HomeBlog Calculating The ROI Of Marketing Automation Platforms

Calculating The ROI Of Marketing Automation Platforms

December 14, 2010|Jonathan Block

How times have changed. It's clear that many B2B organizations now understand the need for marketing automation technologies, and the need for optimized processes and skills to leverage them, as blogs and tweets on these topics abound at an increasing rate. Ultimately, the proof of whether these purchases “worked” is often difficult to measure, time-consuming and subject to significant debate.

How times have changed. It's clear that many B2B organizations now understand the need for marketing automation technologies, and the need for optimized processes and skills to leverage them, as blogs and tweets on these topics abound at an increasing rate. Ultimately, the proof of whether these purchases “worked” is often difficult to measure, time-consuming and subject to significant debate.

Unfortunately, we still see organizations purchase a marketing automation platform (MAP) in an attempt to automate processes that don’t exist; in instances where this has occurred, the technology has struggled to demonstrate results. As a result, any journey into marketing automation platform ROI must compare organizations where a MAP is implemented without strong surrounding processes, those that wisely combine technology with process, and those with no marketing automation platform.

We've been using our Demand Creation Waterfall as a framework to compare the benchmark conversion rate data we've collected for each of these three scenarios (see the graphic). While this post uses sample numbers (our clients have access to more granular benchmarking data), the results are both stark and startling, and they include the following.

No marketing automation platform, no processes. Here, there is no true demand waterfall, per se, but rather a funnel with an extremely wide top that quickly narrows to a trickle by its end. With no shared processes in place between sales and marketing (e.g. target market, lead definition, lead handoffs, service-level agreements), demand creation leaders have little choice but to flood the waterfall with hand raisers from outbound efforts. Because all but the most apparent inappropriate responses are passed on to a qualification function such as inside sales, conversion rates from response to “lead” can be high but few will convert from opportunity to close.

Marketing automation platform, but no/weak processes. Our second group is made up of organizations that purchase a marketing automation platform, but don't spend the time building all — or even any — of the processes that drive true marketing automation platform performance. In and of itself, a marketing automation platform will help marketers refine their targeting and the more surgical application of content to prospects; both combine to drive greater response rates. While the increased percentage of deals looks good on the surface, when considering the costs involved (and the ASP of your offerings) the figures are rarely impressive.

Marketing automation platform with average processes. Our third group consists of organizations that purchase a marketing automation platform and drive alignment between sales and marketing around target market, lead definition, lead handoff and service-level agreements at even a rudimentary level. When this occurs, marketers are able to take advantage of broader marketing automation platform functionality, including lead scoring, portfolio marketing and lead routing versus the more simple campaign management functionality used in scenario two; the value of this functionality can be seen in performance throughout the waterfall.

Clearly, organizations that address demand creation processes and skills, at even just a basic level, are best positioned to leverage marketing automation technology. Imagine the results your can achieve if you reach strong or best-in-class status.

Jonathan Block

Jonathan Block is Vice President and Practice Director, Technology, at SiriusDecisions. He has developed key models and frameworks that enable b-to-b organizations to understand, evaluate and implement appropriate marketing and sales technologies, as well as advised executive clients on the role of technology to help drive sales and marketing integration and enterprise alignment. Follow Jonathan on Twitter @jblock.

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