What is Marketing Automation?
Marketing Automation is about personalising your communication so that it is relevant and timely for the recipient. This leads to a better conversion rate and an increase in revenue for the sender.
Marketing Automation can be perceived as an IT solution that supports marketing processes. However, a modern IT solution doesn’t provide any real gains or profits unless the marketing organisation takes the opportunity and time to alter their processes. Therefore implementing Marketing Automation usually means incorporating a new marketing strategy.
But why change your marketing strategy?
Today marketing is customer-oriented. This is a significant change from just a couple of years ago. The internet and the rise of social media have considerably altered the buying processes of your customers. Today everything is digital. Your customers and your prospects can find all the relevant information they need on the internet. And they do. They carry out research online and will have almost made the purchase decision before they contact your sales representative. In fact, it’s quite normal for customers to make a purchase without talking to sales.
The world has gone from push marketing to pull marketing.
Thus the main issue for sales and marketing is the buying process. As a sales representative, you are not involved in the important early stages where you have the opportunity to affect the customer’s decision.
If marketing continues sending out generic messages to a fragmented target audience in their mass marketing efforts, chances are slim that the message will actually match the precise stage of the decision process of the customer. Today you have to give the customer the relevant information they need at each stage of their buying process, and that won’t happen with mass marketing.
You need to know your customer
As a marketer you need to be present in the early stages of your customers’ buying processes so that you are able to affect their decision. This means you need to know your customer – not just their company but their behaviour.
When you know the interests of the person and their stage in the buying process, you can provide them with the right content, information and guidance and in doing so get their attention.
To do this, you need to collect all the personal information which lies hidden in their online behaviour. When a person clicks on an e-mail, visits a website or fills out a form, their interests and buying process start to become mapped out and revealed.
The challenge is to gather and structure this information so that it can be used for segmentation purposes – and so you can personalise your communication for each individual.
Personalised communication with digital body language
The expression “Digital Body Language” is now part of the marketer’s everyday vocabulary. This is the structuring of the behavioural data that the Marketing Automation platform handles.
With this data you can execute targeted marketing campaigns, such as a campaign for those people who have read at least three pages on a specific product on your website. As the digital body language keeps monitoring the customers’ online behaviour, when a person fits the criteria, they are then automatically added to the campaign.
Timely marketing communication
This brings us to the second aspect of personalised communication.
With digital body language, you now possess valid and relevant information on a person’s interests. This lets you personalise your marketing messages.
However, this isn’t enough. You still need to interact and communicate at the right time in the person’s buying process.
As described in the example above, you need to create a segment in which the criteria identify people who are starting out on their buying process. When a person fulfils these criteria, they are automatically added to a marketing campaign that nurtures the prospect with a personalised message targeted to that specific stage in the buying process.
Later on, the same campaign automatically sends out messages targeting later stages of the buying process. This is done in order to test and see if the person has moved on in their buyer’s journey.
It’s a prerequisite that you have different messages for each phase of the buying process. By doing so, you are able to take each prospect all the way on their buyer’s journey to the ultimate destination of a purchase.
At some point, it’s time for the sales representative to contact the prospect. This specific stage is also something you need to predefine from a set of criteria.
The key to success is automation
If you want to practise this form of modern marketing then automation is your key to success. Automation requires an IT solution that collects information on an individual level, monitors it on the basis of a set of predefined criteria, and is able to send out personalised email messages.
This is not something you do manually as it’s simply too comprehensive.
To practise and carry out personalised, relevant and timely marketing, you need Marketing Automation.
The Marketing Automation tools
The most important concept of Marketing Automation is Lead Nurturing Flow. This is all about nurturing a potential customer and exposing him or her to relevant messages that can be implemented automatically.
Another concept is Lead Scoring, which identifies and qualifies the leads for the sales representatives.
Lead Nurturing Flows
Prospects often require nurturing more than once before they become qualified leads.
Research shows that if you automate your Lead Nurturing, the number of sales qualified leads grows by 64 %. Another benefit of Lead Nurturing is that it increases collaboration between sales and marketing.
On average, sales only follow up on 20% of the leads they receive from marketing. They disqualify 70% of these leads due to lack of sales potential. The problem is that 80% of the leads discarded by sales, end up buying a product (probably from the competition) within 2 years. Source: Grande Guide to Lead Nurturing.
This only emphasises the importance of keeping up the pressure on the prospect throughout the process – from initial contact to the stage in their buyer’s journey when they are ready to talk to a sales representative.
This is done by a series of instigations. Keeping yourself constantly updated with a specific prospect is, for most companies (and in particular the sales organisation), a task that is both time and resource intensive. That’s why it’s a process that needs to be automated.
Lead Nurturing is the denotation for predefining a series of e-mails to which the prospect is exposed over time. These can be based upon a set of conditions. For example, a prospect is only sent the next e-mail when he or she has read the first. It’s also possible to send out different e-mails, depending upon the actions the recipient has or has not taken.
When your Lead Nurturing Flow is defined, several options exist for how the prospects can enter the flow:
1) You can add them manually, as you would in a traditional campaign
2) You can set up a form that automatically adds them to the flow when they fill out the form
3) And most importantly, you can set up criteria for your segmentation and let the Marketing Automation solution monitor when a prospect fulfils the criteria and then automatically add them to the flow
Lead Nurturing flows enable you to engage your potential customers with relevant content, such as white papers, videos, blogs, webinars and more. Of course, it’s important that the content is related to the customer’s area of interest – and that it’s delivered at the right time.
If you successfully build a Lead Nurturing engine, it will be your main facilitator for automatically building brand loyalty. This is done long before the prospect is even ready to make their first purchase.
And this is highly relevant. By continuously nurturing your prospects with relevant content, you evoke a latent need, which substantially increases the conversion rate in the buying process and creates qualified leads.
Lead Nurturing also accelerates existing sales opportunities as it feeds them the information they need to progress in their buying process.
Now we are able to talk about Demand Generation. This is an expression that is used to describe the creation of demand for a purchase. It is achieved by practising targeted marketing campaigns that create knowledge and interest in the company’s offering.
Demand Generation is a natural evolution of traditional Lead Generation.
Demand Generation has to be personalised, relevant and timely. You need to understand the interests of the prospects, their behaviour and their current stage on their buyer’s journey. Put another way, you need to know your prospects’ Digital Body Language. That’s why Lead Nurturing is the marketing tool that facilitates a Demand Generation strategy.
With Marketing Automation Sales and Marketing work together
When you’ve gained insights into your customers’ online behaviour from their Digital Body Language and you’ve built effective Lead Nurturing Flows that guide your prospects through their buyer’s journey, you need to qualify and specify the leads to focus on. This is where Lead Scoring becomes highly relevant.
A classic example is that marketing considers every form submission as a lead. This includes form submission that gives access to a white paper or if the prospect has registered for a newsletter. The lead is then handed over to the sales rep who calls the prospect but is turned down as the lead is not ready to receive an offer. Of course, they’re not. If you think about the buyer’s journey, you’ll remember that the prospect is only in the initial stages.
The sales rep, upset and angry, turns to marketing and the ongoing ‘fight’ between marketing and sales begins once more. Sales complain that the leads they receive are unqualified and marketing points the finger at sales for not following up on leads.
In the old days, all form submits were considered leads. Today we realise that they are not.
Lead Scoring means defining a set of criteria that need to be fulfilled before a person can be called a lead or prospect.
At the very start of a Marketing Automation project, marketing and sales agree upon the criteria for a lead. This ends the eternal discussion between marketing and sales as marketing is assured that sales will follow up on the leads given and sales know that the leads they receive are qualified. It’s that simple and extremely effective.
One of the biggest BtB research organisations in the world, Sirius Decisions has analysed the impact a Marketing Automation solution has on the collaboration between sales and marketing. They reached the conclusion that with a Marketing Automation solution the number of leads from marketing is divided by 20 while the leads acceptance rate from sales is multiplied by factor 10. The share of leads that turn into quotes is multiplied by four and the sales representatives’ win rate increases by 25%.
What does this mean? In short, it means that fewer leads are passed on from marketing to sales, but the leads received by sales are better qualified and more likely to convert into a purchase.
Research from Forrester has shown that 83% of CMOs consider their highest priority to be increasing and improving the quality of leads handed over to sales.
In other words, the biggest source of unexploited potential in most companies lies within the collaboration between marketing and sales.
Lead Scoring is the tool that is used when marketing wants to identify the most promising leads to hand over to sales. Similarly it is used to identify the leads that need additional nurturing. Read the Grand Guide to Lead Scoring here. (LINK)
Closed Loop Reporting
You now have a well-established marketing setup with effective Lead Scoring and Lead Nurturing. You have an overview of the marketing sales funnel and an unbroken chain from the initial contact with the prospect, through the Nurturing Flows until they become a qualified lead, through the sales process and ultimately resulting in an order.
Now you can calculate the profitability of your marketing investment, Return on Marketing Investment, also called ROMI. The tool for this is Closed Loop Reporting and it calculates how much has been invested in a campaign in relation to the turnover the campaign achieves.
This might sound relatively simple, but it’s not. What makes it complex is that you need to create an unbroken chain and consider all the related elements in the calculation. But if done successfully, it proves the accountability of your marketing organisation.
Marketing organisations that aren’t able to document the accountability of their activities are currently experiencing budget cuts and a reduction in the number of employees. Research from Sirius Decisions shows that 73% of all CEOs feel that their CMO lacks credibility with regard to generating revenue. Put bluntly, if a CMO is not able to account for his or her marketing activities, it could ultimately end up costing them the job.
Another important benefit of Closed Loop Reporting is the data it provides on the sales pipeline. You’ll get valuable insights into the sales process from a very early stage for a precise sales forecast.
The Marketing discipline within Marketing Automation
The entire concept of Marketing Automation is Inbound Marketing. The opposite of Inbound Marketing is Outbound Marketing, which is defined by reaching your audience through printed mass send outs, ads, radio commercials or telemarketing.
For today’s buyer, that is not enough. We’re not claiming that you need to abandon traditional ways of marketing, but they are not as relevant as they used to be.
Our world is becoming increasingly media saturated and marketing strategies that seek to convince the consumer by interruption and repetition are simply ineffective. Modern day buyers block out Outbound Marketing initiatives.
Inbound Marketing is about making the consumer find you. A requirement for this is interesting, engaging and relevant content. It’s closely related to ‘Permission Marketing’, where you only communicate with potential buyers who have given you their permission.
It’s the consumer who accepts that they will receive content from your company. Of course, you are only allowed to send them messages if they have given you their explicit permission. Plus it’s only relevant to send out an e-mail if it’s personal, relevant and timely for the recipient.
That brings us to Content Marketing
Content Marketing is all about promoting your company through content. This is a marketing approach where you create relevant content that adds value for your targeted audience and engages them in your offerings and company. You communicate with your prospects with no promotional messages. You advise and inform on topics that are relevant and interesting for your target audience. In return, they reward you with their attention.
The essence is to continuously give your target audience relevant and value adding information. This will ultimately result in increased brand value and loyalty, and ultimately a purchase from your audience.
It’s a marketing discipline that prohibits the traditional sales patter and instead focuses on dialogue with existing and new customers.
A flood of different marketing channels exist for the execution of Content Marketing: social media, newsletters, magazines, blogs, webinars, microsites, reports, white papers, videos and many more.
Roper Public Affairs carried out a survey that showed 80% of decision makers prefer to get information about a company from articles rather than ads. 70% said that Content Marketing makes them feel closer to the company. Finally, 60% said that the content produced helps them take better product decisions.
Content Marketing doesn’t just create direct sales opportunities, it also makes a significant contribution to the digital footprint. From the content your potential customers’ consume, you can gain greater insights into their interests and status.
Today, digital sets the agenda. Buyers and consumers expect companies to actively engage, communicate and nurture them when relevant – relevant for the buyer that is.
We’ve emphasised the words and terms “personalisation”, “relevant” and “timely” several times in this article. To succeed with modern marketing, this is the path you need to take.
As a company you need to have the insights on your customers so that you dynamically can serve your audience with modified campaigns and messages and content that relates to their specific needs.
Marketing Automation is the IT-tool that supports all your marketing processes. This includes Demand Generation, Digital Body Language, Lead Nurturing and Lead Scoring, which will yield additional sales and help you to understand your customers buying process and guide you to maintain and obtain new customers.
Processes are optimised, conversion increases and it is all accountable. You now have the tools to show management what marketing generates of revenue.