Revenue Marketing: Transitioning from Cost Center to Revenue Driver

by Dan Freeman 
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Modern marketing is no longer an intangible, creative endeavor; it produces tangible and measurable results. Today, revenue can be traced back to marketing activities and touch points; not with exactitude, but with enough precision to steer an organization’s strategy towards its most profitable marketing activities and to avoid those without much payoff. Because the revenue impact of marketing is now intelligible, companies are less willing to put money into marketing’s black box and hope sales happen. Increasingly, the marketing department is expected to perform as a revenue generator, not a cost center.

But making the transition from cost center to revenue engine is not easy. It’s a gradual process, one that can take two to three years to accomplish, and requires ongoing investment in marketing technologies as well as in the data, content, and business processes that enable these technologies.

The good news is that at each stage, you will see a significant and measurable impact on your marketing results. Learn the four stages of transformation from basic, cost-centric marketing to revenue driven marketing and discover the key differentiators of each stage.

Basic Marketing

At this stage, a marketing department follows a checklist of activities, but none of these activities are effectively monitored for results. Sure, there are “must do” activities—the website, email marketing, a social media presence, and trade shows, for example—but these are mostly dictated by historical precedent and there is only a hazy idea which of these activities produces results. Instead of hard data that provides real insight into the effectiveness of marketing actions, the focus here is on activity itself. Marketers speak in terms of spending and outlay rather than expected response rates and revenue impact. At this basic stage, marketing is a cost center where anecdotes, theory, and history—not hard data—support the decision on the marketing spend.

Lead Generation

As the marketing department realizes that activity alone is not enough, attention shifts to strategies that generate leads for the sales team. At the lead generation stage, budgets shift from activities whose results are purely theoretical to those producing tangible results—leads. The nascent awareness of which marketing channels and techniques produce tangible leads is a significant leap beyond basic marketing. At this stage, companies concentrate on developing content, attracting visitors through search engine optimization, and using email marketing to get their content in front of prospects with the hope of generating clicks. Emphasis may be put on development of white papers or other downloadable content.

The quality of the lead, however, is still not considered. Leads delivered to sales are neither scored nor prioritized. Here marketing can influence revenue but it’s still largely considered a cost center. While it’s a major step up, a business that focuses on lead generation rather than lead scoring, nurturing, and development is still far from maximizing its marketing potential as a revenue generator.

Quantitative Marketing

When the marketing team moves from amassing leads to scoring, prioritizing, and sorting those leads, it reaches the third stage: quantitative marketing. This stage is marked by a shift to repeatable and quantifiable processes. Here, a marketing automation platform is required. Two new dimensions characterize the quantitative stage. First, lead scoring enables marketers to deliver higher quality leads. Whereas in the lead generation stage, a white paper download alone may constitute a lead, in the quantitative stage, marketing takes a richer view of the prospect, taking into account firmographic, profile and behavioral information before sending it to sales. Second, nurture campaigns allow marketers to deliver customized streams of contents based on prospect profiles and behavior. By combing scoring with nurture workflows, the quantitative stage represents a major leap from the lead gen stage.

Revenue Marketing

At the apex of modern marketing is the revenue marketing stage Here, not only are leads quantified by their profiles and behavior; each opportunity can be tied back to a set of marketing activities. The impact of every marketing activity is now associated with revenue results. This is accomplished through integration of marketing automation and CRM systems like Salescorce.com. Leads flow into CRM where they are converted into sales opportunities and revenues.

This integration between sales and marketing enables marketers to use advanced nurture flows to influence and accelerate the sales cycle. Each lead is qualified and moves through a customized nurture program. Every marketing activity serves a purpose and is a part of the greater whole. The cost of every campaign can be assessed in terms of expected returns on the company’s investment.

At the revenue marketing stage, revenue generated and attributed to marketing is now repeatable, predictable and scalable. The revenue marketing stage requires advanced use of marketing automation software but the payoff is huge; marketing has now fully transitioned from a cost center to a revenue driver.

© Marketing Tech Report 2015 All Rights Reserved.

Guiding the Buyers’ Journeys with Marketing Automation

by Dan Freeman 
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Few great journeys take place alone. Columbus had a crew, Jason had his Argonauts, Frodo had the Fellowship of the Ring – and your audience has you. You may not literally be present for every marketing decision, but with a properly designed marketing workflow that guides your buyers at pivotal points throughout their journey, you have an active role in the process. You’re steering the course of events without constantly telling your buyers what to do and where to go.

How do you guide decisions intelligently when you aren’t present in the boardroom while they’re being made? You tailor your marketing message to your audience and stay sensitive to your potential buyers’ behaviors, adjusting the type of content and the rate of information flow to match their needs. When you use personalized, responsive marketing, you’re able to anticipate how your prospect will handle those twists and turns in the road ahead and can prepare accordingly.

Segmentation

Giving your prospective buyers what they need to make key decisions along their marketing journey depends on knowing as much as possible about who they are. Accessible, actionable marketing segments let you address each individual within your global audience as personally as if you were having a face-to-face conversation.

If you were with them in the boardroom, you wouldn’t try to give clients in vastly different industries the same pitch; you’d do your research and shape your presentation to their needs. Marketing automation software can help you segment your customers and prospects by grouping those with common traits together. These segments can have any degree of granularity you choose, dividing current customers from prospective buyers, large firms from small businesses, and members of one industry from those in another.

A marketing automation system then lets you address each of these audience segments with personalized messages. You aren’t a random voice in the crowd telling an anonymous buyer to act now; you’re a knowledgeable guide who understands each potential buyer’s unique challenges. Just as important, marketing automation lets you offer custom-fit solutions that address those concerns precisely.

Responsive Marketing

Automation takes formerly static elements of your marketing campaigns and makes them dynamic. Instead of having a single image and the same lines of copy in every email you send, you’re able to deliver custom graphics and content that are more relevant. By capturing and synthesizing information from your web forms, preference pages and on-site behavior, you gain a clearer and more comprehensive picture of each prospect – a picture that’s essential to building a responsive marketing campaign around that individual buyer.

To illustrate how this rich data can be used to guide a prospect through the buyers’ journey, let’s look at what happens with two customers in the same industry but different budgets. For the first buyer, a software purchasing agent with a large firm, money isn’t an issue; she wants a product that offers plug-and-play utility with outstanding tech support. Your marketing team knows this because of her demographic, firmographic and behavioral data, and it adjusts your marketing campaign to her needs to focus on her concerns. Her journey takes her not through pricing gateways but through service-oriented ones.

Your second customer is just as keenly interested in your product line, but he’s an independent business owner with a limited budget. For the past few years, he’s worn many hats and is happy to wear another by upgrading on his own; add-ons and future capabilities are big selling points to him. He wants a product that can grow with him, but his primary concern is the initial expenditure. To respond to his needs and guide him along his buying journey, your marketing automation system delivers information about your product’s flexibility.

On-Site Targeting

Guiding your audience members on their individual buying journeys via email, a marketing channel you control completely, is one thing; but how do you continue to guide them online?

With a marketing automation feature known as real-time personalization, you can unmask, engage, and convert your anonymous visitors the moment they arrive on your site by delivering personalized content to each individual based on their behaviors, geography, referrer site, referrer terms, entry page or static attributes such their job title, industry, company size, and more.

Let’s go back to our service-conscious customer and our cost-conscious buyer for a moment. Marketing automation not only supplies tailor-made content in email marketing messages, but it also directs these buyers to custom landing pages. Your service-sensitive buyer sees a landing page that describes your 24/7 tech support and access to training courses, while your price-sensitive prospect finds copy directed at economy and future growth
possibilities.

Want to get more out of your marketing automation software or thinking about a purchase? Contact Us.

© Marketing Tech Report 2016 All Rights Reserved.

Driving Lead Generation with Marketing Automation

by Dan Freeman 
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Generating high-quality leads is one of the key marketing challenges for most B2B companies. Without a regular and adequate flow of qualified leads, the opportunity spigot dries up and revenues fall off quickly. Marketing automation offers a host of benefits, but how does it fit into your marketing strategy specifically as a lead generation tool? Here’s a look at how automation help drive new leads and nurture existing leads from initial contact through sales conversion.

Personalization and Customization

How do you interact with those you want to impress in a face to face meeting?
For one thing, you address them properly. When shaking hands you probably don’t say “Hello Friend”. It’s probably more like, “Hi Jason”. Automation allows you address prospects & customers individually or as member of a group that has some relevance to them. For example, “Dear Customer” or “Attention IT Managers”.

If you want to have an engaging face to face conversation with a prospect, you don’t just spew talking points; you respond to other’s comments, questions, and thoughts. Automation lets marketers respond with content based on your prospect’s past digital conversations. If they have demonstrated interest in product X, you can respond with some benefits that product X provides. As with a face to face conversation, the more relevant your message is, the more engaging it will be. By delivering customized content, you increase your response rates dramatically – sometimes by over 500 percent.

Timely Testing

Marketers have used A/B split testing to find the most effective ways to reach their audiences for decades, but modern marketing automation technology makes testing more valuable by shortening the gap between tests and live releases from days to minutes. Think of how the nearly instantaneous communication possibilities of email revolutionized how we talk to one another, and you’ll have an idea of how much of a difference timely test results can make in your lead generation strategy. Automation lets your marketing team find the best email, landing page, banner ad, or promotional message and blast it to audience segments almost in real time, ensuring that every campaign uses optimal content.

Drip Campaigns

Not all your leads start off ready to buy. That’s where drip campaigns can help, feeding small amounts of information to a prospect at a measured pace to nurture that contact over time. You don’t have the bandwidth to run drip email campaigns by hand, especially as your marketing operation expands, but marketing automation gives your team the power to optimize every part of the campaign. Channeling the flow of leads through a drip campaign keeps every potential customer moving forward in your marketing pipeline.

Marketing to Sales Hand-Offs

Your sellers work most efficiently when they don’t have to sort through an undifferentiated pile of leads to find the ones who are sales-ready. With marketing automation software, you can score and rank leads, and set sales alerts when those leads reach a sufficient score. Because all the marketing work has been done, sales people can focus on the high value work of selling. Instead of tossing leads over the fence to sales, your marketing team hand-delivers them complete with useful analytics as gift wrapping.

Lead generation is where your content and prospects intersect, and that’s where a marketing automation system truly shines. To learn more about how marketing automation drives lead gen, contact us.

© Marketing Tech Report 2015 All Rights Reserved.

What's Automated About Marketing Automation?

by Dan Freeman 
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Note, this blog post was originally published at Reach Marketing.

You’ve all heard of marketing automation.

It’s what we call that class of software that helps marketers nurture and quantify leads.

But the term marketing automation does not do justice to the software it’s named for.

Tracking visitors, sending emails, scoring leads, creating workflows, generating sales alerts…all of these automation features are critically important. But the real value behind marketing automation software lies in its ability to reach and engage with more prospects and to covert these prospects into leads, sales opportunities and customers. These benefits extend well beyond automation.

Here’s a synopsis of how marketing automation software can help your business.

Discover

First and foremost, marketing automation software helps you discover more about who your prospects and customers are. You can track and expand your prospects’ profile data, including demographic and firmographic info that you can use to better segment and target the marketplace. Profile data can even include attitudinal info obtained from surveys or form questions that can provide powerful insights into prospects’ intentions and/or authority.

By tracking what was previously invisible—the interactions your prospects have with your content—you gain a much richer view of your audience and how your content meets their needs.

Reach

Armed with a greater understanding of your prospects, you are in a position to expand your market
reach. With automated outbound messages, whether in the form of newsletters, messages triggered by site registrations, or intricate automated nurture campaigns, you can exponentially increase touch points with prospects and expand your marketplace presence.

Engage

More touch points mean more interactions and a deeper knowledge of your prospects—who they are and what content they consume—and you have now primed them for engagement. Engagement starts with understanding the buyer’s journey, the process that a buyer goes through from awareness to research to a purchase decision. You can now create content to better meet your prospects’ information needs at every stage of their journey, and track their level of engagement.

Convert

As marketers, your ultimate goal is to convert visitors to leads, and leads to sales opportunities and profitable customers. Marketing automation software enables you to convert anonymous visitors into qualified prospects using features such as reverse IP look-up and real-time website personalization. You can then track and score these leads and convert into sales opportunities based on agreed upon lead scores and activities that reflect their level of engagement.

So, the next time you hear the term marketing automation, think about these benefits.

What’s Behind Hubspot’s IPO and Infusionsoft's $55 Million Financing?

by Dan Freeman 
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Two huge events shook the world of marketing technology last week and demonstrated the continued determination to harness marketing data to improve marketing and sales processes.

On Monday, October 6th, Infusionsoft―makers  of marketing automation software serving the small business sector―announced a new $55 million round of funding headed by Bain Capital and Goldman Sachs.

Then on Thursday October 9th, Hubspot went public, raising $125 million in its flotation and becoming the 3rd marketing automation IPO. Eloqua went public in August 2012, raising $92 million, before it was promptly purchased by Oracle in December of that year for $811 million. Then in May of 2013, Marketo went public, raising nearly $80 million.

Infusionsoft's fourth round of financing caps a record year for VC funding in the marketing automation sector.

Below is a chart of selected VC financings for marketing automation related ventures.

In addition to IPOs and venture funding, there’s also been a rash of acquisitions.

Between venture funding, IPOs and acquisitions, no one can argue that marketing automation is not hot.

But what’s behind this level of activity?

Advertising, and more generally marketing, has been in the throes of transformation for decades, or what the economist Joseph Schumpeter called ‘creative destruction’. To understand the transformation taking place, try to image marketing before Social Media, before Google, even before email and the Internet. Content was largely created by a few big ad agencies (think Don Draper) and pushed to consumers. Of course we still have ad agencies doing big TV campaigns but that’s far from the full story.  The Internet browser—Mosaic was the first—made content available to the masses and also spurred a content revolution.

With content vastly more accessible, a virtuous cycle of content creation and sharing was born. And it’s the exponential growth in content that is at the heart of the rise of marketing.  Google (and its predecessors) have transformed marketing from what was largely a top down, indiscriminate, push of content from a few large agencies, to a much more efficient, bottom up, pull from hundreds of millions of consumers via Internet search. That’s how Google has gone from start-up in 1998 to a $400 billion company in a mere 16 years. Of course we still push content, but at a fraction of the cost through Internet advertising and email marketing, and it’s aimed at intricate demographic and behavioral segments, and individuals that are far more likely to purchase.

The vast bulk of content today is created bottom-up, through websites, blogs, and, of course, social platforms. Add to the proliferation of content, the exponential growth in digital interactions, and now marketing has become more data intensive than Wall Street—hence the acquisition of marketing software firms by tech giants like IBM, Oracle, Microsoft and Adobe.

The transformation of marketing is represented both by meteoric rise in content and the ability of marketers to interact with that content. The primary challenge of marketing today—and the focus of many of today’s marketing technology firms—is managing the proliferation of content and interactions, and harnessing this data to put relevant content in the hands of customers and prospects so that products can sell themselves, or, in the case of B2B, at least do the bulk of the selling work before a hand-off to sales is made.

Software-as-a-Service (Saas), aka Cloud Computing

There’s another important factor at play in the rise of marketing; the coming of age of Software-as-a-Service (Saas) or cloud computing. SaaS made it far less costly to start new software ventures, and much cheaper (and less risky) for business users to purchase software. The IT department used to hold enormous sway over software investment dollars. Not so with cloud computing. The combination of vastly increased supply of software products and the release of purchasing power from IT to the marketing department resulted in rapid innovation and a burgeoning marketing for marketing technologies.

At the nexus of data, content, and technology is the sector known as Marketing Automation and it’s gone from red to white hot. Marketing Automation deals with functionality such as streamlining content creation, distributing across multiple channels, attracting web surfers, capturing leads, segmenting prospects, quantifying and responding to digital interactions, etc. To the extent that marketing technology firms can help marketers in this gargantuan effort, they will continue to thrive.

All-In-One Sales and Marketing Platforms Attract Small Business

by Dan Freeman 
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When Stacy Isemann and her husband Todd realized their company’s revenues were flat while costs were rising, they knew he had to do something. With a marketing staff of just one (that would be Stacy), they knew they had to be very selective in what they chose to do.

The couple started STL Rent A Box in 2012, a company that rents out reusable storage boxes for homeowners and companies moving locations.

They had tried their hand at email marketing previously—they’d used MailChimp but found that the purely self-help aspect of the service was not for them. After spending a good amount of time importing data, they sent out about three emails campaigns, then dropped off after lack of activity.

Stacy met Jonathan Herrick, Head of Sales & Marketing at Hatchbuck, at a local networking meeting in St. Louis—home to both companies. After discussing their marketing issues, Stacy decided to try Hatchbuck’s marketing automation software—something she hadn’t heard of before.

Hatchbuck is one of a new breed of marketing automation vendors geared to the small business market. Most marketing automation platforms were designed for the Enterprise market, where CRM systems are dominant and ingrained in the organization. These marketing automation systems must integrate with CRM, multiplying the complexity of implementation, and of day-to-day usage.

Hatchbuck, like Infusionsoft, Ontraport, and others incorporates CRM functionality into the marketing platform, so there’s no need to integrate. The all-in-one sales and marketing platform is an appealing and intuitive concept for a small business owner. As much as vendors claim to have seamless integration between systems, anyone who’s had to push and pull data between systems knows that integration is not simple.

Rent A Box didn’t even have a CRM system—they kept their contacts in Gmail.

Enterprise marketing automation systems also have extensive marketing bells and whistles which are simply not used by small businesses. But more than that, these features can clutter and complicate the user experience.

After some initial hand holding, Stacy was up and running with Hatchbuck in about two weeks and now considers herself proficient. She Skypes with Hatchbuck support whenever she has a question or needs help.

Rent A Box has a list size of about 6,000, the majority of which are real estate companies. They do a monthly email campaign and make frequent use of the system’s segmentation capabilities.

Stacy also gets much usage out of the CRM feature in Hatchbuck. After each client is done with their move, Stacey sends a thank you, and also asks for testimonials.

Business is going really well for Rent A Box. In fact, customers are doubling almost every month and they recently had to invest in new inventory.

As for Hatchbuck, they are growing nicely as well, tapping into the small business market that’s looking for simple yet powerful solutions to help facilitate both the marketing and sales activities.  According to Herrick, “The number of small business opportunities we bring into our sales funnel each month has increased by 250% and our customer base has grown 130% since the beginning of the year as small businesses realize the need for an all in one sales and marketing automation platform.”

For more information about marketing automation including profiles of 12 vendors, see this marketing automation industry overview.

Who’s Winning and Losing in Marketing Automation? Fall 2014 Round-up

by Dan Freeman 
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One of the most important metrics in evaluating the ultimate value of any cloud software product is the customer retention rate, a number that encapsulates the value obtained versus client expectations. Retention rate takes into account usability, support, expectations set, and impact on marketing and/or revenue goals. Companies that receive value in excess of expectations generally renew; those that don’t opt out.

Download a Just Revised Marketing Automation Industry Report Covering Marketo, Eloqua, Pardot Act-On, Infusionsoft, Salesfusion and many others.

Though a valuable indicator for customers considering an investment in marketing automation, don’t expect marketing automation vendors to divulge much about retention. They sometimes publish the number and growth rate of their customer base but not a single one lets on to retention rate, or its inverse—churn.

Not to worry. Another class of marketing technology companies can shed light on the magic retention metric.

Software tracking company Datanyze scans over 18 million of the world’s most-trafficked websites, hunting for JavaScript embeds and web tags that indicate the presence of hosted software—in this case a marketing automation platform. The chart below shows the total number of websites using selected marketing automation platforms as of 9/1/14.

Note that websites do not equate with customers as a single customer may use marketing automation software on dozens or even hundreds of websites. Nevertheless, website count is a good indicator of success.

But not so fast...

It’s not just absolute website count but rather the changes—the additions and loses over time—that are the strongest indication of platform success in the marketplace.

I analyzed the top 20 firms for which we have data—and which fall roughly into the marketing automation space—and calculated the percent change in websites using their software since January 1, 2014.

Change happens quickly in dynamic markets. Demand for marketing automation software is growing overall but aggregates mask marketplace turbulence. According to the data, only two of the 20 firms—Pardot and Act-On—have increased their website count by more than ten percent since the beginning of 2014. Seven of the 20 platforms have actually lost websites, a few by over 20 percent.

The data also implies that churn is higher than many would believe. For the 20 marketing automation platforms, the aggregate ratio of websites adds to drops for the first eight months of 2014 was 1.08, meaning that for every 100 websites that added a marketing automation platform, 92 websites dropped one.

Note that the Datanyze metrics are an indication only only and are by no means a definitive measure of software presence. A few caveats of this data are in order and can be found here.

Great marketing can generate a steady stream of new customers in a growing market, but only positive customer experiences will result in high retention rates. Caveats aside, one thing is clear; rapid change is ahead in the marketing automation sector.

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Marketing Growth Strategies LLC has been engaged in research, analysis, lead generation, and client implementation in the Marketing Automation sector since 2009 and has recently revised its highly successful 2014 Marketing Automation eBook.

Considering implementing marketing automation? Download the 2014 Marketing Automation eBook