Marketing Automation: Is It Worth It?

As marketing communication firms continue to invest in CRM, marketing automation applications and the staff to run them, the inevitable back-lash is appearing. Some firms are wondering if all the investment is worth it.

It might not be.

There are three issues and three corresponding questions you can answer to determine whether you should invest in these technologies and the more expensive marketing automation in particular.

#1 Client Needs
The first is whether or not your clients are using the tools. If they are, or if they should be, then you probably should too because of the innumerable business opportunities the technology represents for marketing firms right now. So if your clients are in the B2B, healthcare, not-for-profit, education or large-ticket consumer item spaces like real estate, automotive or even pharma then you should be using these tools so you can better help your clients use them. If you don’t someone else will.

This is the trump issue that should have you strongly considering the investment even if you don’t meet the criteria of the two remaining issues below. For more on the opportunities and threats represented here, see CRM: The Train Coming at You.

#2 Lead Volume
The second question is does your lead volume merit the expense? If your website traffic and web-generated leads are low enough that it’s easy to spot the meaningful leads without the help of sophisticated tools then perhaps the investment can wait. These tools are going to help you drive more traffic but their real value is in helping you make sense of that traffic and automate some next steps. Low traffic volume today doesn’t mean you shouldn’t make the investment but it does mean you don’t absolutely have to.

#3 Lead Management Practices
The third consideration before deciding to invest in this technology is the less straight-forward one of how you handle leads in your firm. The truth is very few of the marketing communication firms using marketing automation tools use much of the real automation functionality. Most use the robust email marketing component, the list segmentation, the CRM integration and some use the automated lead scoring. Some firms do run sophisticated drip campaigns based on lead score and lead behaviour but most of the automatically triggered workflows that I see are notifications being generated for salespeople to reach out via telephone or a personalized email rather than auto generated emails directed to leads. There’s a logical reason for this. Volume-based businesses like software as a service (SaaS) companies that run highly scalable marketing programs and can correlate inquiries to demos to sales tend to use the automation components of marketing automation quite successfully. A creative firm looking for one or two new clients a quarter tends to lean on more targeted and personal interactions once a need has been expressed.

With that in mind, let’s look deeper into how your firm’s lead management practices will affect your investment decision.

Leads Defined
While there is no universal definition for what constitutes a lead, mine is a lead is a clue to a possible sale, not yet qualified. Clues are generally demographic (e.g.: job title, location, company type and size) or behavioural (e.g.: clicked on a link, visited your website, downloaded a white paper, etc.) or a combination of the two.

So a lead is a person that might represent a possible sale based on a form completion or number of page views; or based on the type, location or size of her company; or a combination of the above.

Further, a lead has yet to be properly vetted by a salesperson in a conversation around need, decision makers, timeframe and budget.

Lead Tiers
You might find it helpful to think of three different tiers of leads. A tier I lead is the most coveted. This is the person who reaches out to you and says I have a need. It might be an inbound phone call, email or a website form submission. Tier I leads are the cream that rises to the top of the jar. What do you do with these tier I leads? You hand them to the salesperson who calls them, qualifies them in or out and converts them to contacts, accounts and opportunities. Or, if no opportunity exists, the salesperson keeps them as leads with a revised lead status and appropriate next steps assigned, which usually means they’re handed back to marketing and put into the appropriate drip campaign.

Tier II leads are those people who demonstrate a need or interest through their behaviour but who do not reach out to you. The behaviour is usually a form of meaningful activity on your website. Tier two leads are where both marketing and sales people earn their money. It is marketing’s job (and I recognize that smaller firms may not separate the business development roles into purely marketing and sales functions but I’ll continue to make the distinction here) to identify those tier II leads worth calling and pass them over to sales as quickly as possible with the most information they can include.

Sales then follows up and qualifies, just as they would with a tier I lead.

A tier III lead is just a name on a list. It has little or no meaningful behavioural data attached to it. Your sales person would work these low percentage tier III leads only when marketing isn’t producing enough tier I & II leads.

The Deciding Issue: Do You Mine for Tier II Leads?
Back to marketing automation and your decision to invest in the technology. While the fancy apps can help to drive coveted tier I leads, which is everyone’s ultimate goal, their greatest value is in their ability to sort through the mass of leads that are not reaching out to you and separating the tier Is from the tier IIs, thus helping to determine who the salespeople should be calling next and even what they should be saying.

If you have salespeople doing outreach and you want to arm them with better information on who to call and what to say then the investment in marketing automation is probably worth it. If your volume of leads is so low that you don’t need software to help you with that decision then you can save your money for now.

To summarize, the first criteria and the one that trumps the other two is that if your clients are using these tools, or should be, then you should be using them, too. The exception would be for firms whose offerings are so far removed from CRM and marketing automation that they’re certain to not be threatened by the firm that inevitably ends up helping their clients in this area.

If your clients are not marketing automation candidates then the second criteria is lead volume. If you’re generating lots of traffic and aren’t leveraging all that data to make smart sales decisions then you’re ripe for benefiting from an investment in marketing automation. If your lead volume is low it may make sense to defer the costs and complexity and focus on increasing traffic first.

The third criteria is do you actively mine for tier II leads - those who express an interest in your offerings but who do not reach out to you? You might be so successful in your marketing efforts that you live on tier I leads alone and don’t need to apply resources to calling those whom you suspect might have a need. If you’re in this enviable place then it may make sense to keep your money in your pocket.

Marketing automation applications are powerful tools, but they require financial and HR investments that can be taxing for smaller firms. Follow the criteria outlined above before you rush out to buy the latest bright shiny thing.

-Blair

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