Tuesday, September 25, 2012

Marketing Automation Not Just About Revenue (But it's Damn Important)

I've had the following conversation a few times with clients who have implemented marketing automation: "so now that we have marketing automation in place we want to do ROI reporting - TODAY". Jumping into ROI/closed loop reporting right away can be difficult. You need to have the right processes in place including a strong relationship between marketing and sales as well as a focus on revenue metrics to name just a few of the requirements. A recent report by the Lenskold Group and The Pedowitz Group backs this up. Don't try and do everything at once with marketing automation - create a plan that will lead to incremental success but don't stop with just simple automation. Improving your organization's overall reporting structure and focusing on marketing's contribution to top line revenue brings many added benefits.

Show me the ROI?

While companies that have implemented marketing automation demonstrate a higher adoption of ROI type reporting such as sales metrics and revenue metrics, the focus is still on cost efficiency metrics, engagement metrics, lead metrics and response metrics (see the right side of the chart below).

Source: Lenskold Group - 2012 Lead Generation Marketing Effectiveness Study

There is no question that there has been a tremendous improvement in the number of companies that are now using some ROI type reporting (4 out 10 companies according to this report). That said, the biggest improvements with marketing automation are seen in increased quality and quantity of leads. Ensuring that the marketing automation building blocks are in place including automated lead scoring and nurturing help generate trust with sales and the rest of the organization. This can help you buy the influence that is needed when trying to close the loop and gain more insight on leads after they move to sales - especially with the long sales cycles that we see with many B2B companies. ROI reporting requires marketing to create a unified lead management process with sales and to also have support from IT when needed.

Source: Lenskold Group - 2012 Lead Generation Marketing Effectiveness Study

Take it to the Next Level - It's Worth it

The bottom line is that it is worth it to get to ROI type reporting. Those companies that are using marketing automation and ROI metrics are seeing a measurable difference when compared to companies that don't use these similar metrics. For example, companies using marketing automation and ROI metrics have seen a 69% increase in marketing's revenue contribution. I would be rather a CMO at a company where I can demonstrate how my team is impacting sales and revenue growth then a CMO at the other company that has marketing automation but can't demonstrate top line revenue contribution. Marketing Automation gives you the tools to reach the promised land. If you can't see a clear path to get to ROI reporting, talk to your account team with the marketing automation vendor you work with - they should have marketing experts that can help.
Source: Lenskold Group - 2012 Lead Generation Marketing Effectiveness Study
Oh and if that wasn't enough, here are a few of the other key findings from the report for companies using ROI metrics to assess their effectiveness:

  • More likely to be outgrowing competitors
  • More likely to define their marketing as highly effective and efficient
There is no question that there is some tough roads ahead for companies that go down this path. What this report backs up is what I see every day. The companies that roll up their sleeves and go all in get the best results. This requires patience, determination and proper planning. Good luck to those going down this road and congratulations to those that are already reaping the rewards.

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