February 8, 2013
By Lou Guercia,

When Marketing Automation Is Not Enough

Marketing automation, as defined by Marketing Automation Times, is a subset of "customer relationship management that focuses on the [automation of] definition, scheduling, segmentation, and tracking of marketing campaigns." It is technology geared toward improving lead conversion, with an eye toward alleviating the highly manual process that marketers once employed. And it's not just lip service; adoption of marketing automation is exploding. Sirius Decisions predicts that by 2015, more than 50 percent of companies will adopt it.

It's not hard to understand why marketing automation is surging in popularity. The Annuitas Group reported that businesses that use it to nurture prospects experience a 451 percent increase in qualified leads. Not to mention that nurtured leads reportedly make 47 percent larger purchases than those that go unnurtured. Other studies bolster these findings. In fact, a recent Lenksold Group report suggests that organizations that embrace marketing automation see a tangible increase in overall marketing performance. They found that a highly effective segment of marketers, which make up just 11 percent of the marketers that they surveyed, perform integrated marketing to outgrow competitors, adopt integrated marketing automation, and measure their effectiveness through ROI metrics.

This top-tier segment of marketers identified in the Lenksold study is far more likely to report strength in driving repeatable and predictable lead-to-sale conversion rates (75 percent versus 27 percent of all other segments). It's highly encouraging to see marketers starting down the path to integrated marketing departments. But adding marketing automation software alone is not enough. The same study finds that only 13 percent of respondents are very satisfied with their level of effectiveness as a result of marketing automation.

No one reason for this stands out significantly above the others. But for CMOs who want to make the most of their marketing automation investment and be more satisfied with the results, here are three important steps to take.

Step 1: Integrate your data.

A core component of effective marketing automation lays in the data—specifically, the integration of data from other systems. To effectively segment prospects and customers, savvy CMOs need the data from all customer-facing systems held in one system of record, allowing them to develop a holistic view of their audience.

Yet, at this point, data integration is still something that many organizations are lacking. In our Scribe "State of Customer Data Integration" study, only 18 percent of respondents report having full integration between their CRM and marketing automation software. Of those who work with a third-party system integrator or consulting partner, 29 percent report integration between the CRM and marketing automation systems.

This lack of integration impedes the organization's ability to share critical customer and prospect data across the business. Savvy CMOs know this information unlocks the key to sophisticated segmentation and effective communication strategies to drive sales.

Step 2: Respond to your organization's need for content.

One growing challenge recognized by those who struggle to find marketing automation satisfaction is meeting the growing need to develop content for marketing campaigns. The Content Marketing Institute reports that nine in 10 B2B organizations market with content, and that 60 percent increased their investment in content production in 2012.

A continuous stream of high-quality content serves as the backbone of a successful marketing automation program. The Lenksold study found that the highly effective marketers said that their content marketing is designed specifically to drive demand and revenue.

Step 3: Recognize and measure the importance of marketing and sales alignment.

The buyer's journey has morphed greatly in recent years. Whereas buyers once relied on a finite amount of resources to gather data, today there are more and more avenues to collect information. As such, we've seen a power shift in favor of the buyers. Prospects and current customers gather information about your company in the form of peer reviews, forums, searches, analyst reports, and influencer recommendations often before they even visit your corporate Web site. Research shared by the Marketing Leadership Council shows a customer's first engagement with a company representative usually occurs when the customer is 57 percent of the way through the purchasing process.

In the new world of real-time marketing, where the customer is in the driver's seat, it's critical to have alignment on customer segments, pain points, and ways to support customers on their buying journey.

One key metric that continues to rank highly among savvy CMOs is the lead-to-sales conversion. If marketing knows the priority contacts and what it takes to successfully nurture them, it makes sense for marketing to co-own the effectiveness of converting leads into sales. The role of the CMO is thus elevated within the organization, as the buying power shifts to the customer and marketers have the best insight into customer needs and priorities. As a result, CMOs are being held more accountable for driving revenue than in the past, and are viewed more as revenue generators rather than cost centers.

As we see continued growth in marketing automation adoption, those who strategically integrate its presence with existing marketing assets, including improving its performance by strong data integration, high-quality content, and close alignment with sales, will excel and outsell their competitors.

Lou Guercia is the president and CEO of Scribe Software. Previously, he was director of operations and strategy for online collaboration services at Lotus Software, IBM's first public cloud service. He also served as CEO of WebDialogs, a provider of SaaS Web conferencing services to channel partners, which was acquired by IBM.