I have a Magic 8 Ball on my desk. Its about 30 years old; surely the age of sage wisdom for a predictive plastic orb.
So I posed this question (asking it three times to mitigate the fluke-factor): Will smaller companies increase their adoption of marketing automation this year?
To which Magic 8 Ball replied:
- Answer 1: It is certain
- Answer 2: Outlook good
- Answer 3: Reply hazy try again
Twice is a trend, right?
Fortunately, the evidence gets better.
Much better, in fact, according to new research from Software Advice, whose 12-month study (Jan 1 Dec 31, 2013) analyzed 896 interactions with marketing automation software buyers.
The results are published in a new report: Marketing Automation Software BuyerView 2014.
The takeaway: Small and mid-sized businesses are actively considering marketing automation as a viable tool that can increase efficiencies, improve lead management, and drive revenue.
Its a good day when Magic 8 Ball and empirical research agree.
Findings that surprised
SMBs take a seat at the table
A handful of findings raised an eyebrow, though the first was less surprise and more happy confirmation of what Act-On sees every day (and the jump point of this blog post):
A large majority of the companies searching for marketing automation software were small and mid-sized.
Here are the numbers:
Employee Count of Buyers Companies
Said Software Advices marketing analyst and author of the report Derek Singleton, The prevalence of small companies in the sample is somewhat surprising, given that mid-size and large companies have more aggressively adopted marketing automation systems. However, many vendors are now focusing on selling to the small and mid-size business market.
Marketing methods are all over the yard
Of equal intrigue was data about the systems that buyers were using to manage their marketing:
Buyers Current Methods of Managing Marketing Activities
See the red pie wedge labeled 21%? Thats the percentage of companies using no software systems at all to manage their sales and marketing. Most likely they used (and possibly still use) spreadsheets and one-off emails to generate leads and create demand.
Two other data points to note:
- Only 9% had a marketing automation system in place; meaning 91% were evaluating marketing automation for the first time among the studys sample.
- A mere 7% of those surveyed used an email marketing program.
Seems very low, Act-On CMO, Atri Chatterjee, told CMSWire in reference to the second bullet point. We see 25% of our wins coming from companies currently using email marketing software and looking to bridge the gap from email to digital with marketing automation.
Im in the same camp as Atri email is the most highly used marketing channel and tactic among businesses of all shapes, sizes, and industries; thus, 7% feels inaccurate. Perhaps the respondents didnt feel they used email marketing software to manage their marketing activities but as a tactical point solution to send out emails.
Findings that didnt surprise
Lead management is the top motivator
Unsurprisingly, improving lead management was the primary motivation for marketing automation buyers 40% voiced the need to improve their lead nurturing and lead scoring capabilities.
Automating processes (e.g., triggered messages, drip campaigns) was second on the list, which makes sense since these buyers were, after all, evaluating marketing automation software.
Top Reasons for Evaluating Marketing Automation Software
Leads continue as major features focus
When it came to top-requested features, the theme continued, with leads and data creating a predictable trifecta. The chart is below. Here are the percentages:
- 81% – lead nurturing
- 70% – reporting and analytics
- 64% – lead scoring
Most Requested Marketing Automation Features
The overall focus on leads is consistent with what weve observed, particularly among businesses new to marketing automation (which comprised the majority of the studys respondents). That is:
Leads are of the utmost importance to keeping the doors open and the lights on.
Getting leads into the funnel, using data and analytics to gain incremental insights over time, nurturing and scoring leads effectively, measuring results, and iterating to improve these are all essential and basic needs for any business.
Social and segmentation are meh
Although social media marketing receives a lot of hype and import often justifiably so its no surprise that marketing automation buyers dont rate it as a must-have feature (a low 6%). Two reasons that I see are (1) there are innumerable options readily available for managing social media marketing, and (2) many companies are not convinced about socials ROI, and thus are still experimenting with the medium.
Segmentation is another story. Its not surprising, but it IS illuminating. At least to me.
Heres the data: Out of 896 buyer interactions, only 3% cited segmentation as an important feature for marketing automation. Assuming each buyer interaction was unique, thats a mere 27 participants.
One explanation is that segmentation (and social media marketing and even campaign management, for that matter) is not the biggest business pain point. Lead management is. Everything else is secondary until the funnel is humming.
So by that rationale, it makes total sense that segmentation ranks in the basement.
But heres why its illuminating:
One does not have successful lead management without segmentation.
Theyre complementary. Yin and yang. Hand in glove. What good is learning about your prospects and customers who they are, what theyre interested in, where they are in the buying cycle if youre not going to use that intelligence to deliver a more valuable experience to them?
Segmentation is what allows you to take advantage of your data and ultimately communicate with your prospects and customers effectively.
And this disparity between lead nurturing and segmentation suggests that among service providers and vendors, there is work to be done to help marketers better connect the important dots and harness the power of automated digital marketing.
And there you have it
As this study and an increasing bevy of research supports, marketing automation is mainstream. For small and mid-sized businesses, 2014 is shaping up to be a good year for marketers, as more and more recognize the power and ROI potential of marketing automation and are making the business case to adopt it.
As Magic 8 Ball would say, You may rely on it.
Did you know:
Forrester recently identified Act-On as the only leader for both SMBs and large enterprises? Download the full Forrester Wave Report »
Image of Magic 8 Ball from ursonate, used under a Creative Commons 2.0 license.