Marketing automation is a category of technology that allows companies to streamline, automate, and measure marketing tasks and workflows, so they can increase operational efficiency and grow revenue faster.

What Is Marketing Automation?

IDC predicts that the overall market for automating marketing will grow from $3.2 billion in 2010 to $4.8 billion in 2015.

Three key trends have been driving companies to adopt the technology.

• Changing buyer behaviors forced companies to change how they market and sell.
• The 2008 recession permanently altered how companies approach revenue generation and measurement.
• The software-as-a-service (SaaS) delivery model made the technology available to many more companies than ever before.

Marketing automation software is used in many modern marketing processes, including lead generation, segmentation, lead nurturing and lead scoring, relationship marketing, cross-sell and up-sell, customer retention, and marketing ROI measurement.

Some of these practices are possible at small volumes without software, but technology becomes essential with any scale. In particular, these processes all require:

• A central marketing database. A place for all your marketing data, including detailed prospect and customer interactions and behaviors, so you can segment and target the right message to each customer. Think of this as “system of record” for all your marketing information.
• A relationship marketing engine. An environment for the creation, management and automation of marketing processes and conversations across online and offline channels. Think of this as the orchestra conductor for your customer interactions.
• An analytics engine. A way to test, measure, and optimize marketing ROI and impact on revenue. Think of this as the place you go to understand what worked, what didn’t, and where you can improve.

For a more in-depth definition download our eBook: What is Marketing Automation?

Basic Marketing Automation Workflow

What it is not:

1. A fancy name for email marketing – Not even close. Like the term suggests, marketing automation encompasses marketing campaigns across all channels—from direct mail and phone campaigns to online and social initiatives. What’s more, it combines robust, insight-focused capabilities from your CRM, lead management system, web analytics platform, and other systems to create something that’s more than the sum of the parts.

2. A way to send spam – Like anything else, the technology delivers results based upon how you use it. Yes, it can be used for bad marketing, like spam. But it can also be used for exceptional marketing that truly connects with customers.
3. A solution that only benefits marketing  – Yes, the marketing department benefits from marketing automation. But high-quality usage ultimately is about increasing revenue. When you think about it, that’s how things should be.
4. A solution that delivers value without effort – If only you could just buy marketing automation technology, then sit back and watch the results produce themselves. But no. To deliver, it requires a comprehensive strategy that integrates the right processes, people, content, data, and more.

Who Uses Marketing Automation?

Large enterprises have long found value in the technology, but marketing automation isn’t just for big companies. In fact, Small and Mid-Sized Businesses (SMBs) make up the largest growing segment in the space right now. And thousands of companies even smaller than that are using automation as well. Similarly, companies across all industries are using it. The early adopters were primarily in “business-to-business” (B2B) industries such as high-tech / software, manufacturing, and business services. But increasingly companies across all categories – including “business-to-consumer” (B2C) industries such as healthcare, financial services, media and entertainment, and retail – are adopting the software for its real-time, relationship-oriented approach to maintaining and extending customer relationships.

What are the Common Features and Functions?

Features include email marketing, landing pages and forms, campaign management, relationship marketing, prediction and scoring, lead lifecycle management, CRM integration, social marketing capabilities, and marketing analytics.

What is the Value and ROI of Marketing Automation?

Companies can expect three core benefits: more pipeline, more productive Sales reps, and higher revenue, as found in the Marketo Benchmark on Revenue Performance (as of Sept 15, 2012 n=489).

Furthermore, according to Nuclear Research, 95% of companies reported some benefit from marketing automation. They found that companies can expect to achieve an increase in marketing staff productivity between 1.5 and 6.9% and increase sales productivity by an average of 4%.

How Much Does Marketing Automation Cost?

According to the IDC 2013 Marketing Planner, marketing automation investment takes up 3.1% of programs budget and 1.6% of staff allocations at large technology companies.

The main factors that drive the cost of your subscription are:

1. The number of leads and contacts in your marketing database.
2. The functionality in the edition you purchase.

Most solutions do not typically charge for each marketing user, and provide access for an unlimited number of emails (within reason). Many vendors also have an additional per-seat charge for named Sales users to get insight and action inside the CRM system.

How Can I Maximize My Success?

While there are important differences between different vendors, success is often primarily determined by three things:

1. Your strategy and process
2. Your content and lead flow
3. Your people

With limited investment in these areas, you can usually get good (but not great) ROI from marketing automation. But the more you work on each of these areas, the higher you move up the curve, and the better your return on investment.

The key is to “think big, start small, and move quickly”. In other words, the best results usually come from getting started with what you have today, and then incrementally investing over time to move up the curve.