I just read a thought-provoking report titled: Forrester Data: Marketing Automation Technology Forecast, 2017 to 2023. Having worked in the CRM industry, including co-founding a marketing automation (MA) software company, the trajectory (and complexity) of the industry has been fascinating to witness. The below graphic from Martech, will give you an idea of the enormity and pace of the growth. Amazingly, the 2011 report listed about 150 vendors while the 2018 graphic shows almost 7,000. It will be interesting to see how many of these companies are still around in five years. Hopefully, many of the good point solutions will be acquired as part of full-suite solutions.
Getting back to the Forrester study, a couple of important data points stand out:
- 55% of participating companies plan to increase spending next year versus only 7% who will decrease spending. This certainly looks like a very strong trend with no slowdown in sight.
- Global marketing automation technology spending will reach $25.1 billion by 2023. This represents a 14% compounded annual growth rate for the next five years.
- B2B technologies are growing the fastest, but are starting from a smaller base.
The report also discusses why digital complexity is driving marketing automation growth. Obviously, we marketers are faced with a whole lot more data, media, distribution channels, and choices on how to spend our precious budget dollars.
One more important point made by the article: Marketing automation technology can drive marketing ROI – but this doesn’t mean it has to. We all want the ability to measure the impact of what we do, how it contributes to company revenue, and what we need to do to drive continuous improvement. It’s not like the old days when John Wanamaker, founder of Macy’s, stated, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Try saying that to your CEO today!
So what does all this mean?
- Focus on the buyer’s journey. Read my recent CustomerThink article on this subject. Today’s top marketers figure out where the buyers are, and how they prefer to buy, then make sure they are facilitating the buying cycle, not the sales cycle. This is hard work, but can be transformative.
- Lead with processes, not technology. Despite the promises, the next cool tool is not going to be answer to all your marketing needs. We always urge our clients to lead with process and then implement tools that best support the process. Many companies have suffered when they were forced to change processes to match the new “magic” technology.
- Buy fewer and simpler tools. Be very careful about technologies that do one or two things very well but are not integrated with your core business systems. And by integration I don’t mean simply an open API (application programing interface) that allows you to build the integration yourself.
- User adoption is critical. Entire countries could be funded by the money wasted on MA technologies that are vastly underused, or not used at all. No matter how sexy, or how big the promise, you cannot benefit from technology unless it is used.
- Really understand what you want to accomplish. Start with this and evaluate every step along the journey on its ability to “Make the Boat Go Faster”. The book and concept are about how a singular and unrelenting focus can take you much farther than a scattershot approach.
As mentioned above, there are currently over 6,800 potential MA tools you can purchase to (supposedly) help you meet your marketing objectives. You may only need one or a few of these solutions to boost your lead-to-revenue performance. I’ve learned the hard way that it is better to spend more time early to make sure you find the right technology, than to try and fix all the problems from a bad selection process later. And if you do go down the wrong path, don’t spend too much time, money and energy trying to fix it. Instead, take Richard Branson’s advice: “In business, if you realize you’ve made a bad decision, you change it.“