marketing automation

“What is Marketing Automation – and what will it do for my business?”

In a meeting with a group of business owners in Heidelberg in August 2017, our conversation focused on Marketing Automation.

[1,800 words | 9 minutes reading time]

What is Marketing Automation?

Do you remember the textbook description of the marketing mix – Product, Price, Place, Promotion? Well, Marketing Automation addresses the Promotion quadrant.

Marketing Automation describes ways to organise your customer communications processes to make them more effective and more efficient.

And what will it do for my business?

It reduces friction on the Buyers Journey.

It’s like putting a layer of non-stick Teflon on your sales funnel. The impact on the new customer acquisition process, is to increase the number of new sales opportunities and achieve a higher sales close rate.

The impact of Marketing Automation on repeat business processes is that cross-sell and up-sell promotions can be more accurately targeted. That improves relevance and increases response rates.

Put those together and you have faster customer acquisition, plus increased loyalty and better customer retention rates, which adds up to longer customer lifetime and increased long-term value.

Nice combination.

Absolutely. It’s a formula for business growth.

Marketing Automation can definitely increase revenues. You should be aiming to increase margins and market share, too.

It sounds too good to be true. Are those results guaranteed?

Definitely not. If you haven’t done Marketing Automation before, there’s too much that can go wrong.

Three steps are essential steps to get that chain of results.

The first is management sponsorship – to deliberately aim for those results and set them as business targets.

The second is the willingness to invest the resources that are necessary to upgrade current processes.

Third is long-term commitment to the vision even though the activities will evolve over time.

Having said that, it’s time and effort well invested, because increases in revenues, margins and market share will never just happen by accident.

You keep referring to processes. Why?

Because the aim of Marketing Automation is to raise the performance of marketing within the business to a higher level of effectiveness and efficiency.

If you keep on using the same methods, you’ll get the same results. Using todays practices, the only way to increase output is by pumping in more resources.

To get a totally different scale of result from your marketing resources, you need to figure out smarter ways of working; find more efficient and more effective ways to win and keep customers.

Like a football team that wants to step up from regional to premier League. It has to learn how to play at a whole new level.

Exactly. Now, you can achieve ‘smarter ways of working’ through a variety of paths. It may mean re-designing processes; or upgrading systems; or training staff. Or even changing the mix of resources you use.

This is what Marketing Automation is really about – re-thinking how to win and keep new customers; re-thinking the design of marketing processes so that they are not just aligned with business objectives; but also match market needs, too.

Where is the customer or prospect in all this?

Right at the centre. They are the focus of every design choice, every process, every interaction, every report. Customer data is the fuel that powers automated marketing.

One of the core principles of Marketing Automation is to design each customer interaction so that it generates measurable data that supports decision making.

The better the quality of relevant data, the better the customer insights you will gain. The better the insights, the more effectively you can optimise your processes.

Marketing Automation is about creating not just one, but a whole set of feedback loops. The entire Buyers Journey becomes a learning mechanism for understanding customer needs.

What system or a software product do I need, to do Marketing Automation?

The core components are a website and an email marketing system.

To those, you can add-on other aspects to expand the concept. Like keyword advertising at the front; or integration to CRM at the back.

But technology is simply an enabler. Although it’s necessary for success, technology alone is not going to give you the Return on Marketing Investment you want.

So how important is technology, then?

Technology is “the right tools to do a job”.

You can make a chair out of wood, or you can make it out of metal. The tools and the material are nowhere near as important as the result: “Does it do the job it was designed for?”.
Now, it’s possible to combine a website and an email marketing to create a process for winning and keeping new customers in a highly efficient and cost-effective manner.

But in a lot of companies today, that technology combination isn’t currently providing an effective and efficient way to win and keep customers.

In that situation, re-thinking how those tools are used and re-designing the processes, is an opportunity to drive business growth.

If you haven’t done Marketing Automation before, the reality is that you’re better off sticking to the tools you know – at least, for the moment.

Why do you say ‘for the moment’?

In marketing – just like in manufacturing – technology is scalable up to a certain point. Beyond that point, processes break.

Now, processes break when companies grow. So that might actually be a positive signal.

Or it might be your marketing team is nearing the limits of productive capacity. They simply can’t produce more using current methods.

Either way, you have to actively look for – and find – new and better processes for winning and keeping customers.

And at that point – where the need for change is obvious, but the solution is hidden – you can start asking ambitious questions.

For example?

Imagine the volume of new customer organisations you have to win and keep, to make revenue growth targets.

Now compare that need with actual Leads generated by your current online marketing.

Will the current processes carry you through the next three years of business growth?

Let’s say you need to double your current annual Lead Generation capacity to achieve growth targets. The ambitious question to ask is: “how do we double Lead capacity, for less than double the growth in resource costs?”
If we phrase the question like that, the answer is clear: we need to design different processes, that combine the available resources in a completely new way.

Hmmm …

If current marketing processes can’t handle future sales demand, my recommendation is to begin thinking about the process issues today.

Aim to start by tackling small Marketing Automation projects within three months, using your current technology. Push that technology to the limits. Where the processes break is where you discover the selection criteria for your next toolset.

But don’t rush you into buying technology – especially high-priced technology – before you’re ready. You may be buying the best tools in the world, but if staff lack the skills or commitment to use them, you won’t get very far.

So what do you see as the essential ingredient for success in Marketing Automation?

The essential ingredient is the willingness to change the current way of working, to get a whole new scale of result.

In Marketing Automation projects, the focus is on underlying processes: how you design them and build them. And after that, how you optimise them.

It also helps if the company attitude is proactive, if you can treat mistakes as part of the learning curve and encourage experimentation.

It sounds like there are aspects of Change Management involved here.

I agree: there definitely are. The classic advice for a change management project is to start small and fast.

First, define a ‘Quick Win’ project that will deliver measurable results within a reasonable timeframe to gain experience.

And then promote the results internally to build credibility. When you have gained support, move on to bigger or longer-term projects.

That approach is best served by using whatever technology you already have today. Technology that you know will do the job.

Introducing new technology into a Quick Win project adds complexity, increases the budget and slows it down.

But what if a project depends on new technology?

Then I wouldn’t describe it as a Quick Win project, but as one of the longer-term goals.

Becoming really competent with new technology always takes longer than you think.

Pick some other process to start with, then?

Yes. The best candidates for Quick-Win projects are the ones completely within the budget, scope and decision-making authority of the marketing department.

There are lots of customer communications processes to choose from. Sales promotions, registration for online or live events, nurturing and segmentation programs, contact opt-in and qualification, retention and loyalty – you name it.

Projects that involve a lot of collaboration with other departments – like Lead Generation – are vitally important, but belong on the longer-term list, because shared decision-making is always slower.

 

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