Marketing Automation Buyer’s Guide › wp-content › uploads › 2010 › 07 › bg...Marketing...

Focus Research © 2009 All Rights Reserved

Focus Research

Marketing Group

June 2009

Marketing Automation Buyer’s Guide

Marketing Automation Buyer’s Guide 2Focus Research ©2009

The goal of marketing has always been the generation of leads through a variety of media and assorted approaches.

Unfortunately, as this task grew in complexity (and expense), the results only rarely matched that growth, helping drive

a wedge between many sales and marketing organizations. Sirius Decisions studied the issue and found that only 26

percent of closed sales stemmed from a lead generated by marketing. That means three-fourths of leads that result in

sales are discovered by the sales team. But in the push for a more efficient sales force, sales representatives will have

less time for lead prospecting. That makes it vital to close the sales-marketing gap.

Luckily, marketing is undergoing a transformation. A new generation of marketing automation products is designed not

only to discover prospective customers but to learn where they are in the buying process, what activities they have pursued

to research their future purchases, what audience segments they fall into and what characteristics identify them as likely

buyers. All of this can be done automatically and, if marketers understand their own products and the value proposition the

customers are looking for, can deliver a far higher percentage of purchase ready leads for sales to act upon.

This technology is all relatively new, and the space is evolving quickly. Our Marketing Automation Buyer’s Guide will help

you match your company’s needs with the most appropriate solution and give you insight on what issues you must discuss

with vendors before deciding on a marketing automation product. To make that decision, you should understand four

crucial aspects: 1) marketing automation buyer types, 2) product requirements, 3) cost considerations and 4) vendor

relationship needs. Our buyer’s guide is structured around these areas:

Introduction

Table of Contents

1 Essentials: Top product, cost and vendor considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 3

2 Top Peer Advice: Buying advice directly from buyers like you . . . . . . . . . . . . . . . . . . . . . . . . . p. 6

3 Buying In-Depth: Detailed needs, product, cost and vendor considerations . . . . . . . . . . . .p. 8

4 Tools : Tools and worksheets every marketing automation buyer should use . . . . . . . . . . . . . p. 22

Our Marketing Automation Buyer’s Guide is one of several research reports based on the Focus Research

Methodology, which is designed to support your entire Marketing Automation purchase process.

Marketing Automation Market Primer — Want to know what Marketing Automation is?

Marketing Automation Buyer’s Guide — Want help defining your requirements?you are here


Marketing automation solutions comprise a set of tools that automate many of the processes that marketers go through

to launch campaigns, gather and score leads, pass them through sales, and move not-yet-ready-to-buy leads into a drip

marketing program. For a full explanation of marketing automation, and an overview of the vendor landscape, see our

Marketing Automation Market Primer.

The most crucial points to keep in mind when beginning to consider the purchase of a marketing automation solution are:

Buyer: What type of buyer are you and what are your particular needs?

Product: What product features and functionality should you focus on?

Cost: What expectations should you have for price, indirect costs and ROI?

Vendor: What will you need from the vendor during sales, installation and support?

While the product, the cost and the vendor are clear-cut areas for examination, perhaps the most important of these four

is the buyer; without an understanding of your specific needs, the issues you need to address within your organization and

the way your marketing and sales staffs work, you will lack a proper foundation to evaluate the other three areas and this

can negatively impact your ability to decide what product is best for you, the appropriate cost model and the right vendor.

BuyersWe divide marketing automation buyers into four basic

categories on the basis of the amount of functionality they

need, their integration requirements, the amount of internal IT

resources and the cost sensitivity their companies have. Those

categories are:

Basics Buyers: Organizations that want basic email marketing

features in the quickest, easiest and least-expensive solution

Fast Featurists: Organizations that want to take advantage

of advanced functionality without doing a complicated

implementation

Enterprisers: Organizations that focus on integration and

scalability, and see marketing automation as another data

source feeding into an organization-wide data environment.

Team Players: Organizations that have fully integrated their marketing automation solutions with other business

systems, both culturally and technologically.

Marketing Automation Essentials1

“Every customer path is unique, but many entrepreneurs in the small business sector are focused on immediate sales results. They also tend to find purchase solutions based on recommendations from

their peers and business coaches.”

Dave LeeVice President of MarketingInfusionSoft


Throughout the in-depth section of the guide we refer to how each buyer type should approach the following product,

cost and vendor factors when purchasing a marketing automation solution.

ProductCertain features are prerequisites for a

marketing automation solution. If any of the

following are missing, you need to drop the

solution from consideration:

Email marketing module•

Lead scoring •

Audience segmentation •

More advanced features can tilt your decision

toward a particular product, especially if

they fit specific functions unique to your

marketing team or the unique preferences of

your customer set. Those features include:

Off-line marketing integration•

Marketing ROI calculation•

Real-time sales alerts•

CostAs with any IT purchase, the up-front price

may not be the total cost of your marketing automation solution. Many new entrants to this market are employing a SaaS

(Software as a Service) model, which mitigates up-front costs but introduces ongoing subscription costs. There may be

implementation and maintenance costs as well. It’s important for marketers to present the true cost of a solution at the

time of its introduction, since the technology is relatively new, and a failure to understand the total cost may result in a

difficult-to-explain budgetary burden later.

In addition to the initial cost of your software, factor these additional costs into your buying decision:

Internal hardware expenses

Third-party integration costs•

Training costs•

Recurring software license fees•

Costs for regular upgrades•

Support costs•

“Comprehensive marketing automation solutions can now be purchased for as little as $1,500 a month — this amount may be less than what a company spends on a month’s worth of coffee and bagels.”

Phil Fernandez

CEO

Marketo


VendorMarketing automation solutions run the gamut from complex

multichannel systems to fairly simple email management

products. That range of complexity makes it important to

find a vendor that understands the level of sophistication of

its target customers and delivers support and upgrades in

a manner that makes sense for that organization. It’s also

important to find a vendor that has a view of sales, marketing

and lead generation that mirrors your own. A philosophical

mismatch can result in a product that forces your marketers

to abandon processes that work for them — good as well as

bad — and that sets the stage for a failure of adoption.

Another important factor in deciding on a vendor is

the degree to which the vendor allows you to explore

emerging marketing technologies and techniques. Many

“social CRM” technologies such as blogs, wikis, social networking sites and other communities are promising to

marketers, but if a vendor does not build extensions for them into its products they could be a dead end. Similarly,

if a vendor does not employ these technologies in its own marketing efforts, it’s a warning flag: If the vendor fails to

understand the nuances and strategies behind using these emerging tools, how will it be able to help your company

when you want to capitalize on them?

The idea of a technology road map also feeds into the idea of vendor stability. This is a fairly new area of technology and

there are many young companies bringing products to market. One key criterion you should look for in your marketing

automation vendor is stability and track record, especially if you opt for the on-demand model. Since many of the

functions needed to maintain your marketing and database and execute campaigns will be fulfilled by your vendor’s staff

and infrastructure, it becomes vital to have confidence that the vendor will live up to its promises and avoid poor data

management, updates that fail to go smoothly or arbitrary increases in price for existing customers. If the vendor’s past

history includes such negatives, you can expect to suffer similar things in your own implementation.

In order to prepare you for the decision and purchase process, we’ll talk about what these product, cost and vendor

considerations mean for you, based on the kind of buyer you are. The aim is to help you select the product best-suited to

your specific needs and goals. To do that, the first step is to identify what those needs and goals are.

“Standards will need to start to evolve in the next two to three years, and that will pave the way for some consolidation. You will see some of the larger email vendors try to snap up some of the smaller

marketing automation vendors.”

Kevin JoyceCMOMarket2Lead


2Top Peer Advice

We asked marketing automation buyers what advice they would give a friend who was buying a marketing automation

solution. Their responses, borne of real-world experience, illustrate some solid ideas to keep in mind during the buying

process. In their own words, here is some of the best advice we heard from real-world buyers.

“Be sure to ‘take the wheel’ during the evaluation process and attempt to set up a nurturing campaign, create an email landing page, etc. A good solution should be intuitive and user-friendly and should not require extensive training or documentation.”

Celia, Marketing Director Systems Integrator Selected Marketo

“Talk to marketing managers at other companies that are using marketing automation tools. You can gain a lot of great insight for free.”

Joe, Vice President of Worldwide Marketing Technology Training Company Bought LoopFuse

“Before buying a system, the marketer should have preliminary discussions with sales about the rules for a scoring system. The vendor systems vary on how scores are managed and calculated. This is a potential big value-add to marketers in helping them bridge gaps with sales teams.”

Howard, Director of Product Marketing Media Company Still considering his purchase

“Customer references — at least three — are a must, and ideally they are customers of the same size and in the same industry and using the same marketing automation system that you are using so they can confirm whether there have been any issues with integration.”

Holly, Director of Marketing Ops and Analysis Content Management Developer Purchased Market2Lead

“Schedule a meeting with sales and make sure you know what happens to the leads that are passed to the channel. Every company has a different process, different expectations — and there may be a lot of potentially false assumptions about lead life cycles. Get the facts.”

Pam, CMO B2B Software Company Purchased Manticore


“Don’t go with any system that requires html knowledge to effectively use it.”

Stacy, Marketing Manager Webcast Production Company Bought Marketo

“The more you understand about your marketing processes, the more you can fully utilize your solution. But even if you don’t have your processes mapped out, marketing automation can streamline and automate some of your activities right from the start, and it can actually define some processes for you. Don’t be afraid of it — the sooner you use it, the faster you can learn to use it better.”

Jeff, CMO Publishing Company Uses Unica

“Find out how flexible they are when it comes to their automation. Everyone has different business rules to make their organization run. If you find yourself having to change your business rules to accommodate the technology, then you are using the wrong technology.”

Ian, Senior Internet Marketing Manager Human Resources Management Company Decided on Eloqua


3BuyersWhat type of buyer are you and what are your particular

needs? Without an understanding of your specific needs, the

issues you must address within your organization and the

way your sales staff works, you will lack a proper foundation

for making decisions about what product is best for you, the

appropriate cost model and the right vendor.

While every buyer’s circumstance is unique, there are some

qualities that allow us to divide them into the four distinct

groups outlined below. Indentifying with a buyer group

will help you to prioritize what feature, cost and support

considerations to focus on when interacting with vendors

during the sales process. In the subsequent product, cost

and vendor sections of this guide, we reference what special

considerations certain buyer types should undertake.

These categories are a shorthand way of identifying your needs, and your organization may share characteristics of more

than one of these groups. Choose the aspects most appropriate to your business and craft a plan that incorporates those

aspects to reflect your unique needs as you move through the process of selecting a product and vendor.

Which Buyer Type Are You?

Basics Buyers: Just beginning the automation of their marketing operations, these buyers are looking to better organize

the marketing data they’re already collecting but have no present aspirations to integrate their marketing automation

systems with CRM, SFA or other systems — which they may not have anyway.

Tend to be small businesses and very cost-conscious•

Need the most basic functionality, especially for email management•

Require no integration•

Have no internal support•

Fast Featurists: These buyers want to take advantage of advanced functionality — for example, tapping into an

existing CRM database — without doing a complicated implementation.

Tend to be small to medium-size sales organizations •

Want more advanced functionality •

Desire the option of some basic integration with other external systems•

Have limited internal support•

Buying In-Depth

“When it comes to marketing automation, we like to say, ‘Think big, start small, move quickly.’ You don’t need to have every process mapped out before starting, but the more you can map out, the better you can

understand your objectives.”

Phil FernandezCEOMarketo


Enterprisers: Enterprisers need to focus on integration and scalability, and at looking at marketing automation as

another data source feeding into an organization-wide data environment.

Tend to be medium-size companies to large enterprises with complex business processes •

Need advanced functionality•

Require advanced data and systems integration•

Have full internal support resources•

Team Players: A type defined more by culture than by technological sophistication, these buyers have breached the

barrier typically separating sales and marketing and need marketing automation solutions that permit collaboration,

closed-loop lead marketing and agile campaign development.

Tend to be medium-sized to large businesses, or even sub-groups of the marketing departments of large businesses•

Have significant internal support resources•

Have leadership that is fully behind the use of technology to encourage effective lead management•

Need advanced functionality, and make efforts to understand how best to harness that functionality•

ProductMarketing automation solutions can be differentiated by

their features. Some are basic and meet the essential

needs of every marketer, while some are unique to

different vendors and offer unique capabilities for

discovering new customers and learning more about

them. This is a relatively new space with many innovative

emerging vendors, and their fresh approaches have

resulted in a host of features buyers must evaluate and

examine during the buying process. Marketing automation

solutions may also include analytics, reporting and

collaboration capabilities, and they also have delivery

models that differ from product to product. All of these

should be weighed in your decision.

Essential Requirements

Every marketing automation solution should include a core

group of features. Products that lack these prerequisites

may be inexpensive, but they should be avoided because

they will probably not be effective. A modern marketing

automation system should include these basic features:

“Email and paid search are the two most cost effective channels for SMBs. The results are extremely easy to track, and once you find the inputs that produce your desired opportunities you can really step on the gas.”

Adam Blitzer

Vice President of Marketing and Co-Founder

Pardot


Email Marketing: The core of most modern marketing

automation systems, this feature allows the user to create

and manage automated email marketing campaigns.

Depending on the level of sophistication in the product and

in the user organization, these messages can be tailored to

many different types of leads and existing customers, and

the responses to these messages can trigger other events

in the marketing and sales process. A good email marketing

component will also help prevent marketing campaign email

from being diverted into users’ spam filters.

Be aware that some applications are primarily geared

toward email marketing and do not include the other,

deeper functionality of full marketing automation suites.

This differentiation also continues into pricing; the costs

of marketing automation will be greater than the costs

for a pure email service, even if the number of emails

permitted is similar.

Web Site Behavior Tracking: Just as responses to

emails can indicate the readiness of a prospect to buy, so

can user behavior on Web sites. Tracking technology can

keep track of viewers, correlate their latest visit behavior to

past behaviors, and mark certain behaviors or combinations

of behaviors as triggers for moving those customers from

a classification of prospect to a lead and sending their

information to sales.

Landing Page Management: This is similar to Web site behavior tracking, but it is linked to a prospect’s reactions to

specific targeted landing pages. A good management application will allow users to automatically create personalized

landing pages based on how prospects are segmented.

Audience Segmentation: This component divides contacts into distinct groupings — not simply by the prospect’s

likeliness to become a customer, but based on other traits, interests and behaviors that allow you to tailor the marketing

message more precisely. Good segmentation functionality provides a horizontal selection of segmentation characteristics

built into the system and makes it easy for marketers to introduce characteristics based on their vertical market and the

unique qualities of their target customers.

Lead Scoring: This feature assigns values to a prospect’s attributes and activities so as to evaluate his or her readiness

and likelihood to buy. When a lead enters the system, he or she may be assigned a score based on buying attributes and

past activities. As that lead is nurtured and behavior is monitored, factors such as time in the system without engaging

with the company Web site could cause the lead’s score to dip; a call to customer service to learn about an aspect of a

warranty could cause the scores to go up. When a score reaches a threshold, the lead is passed to sales for action.

“Marketing organizations are told to focus on lead quantity and sales is told to follow up on every lead: the classic treadmill of sales and marketing dysfunction. If you start to think about the flow of the prospect’s experience and then employ nurture management, lead scoring and seamless integration between sales and marketing to enable this new prospect’s experience, it will pay

massive dividends.”

Erik BowersPresident and VP of ProductsMarketBright


Lead Nurture Management: This feature allows marketers to automate the process of nurturing leads from acquisition

to actionability, often over a long time frame. It allows marketers to build campaigns tailored to maintain contact with

possible future customers, and to examine reactions to those campaigns in order to understand when individual

customers begin to move closer to buying. A typical system would examine key activities that indicate when a prospect’s

interest in making a purchase has changed, and might include the ability to examine not just online interactions but

responses to off-line marketing channels as well.

Real-Time Alerting: Tied into a nurturing function, this feature allows information about the changing readiness of

potential customers to buy to be sent directly to sales, allowing them to contact the lead while his interest is high. This

feature can also help marketing managers understand what campaigns are receiving unusually positive or negative

responses, allowing them to make changes quickly.

Integration with CRM: Almost all marketing automation systems include built-in ties that allow them to exchange

information with CRM systems. For example, alerts may be sent directly to a sales representative’s Salesforce.com page

so they appear on the interface he or she uses in day-to-day work. Also, potential leads discovered by sales staff can be

automatically fed back into the marketing automation system so they are subjected to the same lead nurturing approach

as leads generated by marketing.

Advanced Requirements

To differentiate their products — and because many new ideas have emerged from marketing automation vendors in

the past 18 months — many marketing automation solutions include unique features in their core functionality aimed

at maximizing productivity gains, improving the measurability of marketing results, providing data faster and wringing

maximum value from leads. While all these features are useful, some will be more useful to your organization than others.

Buying functionality you don’t need can be expensive and will introduce a layer of complexity that can hamper adoption.

Settling on a bare-bones solution with too few features, however, can leave you without a path to expanding the use of

your marketing automation system. Read through the following features, which include the most prevalent advanced

features. Note which ones you need now, and which ones your company might find useful in the near future. Use this list

to help trim down your product list when you reach the buying process.

Registration and Survey Tools: These features allow potential customers to enter their own information into your

database as part of the process of interacting with your company, such as signing up for a newsletter or taking a survey.

The benefit of including this capability in the marketing automation solution is that this data goes directly into the system

instead of having to be input from paper forms or ported from another system in your IT infrastructure.

Membership Management: Hand in hand with registration is membership management, which provides logins to

potential customers so that they can manage their email preferences and contact data after they’ve entered your lead

database. Potential customers will do this to retain access to news and information about your organization; by giving

them the ability to update their own information, you avoid the expense of losing them and having to re-acquire them.

Data Hygiene: Many marketing automation solutions now include the ability to examine data as it comes in and remove

duplicated, partial or otherwise incorrect data.


Personalized Microsites: These allow marketers

to deliver personalized, relevant content to each

prospect based on information already collected

about them. These sites use a distinct URL for each

prospect and can be developed using rules that

automatically assign content based on a prospect’s

industry, job title, geography or similar criteria.

Integration of Off-Line Marketing: While most

marketing automation solutions have no trouble

collecting and weighing the information generated

by online marketing efforts, some solutions also

allow the easy integration of off-line marketing

efforts, such as direct marketing, surveys and other

methods. The inclusion of these formats allows

marketers to measure which marketing formats

work best with various segments and provides a

more complete view of the customer regardless of

his or her responses to online campaigns.

Marketing ROI Reporting: By tying into other business systems, the marketing automation system can correlate

revenues to marketing expenditures, providing an easy and quick way to determine whether a marketing spend is

justified. This has proved very useful in the immediate past, as budget cuts often target marketing and, until recently, there

have been few data-based methods to illustrate how marketing contributes to revenue. Conversely, ROI reporting allows

marketers to see campaigns that do not work and enables them to change direction quickly.

Other Product Considerations

On-Premise vs. On-Demand Solutions: While these two delivery models are often viewed in the context of cost,

there are issues around their use and deployment that should be factored into your decision-making process. On-demand

solutions — also known as SaaS (Software as a Service) and delivered via the Internet — are easier to deploy; the IT and

infrastructure demands are far fewer than with an on-premise solution; and issues such as backups, software upgrades

and security are handled by the vendor, removing that burden from your organization. The downside is that on-demand

solutions tend to be far less flexible when it comes to customization, so if your circumstances demand multiple custom

features, your ability to use an on-demand solution may be severely limited.

“With a little research and planning, any business can find a manageable multichannel solution within their budget. The key is to reach prospects and customers where they want to be reached, and that takes trial and

error to refine.”

Dave Lee Vice President of MarketingInfusionSoft


How Buyers Rated the Most Important Features in a Marketing Automation Solution

The buyers we spoke to about their marketing automation choices revealed the importance of a solution that anyone

in the marketing department could use. Early marketing automation solutions were complex and required significant

training; as a result, oftentimes one person in the department served as an analyst or “operator” of the solution. However,

as the need for the technology grew, and as the needs for fast results from the technology grew, this no longer worked.

“Everything had to go through one person, which created a bottleneck and it took longer to get things out,” said one

buyer. After acquiring an easier-to-use solution, “We can react faster as more people can manage their own campaigns.”

To achieve that, marketing automation solutions must come with a rapid implementation and training program.

“We’re a fast-paced and dynamic company, and we needed a

marketing solution that moved at our speed,” said one buyer.

“Part of our selection criteria included the ability to get up and

running, including training, within two weeks of purchase.”

Once those campaigns are created, buyers are looking for

help with aspects of communication that can derail them. For

example, email messaging must be CAN-SPAM–approved,

meaning that they are optimized to avoid spam filters and reach

prospects’ mail boxes. Other buyers want to gain insight into

who is visiting their Web site and not converting into a customer.

The creation of campaigns is important, but buyers also said

that the ability to examine the impact of campaigns must come

with it. “We needed improved reporting capabilities that would

enable us to track marketing’s contribution (both direct and

influenced) to the pipeline,” said one buyer. “We needed to be

able to measure campaign and program effectiveness, and

needed to be able to track custom details at the program level to enable the level of reporting and analysis we envisioned.”

Once that data is collected, the system needs to interface with CRM systems to share data around. “We need to send leads

and marketing data to our sales team, and we need full closed-loop reporting on marketing activities,” said another buyer.

“Marketing automation allows you to understand the prospect’s buying processes and use that insight to deliver the right message at the right time to that buyer. However, this requires not just automation but also losing the mind-set of large, bulk, undifferentiated outbound

marketing campaigns.”

Steven WoodsCEOEloqua

How Different Buyers Approach Product Considerations

Basics Buyers: Ease of use, ease of data entry and implementation

Fast Featurists: Ease of data entry, ease of use, integration into CRM

Enterprise Buyers: Ease of use, robust reporting and analysis, integration into CRM, complete

multichannel coverage

Team Players: Ability to share data readily between systems (especially other back-office systems

beyond CRM), ease of use, multichannel coverage


Cost ConsiderationsThe business reasons for buying a marketing automation solution have only become more evident in the past year: sales

is expected to do more, marketing is expected to generate more leads, and both sides of the equation are expected to

achieve their goals with the same or less manpower as in the past. Automation is the only way to scale up marketing

efforts without increasing head count, making it an attractive investment even in uncertain economic times.

Marketing automation costs run a broad range, from relatively inexpensive to simple email marketing solutions to

thousands of dollars for an on-premise fully integrated solution. Thankfully, pricing is largely straightforward and hidden

costs are minimal, especially if you are using a SaaS model or have successfully implemented an on-premise solution;

however, you should understand exactly what you’re paying for before you pony up your cash for any solution.

The Pricing Model that is Right for You

Because of the wide variation in pricing models for marketing automation solutions based on their functionality,

deployment model and pricing structure, it can be very difficult to establish an apples-to-apples cost comparison of

marketing automation software. On-demand solutions can range anywhere from $15 per month for an email marketing

application such as Constant Contact to $10,000 a month for Marketo’s Enterprise edition. Other vendors, such as

Vertical Response and LoopFuse, base their pricing on a per-email or bandwidth-based criteria.

Although the marketing automation space is relatively new, it has adopted a similar delivery model to CRM and other

sales-related software. On-demand (SaaS) and on-premise delivery models are both common.

In most on-premise deployments, the user buys the software license and pays an annual fee for its maintenance. In

addition, the user must also have the infrastructure — datacenter, servers, and so on — to support the software.

On-demand software, sometimes referred to as Software as a Service or SaaS, is delivered via the Internet on a

subscription basis. The terms of these arrangements may be month-to-month or in the form of a contract that can span

as many as two years. In this model, the technical aspects of the software — the computing environment, data storage,

IT staffing, security, backup and recovery and software updates — are all handled by the vendor. This also means

that, typically, getting an on-demand marketing automation solution up and running takes far less time; because the

implementation is essentially similar to dozens of others that the vendor is providing for other customers, all that’s needed

is to perform some data integration, assign passwords and start working.

Since the money for a hosted solution typically comes out of the operating budget, a hosted solution may be an easier sell

during tough economic times. For marketing organizations, eliminating the need for IT staff, computing space and hardware

and associated resources may be critical to getting approval for an investment in a marketing automation solution.

From a pure cost point of view, on-demand solutions start out less expensive than on-premise solutions, but over time

the monthly payments can add up to more than an on-premise solution — researchers place this time frame at between

two and three years. For example, a company with a large IT staff already in place would likely see the balance of value

tip toward on-premise fairly quickly, since the infrastructure and human skills needed to manage it are already in place.

However, for smaller businesses, the value of having multiple IT functions outsourced as part of the hosted marketing

automation contract may justify that additional cost. Buyers have also said that, in most cases, asking the CIO or CFO

for money to build and maintain the data management and storage infrastructure needed for an on-premise marketing

automation solution has been a very difficult proposition; on-demand is far less so.


On-premise solutions, with their significant up-front costs,

are often paid for out of a company’s capital expenditures.

On-demand marketing automation, with its subscription

model, is often paid for out of the operational budget. The

internal budgetary needs and pressures at your organization

can, thus, affect your choice of a pricing model, perhaps

more so with marketing automation than with other

software investments, since marketing expenditures are

often scrutinized more closely than other expenditures. This

tendency at the executive level has also contributed to the

popularity of on-demand marketing automation software.

Defining ROI

Any adjustments made to a sales process have the ultimate

goal of increasing sales, revenue and margin. However,

isolating factors from one another is difficult and can make

using the bottom line a misleading indicator of how well a

marketing automation investment has paid off. High-level measurements, such as improved productivity, are also difficult

to measure and can provide misleading indications of marketing automation effectiveness. It’s important, however, to

develop an ROI case to demonstrate how the technology is affecting your organization. If you’re a large organization,

this is useful in easing any concerns from the CFO and financial side of the business; if you’re in a small or medium-size

organization, an ROI case can help ensure that you have made and continued to make the right investments, especially if

you have selected an on-demand solution and want to make sure it’s the correct one.

“Demonstrate how a new system will allow you to understand the ROI and revenue generated from all marketing and

sales efforts so that you can choose to cancel programs that don’t work and implement more of those that give your

organization a positive return,” said Erich Flynn, CEO of TreeHouse Interactive. “If possible, bring the CFO into this

discussion. If you can show increased revenue, and if your system can show real revenue dollars generated against

campaign costs vs. esoteric concepts like sales qualified leads, the CFO will likely be one of your best advocates.”

There are sales-related metrics that can provide more realistic insight into how well a marketing automation solution is

performing than the broad, organizationwide criteria often employed. If you’re a larger organization, make sure you have

an ROI case on sales metrics and work with your vendor to implement the solution most applicable to your company.

Some examples of these include:

Time to lead qualification•

Order to cash •

Churn rates•

Error reduction•

Cross-sell ratios•

Increased orders•

Accelerated speed through the sales pipeline•

“An SaaS vendor gives you two strong advantages – you can get rid of the headache of managing software and servers internally, and also eliminate any

IT bottleneck.”

Erik BowersPresident and VP of ProductsMarketBright


VendorsAlthough the need for an up-front data migration strategy is not as critical for marketing automation as it is for CRM, you

should get your vendor’s policies for moving marketing contact data in writing at the start of your engagement. Should you

decide to upgrade, change vendors or bring your marketing automation infrastructure in-house, knowing this in advance

will help you plan and preserve your investment in customer information. SLAs (service level agreements) and data

recovery and security policies should be in place from the first day a solution goes live.

Since ease of use is a pressing buyer

concern, a look at the interface will be

crucial. That makes a demo — ideally,

with real data — vital. If a vendor doesn’t

offer a fully functioning demo, beware.

When you look at the demo version,

make sure that you include both the

people who will be using it — marketing

representatives — as well as the people

who will be championing it — the

CMO or vice president of marketing,

sales vice presidents and possibly the

CIO. Since it is very important that

all members of your marketing team

can use the solution, a look at the

interface is very important — a cluttered

or hard-to-use interface may mean

that only a few trained people in your

organization will be able to master the

“Buying a marketing automation solution is not a CIO decision, it is a CMO decision. The only time the CIO might get involved is in verifying that the security of the data meets a corporate standard.”

Kevin Joyce

CMO

Market2Lead

How Different Buyers Approach Cost Considerations

Basics Buyers: Emphasis on low initial cost and low maintenance overhead, often delivered

in an on-demand model

Fast Featurists: Emphasis on low initial cost, with some budget directed toward integration

(usually through internal resources)

Enterprise Buyers: Emphasis on low lifetime costs, with higher initial costs and significant

investment in IT resources and maintenance

Team Players: Emphasis on providing good ROI for the lifetime of the solution; initial costs

to be shared between sales and marketing


application, which can lead to productivity-sapping bottlenecks. Having buy-in across this spectrum of players will

make it easier to roll out the system when it goes live.

With the rapid evolution of this technology, it’s important to understand your vendor’s plans for updates and upgrades to

its product. Is the vendor ahead of the curve in adding features for developing marketing strategies and technologies, or

does it lag, or is it incorporating too many features that needlessly increase the complexity of the system? How often are

upgrades made and announced? How well are these upgrades organized — are they grouped around concepts, or are

they simply a random collection of new features?

The acquisition of a vendor can cause significant disruptions in service and in the evolution of a product line — especially

if that product is target for phase-out by its new parent. Luckily, consolidation in this space does not seem to be a looming

threat for most vendors. The number of buyers who see the need for the technology is high, but the number of buyers who

have actually pulled the trigger remains modest. With such growth potential, few companies are eager to sell out. However,

there could be some significant consolidation beginning in 2011 and 2012, according to some industry observers.

Finally, examine the history of the vendor around costs and fee increases (subscription fees for SaaS vendors or software

license fees for on-premise providers). Sudden out-of-character jumps in recent price structures may signal a company

that’s unsure of itself, and that may mean a less-than-desirable partner.

The Sales Process Before starting the process of buying a marketing automation solution, you should first understand your company’s real

needs. “There is no sense in automating processes that are bad to start with,” said Steve Woods, co-founder and CTO of

Eloqua. “If an organization is thinking of buying a marketing automation product, they should be sure they are comfortable

changing the processes in their marketing organization.”

If you’re ready for change, first take into account the size of your sales and marketing team. Some solutions are targeted

at teams of specific sizes — Infusionsoft aims at smaller organizations, while Unica targets large organizations. A good

match will help you maximize the value of your final choice. Also, pay attention to who’s on your team making the decision

about which product to select. There are solutions in place that were chosen exclusively by marketing people, but these

tend to end up siloed on the marketing side and do little to break down the sales-marketing gulf. Instead, find allies within

sales and include them in the decision making process; this will give them trust in the leads generated by the system.

This doesn’t mean just a token sales rep, but senior staff in your selling organization. In fact, said Phil Fernandez, the CEO

of Marketo, involving a vice president of sales or some similar executive with responsibility for sales “is the single most

important thing you can do” to get the most out of your choice of marketing automation product.

Next, consider workflow and external partnerships A documented lead management process would be very useful

to have in hand, including definitions of marketing-qualified leads, what data should be collected and exchanged

between sales and marketing, rules for making updates, how leads are inserted into the system and how hot leads

are fast-tracked to sales. Having this would allow you to map technology to existing processes. Beyond workflow, you

must understand who will be working with the system. Who will need access to your marketing automation system

— copywriters, affiliates and external partners, sales managers or sales staff? Does your staff work remotely or on a

contract basis? Do you work with agencies?

Understand where and to whom lead alerts will need to go — individual sales reps, sales managers, inside sales staff,

partners or others in the organization.


Also, it’s important to consider the transition path from whatever method you’re using for marketing campaigns now.

Companies currently using marketing agencies may expect a marketing automation solution to be a direct replacement

for what their agency is doing. This is a bad assumption, because this software can have a steep learning curve, one that

agencies climbed long ago.

Starting the Buying Process After determining your company’s general needs, your internal IT sophistication, your budget position and the way your

marketing and sales teams work, you can begin to intelligently examine your options for a marketing automation solution.

First, make a formal list of required features a marketing automation solution must have to be successful in your

organization. Start with the current pain points and add in areas you’ve targeted for future improvements. This should be a

complete list of what you want as part of your marketing automation solution. Weigh this list and divide it into two groups

of features: the “must-haves” and the “nice-to-haves.” Must-have features are exactly what the name suggests: features

whose absence will render an implementation useless. “Nice-to-haves” are those features that clearly would result in

productivity gains, better organized marketing efforts or more effective management of leads, but address issues that

are not pressing problems now, do not appear to be pressing problems in the near future, and could be put off until later

should budget and manpower become more readily available.

Next, determine the degree of integration the solution will have with other business systems within your organization.

Some marketing automation tools can be run as stand-alone products, but most are more effective when they tie

the sales process through a CRM system. This makes it much easier to import data into other systems to implement

marketing, customer loyalty programs and advanced analytics. If there is a company-wide desire to combine marketing

automation with CRM, SFA, ERP, accounting, order fulfillment, marketing or business intelligence applications, that task

will be made easier or harder by your initial choice of marketing automation solution.

Buyers should understand their own internal resources for the implementation of a solution and make an honest

assessment of whether a third-party consultant should be employed for vendor selection, implementation or both.

The need for easy integration with existing systems should influence where vendors end up on your final list — do not

underestimate the impact a choice now could have on your IT resources later.

“Buyers need to understand what it is they really need. Is it more information around what prospects are doing? Is it more leads? Better leads? Keeping junk out of the CRM? These solutions are like Swiss army knives. It is difficult to evaluate the vendors (who each have their own strengths) without knowing your objective.”

Adam Blitzer

Vice President of Marketing and Co-founder

Pardot


Once you have a list of the features you need and an idea

of the technical characteristics that a product must have to

mesh with your existing infrastructure, it’s finally time to look

at specific vendors. One good way to do this is to look at

comparison guides (such as the one on InsideCRM.com) that

present the various solutions’ features in a straightforward,

unbiased fashion. Remember: The must-have features are

critical to your business. Any solution that lacks one or two

must-haves should be removed from consideration, regardless

of its price or other factors not related directly to functionality.

This elimination round should whittle down the field to a

short list of vendors. Rank those vendors against how well

your research indicates they handle those must-haves. For

instance, if your marketing team has had great success with

direct mail, only consider solutions that allow you to track

the effectiveness of off-line marketing and gives you an

elegant way to input responses to direct mail campaigns. Similarly, if the only significant marketing your company does is

through email, look for a product that is strong on things that can further improve email campaigns. This is not to say that

you should exclude any specific media type from consideration, since what works now may not work later. The reason

for keying on must-have features is that they are likely to provide immediate results, build greater enthusiasm for the

marketing automation system and deliver ROI quickly, an important consideration for any marketing manager who may be

asked to justify an investment in technology.

With your ranked list in hand, start contacting the vendors and request a demo, and ask for a trial period to evaluate

their solutions. Again, having input from your company’s marketers and marketing managers is very important during

this stage, and this is also a great time to solicit input from the IT team members who will implement and support the

solution. Also, marketers should have preliminary discussions with sales about the rules for various solutions’ lead scoring

systems. The vendor systems vary on how scores are managed and calculated, so sales’ input is very useful. This can be

a very important step for marketers in helping them bridge gaps with sales teams. The demos should provide you with a

concrete idea of how the marketing automation products on your short list operate and how people in your company will

relate to them. Re-order the list accordingly and move to the next step in the buying process.

Return to the top candidates on your list and discuss the terms and costs in depth. For on-demand solutions, obtain a

specific set of costs for everything associated with a product — not just the software costs, but also the costs of storage,

customization and other aspects that may be hidden in the basic pricing. This is an excellent time to discuss support,

especially if you are planning to buy an on-premise solution.

Using a Third Party or Vendor Professional Services Although most marketing automation implementations in small organizations are generally straightforward, especially

when an on-demand solution is used, the need to integrate marketing automation with other systems in the organization,

or to migrate data from an existing marketing application, may require the assistance of a third party — a systems

integrator or a consultant. If you work through a systems integrator or consultant, your ability to choose from a wide range

of vendors may be somewhat limited, since some resellers work with a limited number of vendors. That said, this limitation

“It used to be that a marketing automation company could demonstrate its value to the marketing department alone, but today you need to have a good value proposition for sales,

marketing and finance.”

Erich Flynn CEOTreehouse Interactive


is not as pervasive for marketing automation as it is for other

applications, such as CRM. A partner can be a major asset if

your company does not have the in-house expertise to work

through the above steps.

If your company does not have the time for serious

discernment or lacks the knowledge to be confident in doing it,

the increase in time-to-solution and in confidence in the final

decision could offset the higher cost of employing a reseller.

Support Process Buyers should always seek out data on vendor support

satisfaction levels for real-world users of the solutions

they’re looking at. Even better is speaking to other users of

the products. Not all support offerings are created equal,

and knowing exactly what each vendor’s idea of support

comprises will save you from headaches — and dashed

expectations — down the line.

The support component for marketing automation is one

of the more confusing aspects of this technology. Past

solutions have been targeted more at single “super users”

within corporate marketing departments, and support was aimed at helping these users. The next generation of

marketing automation products is more attuned to ordinary users, so the questions asked of support are changing.

How well those questions are answered can vary widely from vendor to vendor.

Many vendors are seizing on the opportunity to provide some support in the form of customer-to-customer help through

communities, wikis and other social media tools. “We sponsor an annual user conference, plus regional workshops,

release eBooks, and update a blog that helps foster a dialog with and between our customers,” said Dave Lee, the

vice president of marketing at Infusionsoft. Most vendors offer the standard phone support as a basic part of the sale

of a product. As mentioned above, it’s very important to test-drive these systems to make sure they will work for your

organization, and that includes the support component. Have your marketers prepare questions regarding what they’re

confused about and have them ask support for answers, then gauge the quality of the response. How well their questions

are answered at this early stage will provide an excellent barometer of how well the vendor will provide ongoing support.

Even as marketing automation products target less-sophisticated users, it’s still important to remember that what is

perceived as bad support is often due to cultural mismatches between the vendor and customer. Some organizations

want help over the phone, others over email. Some organizations have different expectations of response times. Some

vendors simply don’t provide support at the proper level of sophistication for the company size that they are targeting.

Keep this in mind as you look at vendors, and pay close attention to where your organization will interact with theirs.

“We sponsor an annual user conference, plus regional workshops; we release eBooks and update a blog that helps foster dialog with and between our customers. Creating a space for users to share ideas and express expert advice is another way to inspire creative thinking about

marketing.”

Dave Lee Vice President of MarketingInfusionSoft


Buyer Dissatisfaction — What to Watch For The ultimate goal of marketing automation is very clear: to increase the rate of qualified leads being collected and passed

to sales. To do that, the system needs to help segment customers, make it easy to tailor messages to those segments,

and to create an environment where nurturing campaigns can be automated and rolled out easily and quickly in response

to changing business conditions and prospect behaviors. If these activities are not made easier, marketers will become

dissatisfied and may not use the solution to its fullest capability. If the ultimate goal is not reflected in increased rates of

closed sales, the dissatisfaction will come at a much higher level within your organization.

Luckily, these goals are well-defined, and typically users are not as likely to change their marketing automation

goals capriciously.

What Different Buyer Types Need From Their Vendors

Basics Buyers: Vendor focus on straightforward or standalone marketing automation tools

and cost-effective but readily available support

Fast Featurists: Vendor commitment to integration in a modular fashion and support attuned

to the level of technical sophistication of the organization

Enterprise Buyers: Vendor whose support process is scalable, whose integration knowledge

is significant and whose product road map is directed toward increased

application integration

Team Players: Vendor whose support process can accommodate a variety of levels of

sophistication and can readily help in integration of marketing automation

with SFA and CRM


4 Tools

Don’t get left in the lurch with a lot of decisions to make and few tools with which to make those decisions. Below, we’ve

included tools and worksheets that will make your product requirements, vendor choice and purchasing decisions easier.

Rip these out, pass them along to others in your company or use them to justify your purchase. Whichever route you go,

rest-assured that your decision will be a more educated one.

10 Steps to Purchasing Marketing Automation

Marketing Automation Product Requirement Worksheet

Vendor Universe


Buying a marketing automation solution is a complex process, and perhaps the most confusing aspect of this process is

not the actual purchasing process, but the preliminary steps involved in learning about your own organization, its needs and

what features would help address those needs. We’ve boiled down the marketing automation buying process to these 10

steps; following this road map can help simplify the process and ensure that you’re on the road to buying something that

will supercharge your team.

Know your needs:1. Examine how well your marketing efforts are working and do an assessment of what needs

improvement. Look for the pain points, the missed opportunities and the areas that are preventing your efforts from

resulting in revenue. By doing this up front, you’ll have a good idea of what features you should look for later.

Understand your marketing staff and its processes: 2. Unless your staff is ready to use a marketing automation

system, the money spent will be a wasted investment. Luckily, most marketers have their processes down and are quickly

able to see how they would map to a set of automated functions. Check to see if there are any who are not prepared for

the switch and get them on board before the change comes.

Determine how deeply your marketing automation must integrate with the rest of your organization: 3. Are

you planning to run your marketing automation system as a department-only effort, or will you integrate it with CRM, SFA

and other business systems? If the answer is yes – either now or sometime in the future – now is the time to know this.

Decide between single channel or multichannel marketing: 4. A single channel system (email) will be easier

to put in place than a multichannel system, especially one that incorporates off-line marketing media such as direct mail.

Decide on which approach is best for your organization and factor in future plans.

Learn sales department’s definition of a qualified lead: 5. You’ll never be able to pass qualified leads to sales

unless you understand what that term means to your own sales team. Matching their definition with the definition used by

your marketing automation vendor is a good way to short-circuit resistance to a marketing automation solution before it

ever happens.

Assemble a list of required must-have features and nice-to-have features: 6. Weigh the things you know

you need, the things from which you can see benefits in the short-term and long-term, and the features that seem like

mismatches to the way you run your marketing programs. Put these lists of features together; this becomes the first

checklist in deciding what vendor may be right for you.

Research solutions that include the features you’ve identified as critical: 7. Hit the books. This is the time

to do some real study about the products that are out there. Use online resources, talk to vendors, and, most importantly,

speak to your peers about their experiences with marketing automation. A wise man learns from his mistakes; a wiser

man learns from the mistakes of others.

10 Steps to Purchasing Marketing Automation


Examine the payment options and costs – including support costs –to further narrow the field: 8. You

must establish whether your company is a better fit for an on-demand application or an on-premise application.

Because virtually all vendors in this space are either one or the other, this will be a useful first cut to help narrow

your vendor choices.

Get sales in on the act: 9. Involve sales in the decision process – not just in looking at demos but in explaining

how they would like to receive leads and what criteria make a contact a good lead in their view. This input could be

indispensible in getting sales to act on the leads your marketing automation system brings in once it’s up and running.

Ask for demos to determine which solutions could be the right fit for your organization: 10. This is the

stage when a test-drive can separate solutions that look good on paper from solutions that look good in use by your

marketing organization. Demos will answer many questions and raise some new ones – keep track of them and be sure

to get satisfactory answers from your vendor. After all, if the solution’s a good one, the vendor should be using it, too – and

if he’s using it, he’s answered the same questions you currently have at some point.


Marketing Automation Product Requirement Worksheet

Using this worksheet, you can keep track of features both in relation to your needs and to how well vendors meet those needs. To the left of the features, mark whether a feature is a must-have or a nice-to have feature for your company. To the right, evaluate vendors on how well they met those important features. Do not rate vendors on features that are not important to you. At the end of the process, you should have a score for each vendor; the highest-scoring vendor is likely to be the best option for your particular marketing automation needs.

Step one in this process is to identify in the boxes at left which features are “must-haves” and which are “nice-to-haves,” ones that bring benefits to your organization but are not critical to the success of your marketing automation implementation. Then, score how well vendors perform in the categories you’ve identified. Fill in your ratings in the columns to the right, using a scale of 1 to 5, with five being best. When you’re done, add up the columns; your final score should give you an idea of which vendor’s solution best fits your needs.

Must-Have

Nice-to-Have

Requirements Vendor 1 Vendor 2 Vendor 3

Email Mgmt. Requirements Email Templates Personalization Capabilities Email Scheduling Tool Unsubscribe Management Track Sent Emails Deliverability Tools CAN‐SPAM Compliance

Section Total

Lead Gen Basics Registration Tools Membership Management

Tools

Surveys Section Total

Campaign Mgmt. Requirements Email Campaign Templates Landing Page Management Landing Page Templates Customized Microsites Integration with Off‐line

Marketing Channels

Integration with Mobile Marketing

Support and Analytics Marketing Asset Management Progressive Profiling

Section Total


Must-Have

Nice-to-Have

Requirements Vendor 1 Vendor 2 Vendor 3

Lead Nurturing Requirements Real‐Time Response Tracking Web Site Behavior Tracking Lead Scoring Nurturing Reporting

Section Total

Lead Mgmt. Requirements Import from File Manual Import Lead Segmentation Real‐Time Alerting Lead Routing

Section Total

Technical Requirements APIs Integration Contact Database Data Hygiene Tools Bounced Email Auto Removal Marketing ROI Reporting Keyword Management Performance Dashboard

Section Total Service & Support Requirements Basic Support Package Availability of Premium Support Self‐Help Support Availability Wikis, User Forums and Other

User‐Based Support

Phone Support Email Support IM Support Section Total


The following list summarizes the vendors in the marketing automation space, and is current as of March 2009. Although

we have tried to be comprehensive, there may be smaller vendors or marketing automation modules to other business

applications we have not included.

For reasons of brevity, we have excluded vendors that are primarily focused on CRM from the listing. Many CRM solutions

include components of marketing automation; we have focused on vendors that offer solutions sold as marketing

automation and not as a component of another solution.

These vendors are broken into several categories to help organize a view of this space. Online specialists are vendors

whose solutions focus exclusively or nearly exclusively on email and Internet-based responses to marketing efforts.

Multichannel vendors provide a more complete solution that includes off-line marketing channels in the mix. We have also

divided them into on-demand and on-premise vendors. Within these categories, we have further divided vendors by their

pricing models. Be aware that vendors may appear in multiple categories.

Online Specialists

Vendor Universe Summary

Flat Rate (unlimited usage)

Canterris

Captavi

Infusionsoft

Manticore Technology

Omniture

Protus

Silverpop

Treehouse Interactive

The following list summarizes the vendors in the marketing automation space, and is current as of March 2009. Although

we have tried to be comprehensive, there may be smaller vendors or marketing automation modules to other business

applications we have not included.

For reasons of brevity, we have excluded vendors that are primarily focused on CRM from the listing. Many CRM solutions

include components of marketing automation; we have focused on vendors that offer solutions sold as marketing

automation and not as a component of another solution.

These vendors are broken into several categories to help organize a view of this space. Online specialists are vendors

whose solutions focus exclusively or nearly exclusively on email and Internet-based responses to marketing efforts.

Multichannel vendors provide a more complete solution that includes off-line marketing channels in the mix. We have also

divided them into on-demand and on-premise vendors. Within these categories, we have further divided vendors by their

pricing models. Be aware that vendors may appear in multiple categories.

Flat Rate (with usage caps)

Active Conversion

Bronto

Constant Contact

ExactTarget

Genius.com

iContact Corp.

Lead Genesys Inc.

Lyris

Market2Lead

Marketbright

Pardot

Responsys Inc.

SoftVu

Swiftpage



Aprimo

Eloqua

Marketing Pilot

Neolane

Right On Interactive

Unica


Ajexa

Entiera

First Wave

Marketo

Saepio

TFC

Bandwidth Based (based on usage)

Active Conversion LoopFuse

On-Premise Solution Vendors

StrongMail Systems Inc.

Multichannel Specialists


Aprimo

Canterris

Constant Contact

Eloqua

First Wave

Infusionsoft

Manticore Technology

Marketing Pilot

Neolane

Omniture

Right On Interactive

Treehouse Interactive

On-Demand Solution Vendors



Active Conversion

Ajexa

Bronto

Captavi

Entiera

ExactTarget

Genius.com

iContact Corp.

Lead Genesys Inc.

Lyris

Market2Lead

Marketbright

Marketo

Pardot

Protus

Responsys Inc.

Saepio

SoftVu

Swiftpage

TFC

Bandwidth-Based (based on usage)

Active Conversion LoopFuse

On-Premise Solution Vendors

Aprimo

First Wave

Marketing Pilot

Neolane

Saepio

Silverpop

StrongMail Systems Inc.

Unica


About FOCUS

Our Mission

Our mission is to support business professionals’ critical purchase decisions by creating and distributing the highest

quality, most relevant purchase research and tool sets.

Our Approach

To ensure maximum insight and relevancy, Focus has designed a four factor approach to buyer-centric research. All

research at Focus begins with defining the buyer factor. Categorized in our research as Buyer Types, the buyer factor

identifies the buyer needs and preferences in a market that make a difference in selecting the right product and vendor.

Buyer Types are studied and developed based on Focus’ interaction with thousands of buyers across a category. The

buyer factor in turn shapes Focus recommendations on how buyers approach three other critical factors: 1) product

requirements, 2) cost considerations and 3) vendor relationships.

Buyer Feedback

In addition to speaking with industry experts and other participants, a critical priority is to integrate feedback

from experienced buyers. We speak with thousands of buyers each month and conduct our formal buyer surveys

throughout the year.

For more information on our research approach, please visit Focus.

www.focus.com/about/research-approach

Marketing Automation Buyer’s Guide › wp-content › uploads › 2010 › 07 › bg...Marketing...

Documents

Transcript of Marketing Automation Buyer’s Guide › wp-content › uploads › 2010 › 07 › bg...Marketing...