Friday, October 22, 2010

Tailwinds for Marketing Automation Software - Insight from CRM Analyst Lauren Carlson

In a recent blog post from Software Advice's Lauren Carlson, this emerging CRM analyst indicates how hot the market for marketing automation software has become,  and although the niche was timid several years ago, marketers are now adopting these systems aggressively.

These tailwinds for marketing automation solutions indicate a headwind for marketers, who are actively seeking solutions to help solve an increasingly challenging B2B sales environments.

We have written about some of these challenges for marketers, in the blog post "The End of Marketing as We Know It", and how the next decade in marketing will be defined by:
  • Buyers suffering from information overload - with more channels than ever to connect with buyers, and lower cost channels making outreach easier, marketers have been inundating prospects with more marketing messages than ever. The result, more noise and less engagement.
  • Internet fueled buying cycles - research by IDC and Sirius Decisions both indicate that sales professionals are being engaged later and later in the buying cycle, if at all. With more information available, and growing skepticism in vendors, buyers have taken control of the purchasing cycle.
  • Frugalnomics - in the face of two successive significant economic downturns over the past decade, buyers now demand proof of bottom-line impact and highest value from each and every purchase.
Lauren illuminates several of these trends, and provides insight into several more important trends that we see pushing buyers towards adoption of marketing automation. Her insight includes:

Buyers want content of real value
Traditional pamphlets and brochures filled with marketing jargon just don’t cut it anymore. Buyers are looking for informative and interesting content that provides actual value and education. They expect vendors to provide them the content they need throughout the sales cycle. Increasingly, the first two-thirds of that cycle is spent researching the market and vendors, without regular contact with a sales rep. To remain top of mind with the buyer and claim the “thought leadership” position, marketers are deploying marketing automation to provide a steady stream of educational content for buyers.\

Buyers are increasingly wary of sales pitches
One of the biggest issues sales professionals face when engaging with prospective buyers is a declining level of sales engagement. This is often because the buyer is just getting started on research, overwhelmed with competing priorities and not ready for a sales pitch. Also, when the economy is poor and money is tight, consumers become much more skeptical of sales people making big promises. Compound that with a macro trend away from the phone and toward email and the web. As a result, sales and marketing teams are facing the challenge of selling to buyers who won’t talk to their sales team. Delivering the right content over time is a great way to “warm up” buyers until they are ready to talk to sales.

Desire for marketing accountability
Marketing has traditionally been somewhat of a “black box” expense for businesses. While development could be measured on release cycles and product quality, and sales was measured on performance against plan, It’s tough to track marketing’s ROI on positioning, collateral and brand building. B2B marketers have traditionally gotten off easy in terms of strict accountability, but were often the first budget to get cut and were sometimes looked down upon by more accountable departments. Marketing automation empowers marketing to define its contribution to the sales pipeline, tracking each sale back to one or more marketing campaigns.

Sales cycles are longer in a down economy.
Under adverse economic conditions, buyers are less inclined to purchase – plain and simple. Even when there is a clear business challenge and a solution with real ROI, tight budgets create hesitation on the part of the buyer. Therefore, sales professionals are faced with increasingly risk-averse prospects whose buying time frames are longer. Marketing automation tools supporting drip marketing campaigns and lead nurturing can build relationships with buyers during a longer sales process.

B2B sales processes are becoming “consumerized.“

According to Peter Sondergaard, SVP at Gartner, consumerization is a significant trend that will affect enterprise IT purchasing this decade and beyond. What does that mean? Business buyers are demanding that their enterprise purchase process be simplified to match the consumer purchases they make in their private lives. They demand coherent pitches, simplified pricing, rapid implementation and ease of use. Moreover, they don’t want to have to interact with sales every time they want information. Marketing automation plays a critical role in supporting self-service sales interactions.

Marketing channels have changed and grown

The Internet has vastly changed the way we communicate. It has also changed the way companies market. There are more channels to reach customers – email, microsites, social networks – and businesses must develop more cohesive marketing plans. Marketing automation allows companies to ensure a coherent, unified marketing approach by tracking these various marketing channels in one system.
SaaS systems are greasing the skids

Given the number of relatively new entrants into the marketing automation market, almost all of these systems are built on a modern, software as a service (SaaS) architecture. This has reduced friction for early adopters. Buyers have been able to get up to speed and start demonstrating value far more quickly than early adopters of sales force automation (SFA) and call center software in the 1990s. Moreover, subscription pricing has enabled marketers to add a digestible monthly or quarterly line item into their budgets, rather than seek approval for a costly capital expenditure for on-premise software.

The Bottom-Line
The defining forces of the past decade in marketing have changed, where the leverage of new and exciting channels to reach B2B buyers have both empowered and inundated prospects, and macro-economic conditions have created Frugalnomics. The next decade will be defined by marketers in a fight against marketing fatigue, sales disintermediation and Frugalnomics.

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