Marketing Automation and Lead Management Blog

When marketing automation goes awry

Some time ago I reviewed an RFP for Marketing Automation. It included items which immediately signaled to me that the company in question may be headed down a path that would drive them crazy. Here are some of the sample questions from the RFP:

• Must provide the capability to identify all the lists a given contact is on
• Requires list permission management
• Must be able to set time based usage limits for a list. For example, maximum usage is once every 2 months

Do you recognize the pain this company will face if they go down this road? What they want is data entitlement and fatigue management functionality, but they are going after it by looking for a vendor that accomplishes this via static lists. "That's gonna hurt!"  An example will help explain why (or perhaps you already know the pain). Let's start with how it should work.

Effective Marketing Automation System:

Let's say you are going to roll out a webinar program. You will email an invitation to a list, have the webinar, and update your database. In the process you create a production list for folks you want to invite, a seed list of internal people, and an exclusion list of people you always want to exclude (all competitors, leads marked as junk or disqualified etc). The list segmentation to build these lists only has to draw on contact records for all the information needed to build lists. And if you want to set up a fatigue rule to control how often someone can be emailed, you simply build a dynamic exclusion list that excludes everyone in a chosen segment who got a alternative offer in the past 10 days.

The registrations for the webinar automatically update the contact record, so a reminder email to registrants, and a last minute 2nd invitation to non-registrants can be sent automatically. After the webinar the attendees are flagged as having attended in the contact record. And you are ready to start all over again in another program! This is how Market2Lead works for instance. There is NO behavioral data (such as attended or registered) stored in static lists, because that would create pockets of behavioral data outside the contact record in static lists that have to be searched every time you build a new production list.

Ineffective Marketing Automation System structure:

For the same webinar, you had to create new static lists containing the people who registered or attended. This is where their behavioral information is stored for this event, instead of in the contact record itself. As a result, when you need to make production lists for new programs you have to segment based on the demographic data in the contact record and know all the static lists (data pockets) that need to be invoked to see what behaviors they include. Pretty soon you are going to have thousands of lists. What happens if someone accidentally deletes a list? How do you organize and maintain all these lists so you can find them? Is there any way to know what lists a contact is in?  How do new people in the organization know which existing lists to add new registrants to when they have a new response?

What the Marketing Automation RFP should have said:
The headaches would be much less for this company if the RFP read:

• Must be able to see all contact activity in the contact record including web visits, registrations, attendance etc
• Must include data entitlement to restrict marketers in one division from marketing to contacts from another division
• Must provide facility for fatigue rules so that contacts are not "over marketed"

Behavioral data, such as campaign responses,  belongs in the contact’s record, not in static lists or data cards or anywhere else. One database please. One place to look for data! FYI Market2Lead's contact record looks like this:

-Kevin

Who cares what you're selling, what are customers buying

Too often we get so wrapped up in what we are selling that we don’t pay enough attention to what people are actually buying. Sales people do this constantly. It is a useful exercise for your marketing team to compare what your website (and those of your competitors) says you are selling, to a list you create on what you believe your prospects are buying. The differences may surprise you.

I’ll go first, with the product being marketing automation.

What are people really buying with Marketing Automation?

Here is what prospects tell us they need, and what we find in marketing automation vendor websites:

• Save time, do more with less (productivity)
• An ability to execute effective automated drip campaigns (efficiency)
• A means to focus marketing budget and measure ROI (measurability)
• A way to improve the quality of leads passed to sales (quality)
• Ability to generate more leads with better response management (productivity)

And here is a perspective on what many are probably buying with Marketing Automation software in addition to the things listed above:

• Marketing accountability
• A way to justify their marketing budgets
• Job security, personal career success, recognition
• A way out of the chaos of trying to manage campaigns manually
• A way to ensure sales are following up on marketing leads
• An improved relationship with Sales
• A way to keep their data cleaner
• Early adopter credentials
• A boost for their resume and future career prospects
• Less overtime, no more working on weekends
• Best practices in lead nurturing and demand generation
• More revenue or profit
• A competitive edge
• A smart partner that will help them through a rough patch
• Buying better teamwork for geographically dispersed team members
• Buying down risk in achieving annual goals
• Head room to grow

Here are a few more thoughts, not germane to Marketing Automation. Perhaps your customers are buying peace of mind, an outside firm to blame if something goes wrong, a get out of jail free card (they are following the law – SarBox), or they are buying a better world for their children.

You could take this down to the next level and break it out by each of the four buying influence roles – economic buyer, technical buyer, user and coach. Okay, your turn, what are your customers buying? Is that how you and your sales people communicate with them?

-Kevin

How to budget For Marketing Automation Software in 2010

You know its October when the mornings get darker and damper, and the halls echo with whispered budget conversations.  The budget debates in marketing invariably settle into two areas:

• Disagreement over budget allocation between marketing groups
• Disagreement over where the budget cut line should rest

There is never disagreement on the things that clearly have to be done, nor the things that are outrageous “nice to haves” destined for the circular filing cabinet in the corner of your office. Many of us are facing flat budgets or even reduced budgets in 2010 over 2009, and at the same time there is an expectation that the company can grow next year.  This means that in order to add something new, like Marketing Automation Software, above the cut line, something else may have to move below the cut line. It is not sufficient to prove that Marketing Automation is worthy of being considered, you have to prove it is more worthy than something else!  In addition, you have to posit that it can help you increase your results over prior years’ performance.

Which Marketing Automation results will drive company growth in 2010

Mature marketing automation systems offer plenty of functionality for Inbound Marketing and for Outbound Marketing. If the bulk of the outbound marketing is in automated lead nurturing campaigns then consider that:

• CSO Insights reported that more deals closes faster, and more reps made quota when lead nurturing was involved
• Aberdeen reported that best in class companies who nurtured leads increased revenues by 28%
• Sirius Decisions’ finding that currently only 20% of Marketing leads receive Sales follow-up

So did last year’s budget spend of gazillions on awareness and lead generation, result in Sales ignoring 80% of the leads? This is something you can measure and prove for yourself if your company has a CRM. If Sales reps are ignoring many of the leads, then you have a case for automated lead nurturing.  If you shift a little budget away from lead generation and stick it in automated lead nurturing, and give the Sales folks better quality leads, the cash register will ring more often.

 B2B leads typically cost $50-$150 each to generate, whilst automated lead nurturing typically costs less than $1 per lead per year. So it is not going to take much of a decrease in the lead generation budget to add in some automated lead nurturing.  One trade show, or one direct mail campaign is all it takes. 

Perhaps last year you spent 50K or 100K on a data append and cleanup. Mature Marketing Automation software has data validation and standardization in the Inbound Marketing functionality. Perhaps you wouldn’t have to budget so much for data hygiene projects if only clean data got into the system in the first place.

The Inbound Marketing functionality with dynamic progressive profiling forms and landing pages can also result in higher productivity for your website - ie generate more web leads. So you can consider budgeting for Marketing Automation shifting dollars to more web lead generation.

Happy budgeting.

-Kevin

Untangling B2B Marketing Campaigns ROI

I’ve been preparing content for a webinar next week with NetProspex – 4 steps to measure marketing success and “ROI”. The topic is on how to measure the marketing influence on the Sales Funnel.  Because of the difficulties inherent in measuring B2B marketing campaign ROI I recommend that people focus on measuring influence instead. Here is the issue with Campaign ROI in a nutshell.

Let’s start with a definition, and examine the challenges involved in measuring it. ROI for a single marketing campaign can be computed as:

Total share of all opportunity dollars that can be attributed to a campaign in a finite period

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Total costs of the marketing campaign within the same period

The first challenge is the definition of a finite time period.

When to measure the ROI of a Marketing Campaign
So the campaign has been running a month, you sum up all the costs, add up your share of all the closed deals, and find that you have a negative ROI (at t=1 above). No surprise there, your sales cycle is 6 months or more! So you wait a year, do the same calculation at t=2, and the ROI is 10x. High fives all around. And you wait another year, and now the ROI is 25x. Pop the champagne. How do you ever decide what the real number is?  You can decide when the campaign ends, but its influence could extend out a year or two thereafter, depending on some deals in the sales pipeline. The best approach is to establish a rule for your firm and follow it for all campaigns. Something along the lines of: the final Campaign ROI will be established at 2x the average sales cycle duration after a campaign has ended. After that, no share of the opportunity dollars are attributed back to that campaign. This brings us to the second challenge - share of opportunity dollars.

Share of opportunity dollars

So if a closed won $100K opportunity can be shown to link back to 100 marketing campaigns, trade shows, white paper downloads, and website visits, do they all get an equal share of the opportunity value? Each gets $1000 credit in this case. Or are some campaigns considered more important than others (unequal weighting)? Perhaps tradeshows are worth 10x more than website visits but only 2x the value of a webinar attendance. And are webinar registrations worth less if the contact failed to attend?  This could get messy very quickly. My advice, start simple, give all incoming responses an equal share. Out-going touches (such as sent an email) get nothing. Some CRMs assign 100% of the opportunity to each campaign in their campaign influence reports – how messy is that?

Attributing opportunity dollars to Marketing Campaigns

How do you attribute opportunity dollars back to a marketing campaign? Perhaps you have gone down the path of trying to specify a primary campaign source for each new opportunity. You will probably discover, as many have, that this method is fraught with problems and is unreliable.  Most importantly, in the case of ROI, it vastly under represents all of the marketing campaigns involved in any one opportunity. So let’s start at the other end: link all campaigns to contacts and then link the contacts back to opportunities. Your marketing automation system links contacts to campaigns. Linking the contacts to the opportunities is not as straight forward. You want to be able to link all the relevant contacts on an account back to opportunities.  Some folks may choose to only link back contacts associated with the opportunity, whereas others, recognizing that Sales folks often do not associate any contacts with an opportunity, may grab at all the contacts on an account. To pull this off accurately, you will need a marketing BI engine, because for every opportunity you have to be able to connect back to every relevant contact, and attribute a share of the opportunity dollars to every campaign they responded to. The BI engine relieves you from depending on good Sales behavior for connecting marketing campaigns with opportunities.

So the top line of the ROI equation has its challenges, and we haven’t even started the conversation about cost allocation to marketing campaigns. Let’s save that for a future conversation.  In the webinar next week, I will discuss a better, more expedient method of measuring marketing influence on the Sales funnel.  Chances are good this webinar will be available as a webcast in our resource center shortly thereafter!

-Kevin