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Marketing Automation: Where To?
Marketing automation applications have finally gotten off the ground, but is the direction they're headed really where we want to go?
For the rest of the March 2000 issue of CRM magazine please click here
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Nearly a year ago, I wrote in these pages about how the new generation of marketing automation applications was creating a "revolution" in CRM software. Following on the success of sales force and customer service automation, successful marketing automation promised to be the final piece of the puzzle in constructing a picture of the twenty-first century front office. Industry hype, venture capital enthusiasm and the vendors' own exuberant marketing did set some unrealistic initial expectations. But gradually we are now seeing organizations implement these applications.

Two years have passed since the wave of publicity started for marketing automation, and where are we now? Can companies take the applications and establish a closed-loop feedback process between themselves and the customer, with leads going from marketing to sales and the progress made on leads by sales feeding back to the marketing system for continuous monitoring and lead assessment? Can this process drive an assessment of which marketing activities work and which ones don't, attach a real ROI to marketing expenditures and free up sales to pursue only the opportunities worth pursuing?

Not quite yet. But even as some companies succeed in taking marketing automation in this direction, is this really the ideal end game for marketing?

"There is a big gap between what companies are using marketing automation applications for and what companies need to do to thrive as e-businesses."

Internet Transforms Marketing
The above questions are perfectly logical, but they imply that twenty-first century marketing though "neater," more organized and more accountable is still largely at the service of sales. Companies should also ask themselves what they expect to look like as the Internet and e-business transform their industry. Yes, we've all been subject to quite a bit of Internet hype. But even a modest consideration of the Internet question would lead to defining marketing's role as much more than providing better leads for sales and using the Internet as another source for leads which is what most marketing automation systems do now.

There is a big gap between what companies are using marketing automation applications for (automation of lead management, basic Internet campaign activity and some marketing activity workflow) and what companies need to do to thrive as e-businesses. While most marketing managers I speak to certainly wish to streamline their current processes and achieve better response, ultimately, they want to take things a step further by:

  • Touching the customer more frequently and in a more measurable manner
  • Analyzing customer information across channels and leveraging it more quickly
  • Synchronizing communications between online and offline channels
  • Understanding the customer in a truly individualized manner in order to deliver the most personalized communications.

All this pays off not just in more leads and short-term sales, but in the effective management of relationships for long-term retention and future sales, which is becoming every bit as important as generating and managing immediate opportunities. While there are certainly companies in this healthy (for now) economy who can continue to watch the orders come in and "crack the whip" on marketing once in a while to crank out leads when goals need to be met, the reality is that marketing has a crucial role to play in partnership with other customer-facing functions like sales and customer service in managing long-term relationships with key customers.

still Taking "Baby steps"
Marketing automation vendors would argue that they are capable of helping marketing departments take a more enlightened e-business role, and that it's not their fault that companies are still taking tactical "baby steps" with their products. At the same time, these vendors know that there are gaps in their products. In particular they realize the need to provide deep yet timely data analysis and more flexible pricing and services.

Through partnering and some recent acquisition activity, we are finally seeing this start to happen. One of the marketing automation pioneers, Rubric, was acquired in late 1999 by Broadbase, a data mart platform vendor. And E.piphany, another analytic platform vendor, acquired Rightpoint, a provider of real-time personalization solutions for online and offline channels. In light of this industry activity, the two points noted previously are worth exploring in slightly more detail below.

Deeper Analytics There's much more that could be done with information acquired through the Internet and other channels. Analytic platforms, used historically to provide deeper reporting for sales and customer service systems, can be used to drive a much deeper and more timely understanding of leads and existing customers, so that succeeding waves of communications from marketing and sales are more effective. The success of Broadbase and E.piphany, though relatively young companies themselves, is partly due to their analytic capabilities.

Flexible Pricing and Services Marketing in many companies is assuming increased strategic importance, but does not have the dollars on a one-time basis to invest in large enterprise software licenses, nor does it have the IT department to help it out very often. But the marketing function often has significant amounts of discretionary funding that it must somehow spend wisely to get closer to the customer, and it also needs help in leveraging its investments. As a result, marketing automation vendors have started to price their products and services on a monthly fee basis, essentially acting as service providers and even providing consulting. The greater consultative role can also help companies as they look at bringing together offline and online marketing activities and attempt to consolidate their views of the customer.

So, marketing automation is getting more powerful and more relevant to companies. But beyond this, the marketing automation vendors are also learning that they need to respect and really understand the professionals who will actually be using their products. Some early approaches to selling marketing automation systems implied insultingly that marketing folks were running amok with little accountability or true understanding of the customer and that the vendors' products were magic tools providing never-before-seen marketing insight.

While marketing is clearly in need of improvement at some organizations, in reality our experience with marketing professionals shows that most of them, even at the smallest and most unstructured of organizations, have a fairly good handle on the scope of their activities, manage limited resources in amazingly creative ways and have a stronger understanding of their customers than they're given credit for. What they'd like to be able to do is ramp up their activities, move beyond tactical customer acquisition, leverage information from multiple systems in a timely fashion and use the Internet in conjunction with other channels to establish closer ties with key customers. As marketing automation grows up, it may just be able to empower professionals to accomplish these things and make the case for marketing as a key driver of e-business.

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