Tuesday, July 28, 2009

Marketing Automation - What does it mean?

Consistently, the term “marketing automation” is applied to our industry. I find it a term that is less than ideal when it comes to describing what the industry does, but nonetheless, the term has stuck. I often get the question of “can marketing really be automated” and I think that there’s an opportunity to clarify what aspects of marketing truly can be automated, and what aspects cannot. Also, given that the industry’s growth is surging, there’s an opportunity to look at the dynamics that are driving this desire to automate marketing.

If asked for a definition, I would say:

Marketing Automation is the art and science of automatically managing the targeting, timing, and content of your outbound marketing messages.

Let's look at why.

The Changing Buyer

First, let’s look at our buyers. Over the last decade, their ability to self-educate and manage their own buying processes has increased astronomically. Whether it is through vendor websites, analyst websites, social media, or peer reviews, buyers can acquire the information that they need in order to move towards a purchase decision.

However this transition in our buyers has meant that we as marketing organizations need to work with our buyers differently than we did previously. If we hope to facilitate their buying process, and guide them to consider, prefer, and select the products and services we are offering, we need to provide them with the precise information they need as part of their buying process.

The most critical factor is relevance. If we are able to deliver information that is relevant to the buyer’s role in the buying process, their stage as a buyer, their level of interest, and the areas of decision making of interest to them, we will establish a connection, and our message will get through. If not, our message will be lost in the clutter.

So where does marketing automation come in?

If you look at what is required, we need to first understand each of our prospective buyers individually, then we need to provide a message to them that has ideal timing and content based on their interests and stage in the buying process. This level of precision on targeting, timing, and content is nearly impossible without having a solid underlying platform to work from. The art of marketing, when it comes to creating persuasive, compelling copy, great offers, and elegant positioning cannot be automated, and likely won’t be in our lifetimes. However delivering the right selection of those messages to the right person at the right time is something that can no longer be done without automation.

Marketing Automation and Timing

Marketing automation gives us the ability to work on the exact timeframe of the buyer. This is best understood in the context of marketing initiatives like downloadable free trials. In downloading a free trial, the buyer has indicated that, at that exact moment in time, they are at the stage of their buying process where spending time with a trial is their most appropriate use of time. Your communications, as a marketer, need to reflect this buyer timing in order to best connect with this buyer.

Without automation, if a marketer is to attempt this with batch communications, the more closely one tries to align with the buyer’s timing, the smaller and smaller your batches must become, and the larger your workload as a marketer grows. Only through automation can a marketer effectively deliver a message on day 1, day 15, day 30, and day 90 to each individual prospective buyer.

Marketing Automation and Personalization

As one communicates with prospective buyers, each communication should ideally contain content that is precisely in line with their interests. The best way to do this is with dynamic content that automatically matches content to their interests. However, most prospective buyers will not explicitly declare their interests. If they do, the data is likely to be inaccurate. Marketing automation, by letting you tie web activity into buyer insight allows you to understand buyer interests based on what they do, not what they say.

On top of this foundation of buyer understanding, marketing automation gives you a platform from which to have that insight automatically personalize outbound content. Manual processes to personalize the content would quickly prove impossible, and the impact of not personalizing the content is a significant decrease in its relevance to the buyer.

Personalization and the Sender

However, the content itself is not the only aspect of personalization that impacts the buyer’s likelihood of engaging. Who it comes from is equally important. Recipients are 30% more likely, in most cases, to interact with content if it comes from a known person, rather than from a company. A marketing automation system can automatically have each communications come from the appropriate member of your sales team, building the relationship while increasing the response rate. To send your communications on behalf of 5 or 10 sales people might be possible if done manually, but to send on behalf of 50 or 100 requires automation.

Marketing Automation and Sales

As buyer progress through their own buying processes, they eventually reach the point when they would be willing to talk with someone in your sales team about pricing, contracts, or other elements of the purchase process. Knowing when they have reached this stage involves understanding their digital body language. Signs of buying activity can be seen and with the appropriate lead scoring algorithm, sales ready leads can be identified and passed to sales.

Whereas this analysis of leads has in the past been done manually or with spreadsheets, the need to identify and follow up with leads when they are most ready means that it must be done quickly. Using automation allows marketing teams to objectively and automatically score the leads in their marketing funnel in real time, identifying those that are sales ready and those that are not. Those that are not yet ready can be kept warm over time through lead nurturing, again a process that automation greatly facilitates.

The New Importance of Data

What we’re seeing in the above discussion is a shift away from batch communications that are not highly differentiated to true one-to-one personalization. However, as we do this, and we have marketing automation platforms, rather than people looking at the data to make decisions, the importance of data quality takes on a new priority.

Data, in order to be used by rules for personalization of content, segmentation of lists, and scoring and routing of leads, needs to be clean and consistent. Marketing teams are being tasked with ensuring this consistency is maintained at all times, even though marketing data may be touched by web forms, list uploads, CRM synchronizations, or sales input. The only way to consistently and constantly maintain a clean and standardized set of data is to use automation to manage marketing data quality in-line within the marketing database.

What Can’t be Automated?

Marketing remains as much art as it ever has been, even as the new buyer requires elements of science in automating how the targeting, timing, and content of a message is delivered. Compelling offers, captivating visuals, great positioning, and elegant copy are as difficult as ever to create. Likewise, the understanding of market segments, buyer journeys, stages of a buying process, and what moves a buyer along their buying process still differentiate excellent marketers from merely good marketers.

However, as today’s marketers shift from outbound messaging to understanding a buying process and facilitating it, they can only do so if enabled with a platform that automates the conversations, timing, and personalization needed. That is where marketing automation comes in.
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
In my day job, I am with Eloqua, the marketing automation software used by the worlds best marketers
Come talk with me or one of my colleagues at a live event, or join in on a webinar


David Raab said...

Steve, this is an excellent description of the factors driving marketing automation. My only quibble is that your definition is explicitly limited to "outbound" messages. Inbound messages such as personalized Web pages and scripts for phone and online chat agents are an important part of managing the buyer relationship. The marketing automation system should certainly coordinate them with outbound messages.

I'm also surprised that your definition leaves out other key functions that you mention later in the post, such as lead scoring and CRM integration. The www.raabguide.com site has several (free) papers that describe this broader vision of marketing automation in more detail.

Steven Woods said...

that's a great question, and of course there would be minimal need for marketing automation without a heavy focus on driving the inbound interest that makes inbound marketing so crucial in today's world. However, the things that a marketing automation system allows you to control are the outbound messages. In order to define the targeting, timing, and content of those messages, you MUST be inately aware of the prospect's interest, as evidenced by their engagement on your web properties - classic inbound marketing.

I think of inbound marketing and marketing automation as intrinsically linked, but not the same. Inbound marketing is a marketing approach where you "seek to be found" through social media, search strategies, etc. Marketing automation allows you to leverage the fact that you have been found, understand buyer interest, and personalize your entire interaction with them.

In terms of lead scoring, yes, it is obviously a critical technique. However, at the end of the day, I view lead scoring as an approach to understanding buyers - which is a necessary part of the definition. Without using scoring to identify area and level of interest, it is difficult or impossible to define the right targeting and timing for your content.

David Raab said...

Poor choice of words on my part -- I forgot that 'inbound marketing' has become a buzzword in its own right, mostly meaning Web traffic generation.

I was actually referring to later, personalized interactions such as deciding which offers to make on a personalized Web page or in a telemarketing script. It's pretty common for marketing automation systems to preselect messages for individuals and push them to those channels, and some systems also will select messages in real time as an interaction progresses. The most obvious example (although it deals with buyers rather than prospects) are cross sell and upsell recommendations.

I know your vision encompasses much more than just email messages, which is why I was puzzled to see your original definition limited to 'outbound'.

Steven Woods said...

Interesting - yes, some of the phrases tend to take on lives of their own. "Inbound Marketing" seems to really be starting to be specifically bucketed as blog/seo/viral-oriented content marketing for discovery.

That's an interesting point on whether offer recommendation on a call script or through a banner are things that the average marketer thinks of under the umbrella of "marketing automation". Not sure, but a very good question.

Adrian Chang said...


I'm going to come back to your ending statement to get your opinion as to how marketers should sell the shift that they are going through to 'requesters' - field marketers, brand marketers, campaign planners whose request delay this critical shift from occuring in many organizations. The requesters in my experience are in the position of power when it comes to forcing marketing's hand in pushing out outbound tactics to drive demand, and powerless when it comes to refusing investment and interest from either channel partners or the product teams themselves.

We had requesters in my inside sales days at a large technology company. The requesters created the 'sales plays' - product focused sales tools to support sales, call sheets to sell the value of the product into larger organizations and lists generated by either the customer's install base or perceived fit. I've heard more dial tones and voicemails with this approach and I would consider myself to be among those who could carry their territory. Sales executives started to adopt the notion of go-to-market strategies and adding a 'solution spin' to a combination of products, stating that it would be the way to drive incremental revenue. However, during sales cadence with my managers and conversely the way in which requesters were hired and fired centered solely around traction on pushing and tracking traction with products.

You can imagine it is very easy for marketers to remain in 'batch and blast' mode primarily due to the fact that they must respond to the volume of rerequestors who in turn have to feed others either within or around the organization. This for me leaves me with a few questions. How should marketers turn the corner with these folks and sell them on automation? How can marketers serve sales and also serve the "requesters"? Is scoring a piece of the puzzle to please all parties?

Jep Castelein (LeadSloth) said...

Steve, I agree with your analysis, and I think it also applies to relatively simple scenarios. You focus mainly on complex scenarios to emphasize the need for Marketing Automation, e.g. sending out email on behalf of up to 100 sales people. But even a small company quickly sees the limits of plain email marketing and basic web-to-lead-forms.

I feel a big bottleneck is data quality. Basic web-to-lead does not allow progressive profiling, or proper deduplication. And after a prospect filled out a form, you'd like to add his web visits to the database: very hard to do without marketing automation. And for email marketing: how to send a webinar reminder _only_ to people who have not registered yet. This is possible, but just a lot of work because you need to pull the data from the CRM system.

So having a single repository with all relevant information about your prospects is making life easier for even the smallest B2B marketing organization.

Steven Woods said...

Good point that a centralized database is a key underpinning of marketing automation. Without consolidated, clean, and standardized data, it is really not possible to get a good view of buyer interests at all stages of the buying cycle. Agreed, that this is relevant at all sizes of organizations (at least those big enough to truly have a marketing function).

Adrian, that's an interesting observation on where the "drive" comes from. That dynamic, like any operational metrics, can really drive behaviour in the wrong direction if one is not careful...

Anonymous said...

@Jep Agreed on Automation for even small b2b shops. The longer your sales cycle, the more you'd like to know about your prospects. Additionally if your customers have a lot of repeat business, in one category, it would be great to push them into buying in another category. (Think consumables kits).

My take: since the "information gatekeepers" are unnecessary these days, any tools that can help marketers deliver timely infor are needed, whethere through outband or inbound techniques. Maybe it is time for a new word. I think that there are still many marketers that are in the dark, and do not realize that marketing is no longer in control of the message and the timing.