ContentPart 1: Topic OverviewPart 2: Reasons to ImplementPart 3: Value DriversPart 4: ChallengesPart 5: Performance MetricsPart 6: Success StoryPart 7: Vendor Landscape

SidebarsSurvey StatsBenchmark KPIsCore TechnologiesGleanster NumbersVendor Quick Reference Guide

Entire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.

Note: This document is intended for individual use. Electronic distribution via email or by post-ing on a personal website is in violation of the terms of use.

Q3 2012

Gleansight

Here’s what marketing automation is not. It’s not a single technology used by a single function within the organization to achieve a single purpose or derive a single benefit. Rather, marketing automation encompasses multiple technologies, functions and purposes, by integrating a combination of core capabilities into a cohesive whole. Think of a home entertainment system comprised of multiple components: a high definition TV, an MP3 player, a DVD player, a gaming console, a surround-sound speaker system, and so on. Some of these components work on their own or in combination with other components – not unlike a marketing campaign management system, an email marketing platform and a lead nurturing application. Yet there’s enormous value in bringing them together.

Until recently, marketing automation was largely viewed as an unproven approach to data-driven marketing improvement. With the number, diversity and sophistication of related solutions exploding, that is no longer the case. Companies (both B2B and B2C) are achieving results that range from reduced marketing costs and better measurement to increased revenue and profitability.

That said, overall penetration remains low and it may be some time before the vast majority of companies take advantage of these capabilities. Meanwhile, a small percentage of companies — what Gleanster refers to as Top Performers, based on their ability to outperform industry peers across various key performance indicators — are already harnessing the power of marketing automation. This Gleansight benchmark report examines their common characteristics. It also looks at how they’re maximizing the value of their investment in marketing automation, by putting not only the right technologies in place but also the right business processes, culture, organizational resources, and performance metrics.

Marketing Automation

Gleansight: Marketing Automation

Note: This document is intended for individual use. Electronic distribution via email or by post-ing on a personal website is in violation of the terms of use.

Entire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.

Marketing automation software helps to meet these challenges. It replaces separate systems for email, web visitor tracking, lead scoring, nurture campaigns, campaign management, reporting and other core components with one solution that streamlines marketing processes and shares data with sales. This makes it easier to execute marketing programs and to track results. The resulting efficiencies free marketers’ time and budgets to create more sophisticated programs, while better measurement lets them ensure their resources are used as productively as possible.

By definition, automation refers to a process or system that operates on its own and takes the place of human labor. Marketing automation should mean having the system make choices so marketers don’t have to. Think about lead scoring, where the traditional approach is for a team of people to sit around a table and negotiate a set of scoring rules. An automated approach would eliminate that need by using techniques like regression analysis to derive the

formulas directly from the data. Other automated applications could be matching content to user behavior and choosing the optimal timing for campaign messages. Done right, marketing automation creates a virtuous cycle of continuous improvement as marketers run tests, deploy what works, and test again.

But marketing automation isn’t always done right. The systems require investment in new skills, creation of new materials, and changes to departmental procedures. Marketers must learn to

measure and communicate results in ways that make sense to their counterparts in sales and senior management. And they often must overcome organizational obstacles to sharing data and coordinating activities that would otherwise

block their efforts from bearing fruit.

In short, success with marketing automation is not guaranteed. The technology itself is rarely the problem: the major products have been running for several years now, so the main bugs have already been worked out. Because the systems are software-as-a-service,

Survey StatsThe research findings featured in this Gleansight benchmark report are derived from the Q3 2011 Gleanster survey on Marketing Automation.

• Total survey responses: 378

• Qualified survey responses: 312

• Company size: <$1M (6%); $1 - 10M (29%); $10-100M (30%); $100M - $1B (24%); >$1B (11%)

• Geography: North America (88%); Europe (6%); Other (6%)

• Industries: Software and Technology (33%); Business Services (15%); Financial Services (9%); Education (5%); Entertainment (4%); Other (34%)

• Job levels: C-level (9%); SVP/ VP (23%); Director (37%); Manager & Staff (31%)

Sample survey respondents:

Director, Consolidated Communications

Manager, McAfee

Director, Hewlett-Packard

VP of Marketing, FlexPAC

Manager, The Gorman-Rupp Company

VP of Marketing, CompuCom

Manager, PSG

CMO, Networked Insights

Director, McKesson

SVP, Sysco

Part 1: Topic OverviewBusiness marketing has changed radically in recent years. As buyers do more research on the Internet, they interact with sales people less often and later in the selection process. This has made marketers increasingly responsible for attracting new customers and providing them with information. At the same time, marketers face pressures to deploy new techniques, control costs, and prove out the value of their efforts.

Marketing automation replaces separate systems for email, web visitor tracking, lead scoring, nurture campaigns, campaign management and reporting with one solution that streamlines marketing processes and shares data with sales.

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Gleansight: Marketing Automation

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Entire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.

Benchmark KPIs Gleanster uses 2-3 key performance indicators (KPIs) to distinguish “Top Performers” from all other companies (“Everyone Else”) within a given data set, thereby establishing a basis for benchmarking best practices. By definition, Top Performers are comprised of the top quartile of qualified survey respondents (QSRs).

The KPIs used for distinguishing Top Performers focus on performance metrics that speak to year-over-year improvement in relevant, measurable areas. Not all KPIs are weighted equally.

• The KPIs used for this Gleansight are:

• Reduction in the cost per lead

• Increase in customer acquisition rate

• Increase in return on marketing investment

To learn more about Gleanster’s research methodology, please click here or email research@gleanster.com.

deployment is simply a matter of accessing an already-operational system. Basic connections with the company website and sales automation system can often be completed in minutes, although deeper integration takes longer.

However, real business value requires more than getting the software to run. Companies must set realistic goals for their project and measure progress towards those goals. They need to

train staff to use the systems, to design new marketing programs that take advantage of system capabilities, and to populate those programs with effective marketing content. They need to assess and improve data quality, both by fixing internal processes and by purchasing external information. Perhaps most critical, they must coordinate with the sales department to ensure the programs are delivering valuable leads and that those leads will be handled effectively when sales receives them.

Gleansight: Marketing Automation

Note: This document is intended for individual use. Electronic distribution via email or by post-ing on a personal website is in violation of the terms of use.

Entire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.

* According to Top Performers, based on 312 Qualified Survey Responses to the Q3 2011 survey on Marketing Automation.**According to Everyone Else shown only when a notable disparity occurs relative to Top Performers

Increase Revenue. Marketers are sometimes stereotyped as more interested in clever advertisements or customer attitudes than in concrete business results. But, in fact, driving revenue is their most important concern. They see marketing automation systems as a tool that supports this goal in many different ways. But many marketers also recognize the difficulty of calculating the impact of marketing programs on revenue. These marketers are likely to focus on other objectives that can be measured directly.

Generate better leads. Low-quality leads waste company resources, making them worse than no leads at all. Marketing automation makes it easier to identify the source of each lead so as to expand programs

that produce high-quality leads and modify or discard programs that don’t. Marketing automation also provides tools to capture lead information and to use that information in scoring models. The resulting scores give marketers an objective quality metric that is available immediately and continuously, without relying on salespeople to give their own subjective assessments.

Generate more leads. Top performing marketers focus less on lead quantity than lead quality. But all marketers recognize that creating more leads is important. Marketing automation systems are the primary tool for outbound lead generation efforts, primarily email, and for taking advantage of traffic generated by other channels such as advertising, blogs, trade

Part 2: Reasons to ImplementMarketers know their ultimate job is to increase revenue. Marketing automation can help by generating more and higher quality leads, which will eventually turn into new customers. Greater efficiency and reduced costs are important because they free up resources for the primary objective. Improving results from existing customers, through higher cross sell, upsell, and retention, are still largely the job of sales people, although marketers have an increasing role to play as customers interact with the company through Web and social channels in addition to direct contact. Better measurement is key to improving performance, by learning from the past. But measurement is a supporting capability, not a goal in itself, as is sales alignment, which contributes to better results even though it doesn’t generate revenue directly.

Gleansight: Marketing Automation

Note: This document is intended for individual use. Electronic distribution via email or by post-ing on a personal website is in violation of the terms of use.

Entire content © 2012 Gleanster, LLC. All rights reserved. Unauthorized use or reproduction is prohibited.

Core Technologies

The basic components and core capabilities required for a marketing automation system include:

Outbound email. Users must be able to create templates to generate personalized emails from the system database. They must also be able to import email lists from trade shows, print advertising, CRM and other sources. Emails must contain trackable links to system-generated landing pages.

Social media. Users can post content to social media, track social media-generated traffic, help recipients share content to their own social media accounts, and monitor social media conversations. More sophisticated features include forms and personalized ads within social platforms, using social sign-on to capture more data, and building more detailed profiles based on activities, consumption, connections and influence.

Landing pages and Web forms. Users must be able to create Web forms and landing pages that can capture leads from system-generated emails and other sources. Forms are designed to collect prospect information and marry this with cross -channel behavioral response patterns allowing the organization to identify which prospects are ready to talk to sales. These pages are hosted by the marketing automation system and post data directly to the marketing automation database.

shows, and social media. Marketing automation helps capture more leads on the company website by providing tools that let marketers build micro-sites, surveys, and special-purpose landing pages without help from the company IT department or webmaster.

Improve marketing efficiency. The biggest obstacle to better marketing

results is often lack of time for marketers to experiment with new programs and to refine existing programs. Marketing automation systems enable marketers to spend less time on mechanical tasks such as program set-up, and to do for themselves work that would otherwise be sent to another company department or an outside agency. As a result, marketers can run more projects, deliver those projects more quickly, and react faster to new opportunities.

Improve customer retention. Marketing automation systems provide an effective, low-cost way to keep in contact with existing customers, through both scheduled messages such as newsletters and event-driven messages such as follow-up to a customer service request. These automated programs build a positive relationship that can result in higher retention without requiring personal effort by a salesperson or account manager.

Increase close rates. Although marketers have traditionally not concerned themselves with what

happens after a lead is passed to sales, this attitude is changing as more companies envision revenue generation as a unified process managed jointly by marketing and sales. This approach makes sense as prospects and customers interact with marketing-managed systems throughout their relationship with the company. Beyond generating higher quality leads from

the start, marketers can contribute to higher close rates by running nurture campaigns.

Improve marketing measurement. Marketers need good measurement, both to understand which programs are working and to justify their budgets. But measurement projects compete for time and budget with other marketing tasks, which often have more immediate impact on lead volume and revenues. Marketing automation systems assemble much of the information needed for better measurement and provide new measurement reports, reducing the additional effort required to achieve improved measurement.

Improve marketing-sales alignment. Because closer integration between marketing and sales is a growing necessity, both departments are looking for ways to achieve it. Most sales departments already have basic operating systems in place to distribute, track, and manage leads and customer contacts. Marketing automation provides a corresponding infrastructure for the

* According to Top Performers, based on 312 Qualified Survey Responses to the Q3 2011 survey on Marketing Automation.**According to Everyone Else shown only when a notable disparity occurs relative to Top Performers