it to communicate with employees, new hires, or partners?

• Communicate tangible and intangible results early and often. Everyone wants to see an immediate boost to sales. But it might take some time before the effort pays off. It’s just as critical to see a boost in organic search results, an increase in email subscribers, an increase in conversion, or a spike in inquiries.

All of these things help demonstrate positive momentum for internal leaders such as the CEO, CFO, CIO, and Sales.

• Divest of legacy tools that become redundant as a result of marketing automation. All too often companies are reluctant to divest of email marketing platforms because they may contain years of history. You willfindhistoricaldataislessandless valuable over time, so whatever history didn’t get migrated to CRM or the new marketing automation system isprobablygarbageinthefirstplace.The cost of legacy applications should eventually offset the cost of investing in marketing automation.

• Be open to changes in branded template designs inside the new marketing automation system. You can waste a ton of time trying to nitpick WYSIWYG editors to look exactly like the campaigns in the email marketing tool. Most marketing automation providers offer a/b or multi-variant testing so you can optimize new template designs. Bottom line, chart a path to success that provides the least resistance.

• Plan to spend money on promoting inbound campaigns via paid search. Once you create the content, you’re going to have to get it in front of your target buyer somehow. If you aren’t willing to spend some money to do that, your inbound effort will likely fall short and someone is going to blame the technology instead of the tactics.

Major Pitfalls to AvoidFor small businesses careful consideration is always a major factor in technology investments. It’s not so much the cost of licensing a solution (and that’s certainly a concern), it’s the time and effort that goes into making

“Plan to spend money on promoting inbound campaigns via paid search.”




different technologies usable and valuable to the organization. Mistakes orhiccupscanbeamplifiedsignificantlyin a small business, and let’s face it, the cost of marketing automation will likely be a substantial chunk of the budget, which means senior leaders and CEOs are putting their necks on the line amid scrutiny from the peers or a board of directors.

Many small businesses are cautious about making an investment because they will need to take the time to learn a new system, they need to make time to create content, and they may need additional budget to pay for inbound content promotion. Investments in marketing automation are truly transformational in nature because the entire revenue engine will be re-engineered to help optimize customer engagement across the entire lead lifecycle, from inquiry to long-term customer.

Below are a few of the major pitfalls small businesses fall into when making investments in marketing automation. Many of these will stall or hinder the return on investment, and more often than not they can be avoided with education and adjustments to expectations

It’s not about the technology alone – you can’tflipaswitchandexpectareturn.Ifyou expect an investment in marketing automation to magically generate a return simply by paying for the license, keep your money and go educate yourself some more. You will need to configurebrandtemplates,thinkthroughhow prospects and customers actually engage with the brand, align lead scoring rules to your prospect behavior, create new content, and be open to process re-engineering. Interestingly, the average company that invests in marketing automation usually spends

thefirst12monthsusingitthesameway they used email marketing (to blast campaigns). A further seventy-percent (70%)ofaveragefirmsfailtoimplementleadscoringfor12-18monthsafterimplementation. Top Performers are notorious for getting things up and running within 6 months and expecting another 6 months for the effort to pay off in the form of higher quality leads.

It’s not just about automation – what you automate matters. If you accelerate mediocre processes with automation you will accelerate mediocre results. If what you are doing today (without marketing automation) isn’t working all that well, don’t take the same process and cram it into a new, more expensive platform and expect better results.

It shouldn’t be too complex – packaged capabilities give you a huge leg up these days. Top Performers on average support 3-5 campaign templates whereby the content changes but the multi-channel stages in the campaign are re-used. There’s no reason every newcampaignyouconfigureneedsa unique new customer experience. Consider a basic template with a form, email follow-up based on form behavior, and then a time-based email follow-up based on response. You can re-use a campaign process over and over and just change the copy or creative to adjust for the recipients.

Stay away from excessive customization – plan to optimize over time. In a small business it’s critical to see some small wins early in the process. Interestingly, the most successful mid-to-large businesses that invest in marketing automation start simple and then expand the use of new features or deeper personalization over time. Don’t expect to use every robust feature in the platform, but plan on layering these into the mix over a period of one or two

A Key Differentiator for Marketing AutomationMarketing automation brings one unique factor to the table that no siloed marketing technology can address. The integra-tion with CRM allows marketers to focus marketing spend on sales conversion. While it’s virtually impossible to link the contribution of each individual marketing channel to a sales outcome, you can start to identify discernible trends when customer engagement is centralized inside a tool like marketing automation and then linked to CRM. These days, it’s very common for small businesses to myopically focus marketing efforts on a handful of channels that may or may not be generating optimal top-line results. Marketing automation can help determine how effective these channels are relative to each other. Senior marketers can literally back into how much money it will take to drive x dollars in pipeline by using a combination of metrics in marketing automation and CRM. (See Deep Dive: Lead Lifecycle Analytics.)

By benchmarking average sales perfor-mance you can determine the quantity of qualifiedleadsmarketingneedstosourceto feed sales on a quarterly or annual basis and meet sales targets. This eliminates the guesswork in budget allocation inside asmallbusinessandensuresfinitebudgetis actually providing leverage in the form of new sales. Who cares how many leads you drive from marketing efforts if they don’t translate to sales in a measurable way?Thisaloneisahugebenefittomovingaway from siloed marketing technologies.




years.

You used to measure inquiry volume, and it’s going to shift to the volume of sales accepted leads. Funny how what we measure consistently translates to how we behave. Top Performing Small Businesses are 15 times more likely thanAveragefirmstomeasuremetricsthat translate to engagement or sales: response rates, conversion to sales accepted leads, sales, opt-in list growth, and up-sell revenue from customers. ContrastthiswithAveragefirms,92%of which indicate that the top metric for marketing success was the volume of inquires generated by marketing on a periodic basis. Volume of leads as a metric of success doesn’t translate as well to marketing automation, where success is measured more by the quality of leads than the quantity. You’re doing things right in marketing if sales isn’t complaining that they have to qualify and create opportunities as frequently after investing in marketing automation.

ConclusionThe key theme for small businesses to understand from this research is that marketing automation is not simply about a next-generation technology with new features that replace legacy technologies. Marketing automation isawayofefficientlyandeffectivelyengaging customers in a complex B2B sale to build parity in the competitive arena. The catalyst to use marketing automation isn’t company size, budget, or number of resources on hand, but rather the rising expectations from customers who demand relevance and preference management in exchange for share of wallet. What we now know to be true from research is that Top Performing Small Businesses have anaffinityforinvestinginmarketingautomation and embracing the new

dynamics of the B2B buyer. It’s of courseneveraseasyasflippingaswitch on technology, but businesses of all sizes have been experiencing an overwhelming sea change in customer engagement over the last 5 years. Much of this change was literally brought on from early adopters of marketing automation who raised the bar in the customer experience and set expectations from buyers.

Small businesses assume a tremendous amount of risk when making infrastructure decisions. Time is precious, and every minute needs totranslatetoprofitabilityortop-linegrowth. Unfortunately, marketing automation also comes with additional burdens on resources who must align content creation efforts with the buying cycle and the target audience. While some of these efforts require net new time and budget for the small business (and therefore initially seem unfeasible), research suggests that successfully embracing marketing automation will offset the cost through top-line growth, and then some. It’s also important to note that small businesses should be replacing legacy tactics, not adding to them. That means marketers should spend less time on cumbersome and manual processes in fragmented infrastructure. So if the question is, “Do we invest in marketing automation as a small business?” the answer is not a matter of if, but when.




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Related ResearchRecently published research that may be of interest to senior industry practitioners include:

7 Essential Best Practices for Connecting Marketing and CRM Technologies

2014 Marketing Automation Benchmark Report

Transform Your Inbound Strategy from Good to Great

How to Create Engaging Content for Lead Nurturing Campaigns

Concept CheatSheet: Inbound Marketing

Technology CheatSheet: Marketing Automation - Under the Hood

From Batch-and-Blast to Lead Nurturing

The Gleanster website also features carefully vetted white papers on these and other topics as well as Success Stories that bring the research to life with real-world case studies. To download Gleanster content, or to view the future research agenda, please visit www.gleanster.com.

About Gleanster Gleanster benchmarks best practices in technology-enabled business initia-tives, delivering actionable insights that allow companies to make smart business decisions and match their needs with vendor solutions.

Gleanster research can be downloaded for free. All of it.

For more information, please visit www.gleanster.com.

AuthorIan Michiels, Principal Analyst

http://www.gleanster.com/report/7-essential-best-practices-for-connecting-marketing-and-crm-technologies

http://www.gleanster.com/gleansight/2014-marketing-automation

http://www.gleanster.com/report/transform-your-inbound-strategy-from-good-to-great

http://www.gleanster.com/report/how-to-create-engaging-content-for-lead-nurturing-campaigns

http://www.gleanster.com/report/inbound-marketing

http://www.gleanster.com/report/marketing-automation-under-the-hood

http://www.gleanster.com/report/from-batch-and-blast-to-lead-nurturing

http://www.gleanster.com

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February 015 Deep Dive0ca36445185fb449d582-f6ffa6baf5dd4144ff990b4132ba0c4d.r41.cf1... · • 95% of organizations use email as a primary channel for communicating with ... efforts