Why Marketing Automation is the Next Big Thing

While Customer Relationship Management (CRM) software that attempts to improve the productivity of sales teams is fairly ubiquitous, most small and mid-sized firms are still in their infancy when it comes to using CRM to drive sales results. Yet even as SMB’s grapple with CRM selection and implementation, we are already well into the rise of another sphere of productivity improvements. This time it’s marketing that is getting streamlined, measured, and hopefully, better managed with a multitude of new marketing productivity tools on the market.

The first wave of marketing automation on the market has been centered on email marketing systems. Today there are dozens of vendors that specialize in providing ‘hosted’ email marketing platforms where users. One of the leaders is Constant Contact, which went public last summer and now has more than 250,000 customers. According to CEO Gail Goodwill, the company succeeded by focusing on one important aspect of marketing. “At Constant Contact, the goal was to make it easy for companies to communicate with customers via e-mail - and that was it.”

One reason email marketing is proliferating is that all of us are familiar with using email to generate leads and using specialized software for this makes intuitive sense as a low cost way to get your message out. Even in the current economic environment, many of these email marketing companies are growing rapidly. Most of these vendors have added features to not only to send emails but to also to streamline and track customer interactions. For example, Indianapolis based ExactTarget enables users to create landing pages and establish workflow rules in order to auto-send emails based on user behavior. With about 7,000 clients, ExactTarget focuses more on the middle market and enterprise level clients, which includes firms such as Expedia, CareerBuilder, and Charles Schwab. Like other vendors that serve larger clients, integration with CRM systems like Salesforce.com and Microsoft CRM is critical.

As email marketing vendors have added features to streamline and track customer interactions, another bread of more specialized vendors has sprung up with more automation features such as lead nurturing, scoring, and multistep automatic responses. We spoke with Clate Mask, CEO of Arizona based, Infusionsoft, a fast growing marketing automation vendor that targets small businesses. In fact, it focuses exclusively on entrepreneurial firms with less than 25 employees. Clate uses the term “Frankensteining” to describe what small businesses must go through to patch together disparate systems such as sales productivity, email marketing, web page creation, and online shopping carts. “The SBM market is particularly ripe for marketing automation” according to Clate. “The ability of the Web to drive inquiries to a service is immense, but oftentimes this is too much traffic for SMBs to manage manually. The consumer interest is there, but as more people are able to find the solution or service they need online, a higher demand is placed on the business owner to capture and keep in touch with this potential new business.” Reflecting SMB demand for automated marketing and sales solutions, InfustionSoft has grew its gross revenues by 80% in 2008 and doubled its subscribers to 10,000. For 2009, the company expects to double revenue notwithstanding bad economy.

Market2Lead is a full featured marketing automation vendor that serves many high profile clients including Cisco and Citrix. According to Marketing VP, Kevin Joyce, there are some important fundamental reasons for the industry that marketing automation is catching on now. “The current economy is putting a squeeze on marketing departments and asking them to do more with less”. Another important factor is ‘accountability’ according to Joyce. “Sales is the most accountable function while marketing is least”. Joyce sees tremendous growth opportunities for the industry. Like in Jeffrey Moore’s 'Crossing the Chasm', today’s users tend to be high tech, early adopters. But that is changing quickly. Market2Lead has seen customer bookings grow by more than 100% in 2008 and expects similar growth for 2009.