Is Marketing Automation Worth the Hassle? New Data Raises Questions

Thinking about investing in marketing automation?

Before you get too far, take a look at a series of new studies of marketing automation and its effectiveness. The links to the studies and analysis are below, but here are the two key takeaways from the data:

1. Results Often Don't Justify the Investment -- Marketers are finding that marketing automation frequently does not produce the results needed to justify the significant investment of time and money it requires.

2. People Who Buy it Rarely Use it Fully -- Most marketers who invest in marketing automation buy more than they use -- they become overwhelmed by the complexity, never fully set it up, and never take advantage of everything it has to offer.

The Promise of Marketing Automation

We all know about the promise of marketing automation: It's the promise of powerful personalized marketing like Amazon.com. 

Marketing automation that marketers dream of organizes the data their prospects share, then uses that data to provide those prospects with the right content and the right interactions at the right time to help close sales.

In the marketing automation dream, the buyer gets a simpler, more consultative sales process, and the seller gets a more efficient (cheaper, quicker) sales process that results in better customers. 

The Reality of Marketing Automation

Of course, as the new data makes clear, that's just a dream for most marketers. Let's dig into the problems marketers are encountering.

1) Effectiveness 

David Raab explored this issue in depth in a post, "Marketing Automation User Satisfaction," on his blog last week. The post pulls together new data from G2 Crowd, Ascend2, and B2B. As David shows in this chart he created from the Ascend2 data, marketers found marketing automation tactics relatively ineffective for the effort they require. In contrast, inbound tactics like blogging and SEO had better results for the investment required.

Why do so many marketers report problems with marketing automation effectiveness? Many of the marketers I speak with have mistakenly invested in marketing automation before building up a sufficient funnel of traffic and leads to automate. If you’re only getting a trickle of leads each month, you’re not going to get any value out of automated email sent to that trickle of leads. You'll get a lot more bang for your buck if you focus on turning the trickle into a firehose.

List buying is another common problem that I see frequenly. Many marketers with only a trickle of organic traffic and lead flow try to generate leads for automation by buying lists. It’s obvious why this approach doesn’t work: People hate spam. Contacts that you have no relationship with are unlikely to responding to a cold email.

2) Setup

In an earlier post, "Which B2B Marketing Automation Features Actually Get Used," Raab analyzes new data on marketing automation features used. He cites recent studies by Holger Schulze, Aberdeen, Winsper, and Gleanster. Data in each of these studies indicates that many marketers are only implementing basic email functions in their marketing automation platforms. Raab summarizes the data in this table that normalizes the results from each study (100 indicates the feature most frequently used):

What’s going on here? I think the easiest way to understand the data is to do a trial of a stand-alone marketing automation platform. As soon as you begin to scratch beneath the surface of the marketing automation promise and actually use marketing automation software, you'll see how difficult marketing automation can be.

Many marketers are finding the hours of setup and training required aren't worth it. Instead of investing tons to get a small conversion rate improvement on a modest lead flow, they're deciding they're better off putting their time and money into top-of-the-funnel tactics like blogging, social media, and SEO that can generate significant net new lead flow, then follow up with marketing automation that's part of an integrated marketing platform.

So what should you do?

Make sure you think through a marketing automation investment carefully. Here are some important questions to ask yourself:

• What’s the goal of your marketing automation investment? Usually it’s to convert more of your leads to customers, with the ultimate goal of driving more revenue.

• Are all the customers you need to sell to in order to hit your revenue target in your database right now? If not, you're going to have to generate some new leads. What's your plan for generating those new leads?

• Are you currently getting enough new leads each month for marketing automation to have an impact on your funnel? If not, what is your plan to generate those leads? Keep in mind that marketing automation is not going to have an impact on your business until you get them.

• What kind of marketing automation campaigns can your staff currently support? Make sure you're planning for the software setup, training, integrations, campaign planning, content development, and ongoing management required of any stand-alone marketing automation platform. 

• Have you done sufficient testing of the marketing automation platform you're planning to use? Make sure you request trials of any platform you're considering. Trials will help make setup and implementation challenges clear.

Today, many marketers are asking themselves these questions and finding that they need to make an investment in their full sales and marketing funnel. They're finding they need to start at the top of the funnel by generating traffic and leads with blogging, SEO, social media, and landing pages, then integrate marketing automation with these campaigns once they start generating significant lead flow.

Is marketing automation ever a good idea?

Absolutely. The promise can be kept! Marketing automation can be a fantastic tool to help a company with lots of leads nurture those leads across multiple channels (not just email), then prioritize the right leads for sales to engage. 

But it's not a panacea, and it's not right for many companies. So make sure you ask the right questions and avoid the marketing automation pitfalls other marketers have fallen into. 

Image credit: BAMCorp