Are You Mature Enough to Invest in Marketing Automation?

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The word automation clanks like steel hitting steel—unemotional, cold, brutally purposeful. I see spindly robotic arms on perfectly straight assembly lines, tirelessly performing identical movements. Grab part #A-478 in metal pincers. Position onto 8 millimeter bolt. Rotate 4.82 revolutions. Repeat, ad infinitum.

Coupling flamboyant marketing to the un-sexy uniformity of automation seems oxymoronic. An emotional business discipline juxtaposed to a manufacturing practice that eschews emotion. Gigantic biz-dev systems chugging in a daily monotony, with warm and fuzzy lead nurturing functioning side-by-side with hard and calculating data mining. If software could make noise, these systems would screech and hiss.

Still, we press on. “Do more with less!”—the raison d’être for automation, which clever people sell to business development executives, who then sell it to customers. Marketers often cloak automation in a digestible sugar-coated tablet called process innovation. I get it. Customer engagement that’s genuinely personal doesn’t scale. So, voila. Automation! Problem solved!

Well, not really. As Bob Thompson recently wrote in a blog, What’s Next for the Marketing Automation Industry, “After 10-plus years of development, Marketing Automation is not a particularly big space. Not even $1 billion in annual revenue with many small players.” Outside of high-tech, where analysts say marketing automation has achieved 50% penetration, “other industries won’t be easy to enter,” he writes. Why the slow uptake? According to Bob, “this stuff is still way too complicated,” adding “marketing automation is just a piece of the digital marketing puzzle.”

Despite the quirkiness of tying two odd-couple words together, there’s nothing wrong with Marketing Automation. But we cleave to faddish techno-talk about its transforming power. Here’s an example: “This conversational marketing technology is easily integrated with all well-known CRM and SFA systems including salesforce.com, Oracle/Siebel Microsoft CRM Dynamics, and Pivotal CRM, with bi-directional synchronization between the SFA and the marketing data mart. Unified demand generation and lead management with CRM/SFA and lead scoring capabilities can help solve these challenges, and bridge the coordination gap that often exists between marketing and sales.”

Phew! Got that? In this case, the coordination gap begging to be bridged is between the automation geeks and marketing professionals.

A gap that will become gappier, because in the near future the likeliest buyers for automation technology won’t converse using arcane technology buzzwords and cryptic acronyms. Gartner predicts that by 2017, “Chief Marketing Officers will outspend CIO’s on technology . . . the onslaught of interactive marketing and digital commerce—starting with the Web and email and more recently venturing into mobile and social interactions with customers—is behind much of this technology spending,” according to an article in InformationWeek (Spend Trend, February 11, 2013).

Marketing automation must gain adoption from people outside the IT cognoscenti, and proponents will have to stop indiscriminately hurling wet technology pasta at the wall, impatiently waiting to see what sticks. Instead, they must first confront a marketing problem so obvious that few people see it: some people simply don’t give a tinker’s damn about marketing automation. Who are these people, and how can they be so oblivious?

For the answer, I borrowed a model called CMM—Capability Maturity Model—from Information Technology. In essence, the CMM identifies four levels of information technology use in business—Basic, Standardized, Rationalized, and Dynamic. At the lowest level, Basic, organizations consider IT a cost center. “Our IT plan for next year? Cut the department budget by 16%!” Convincing executives at such companies they need more sophisticated software compares to walking up to a squirrel and screaming “thirty-nine!” several times, hoping the confused animal will extract meaning and calculate something. I know from experience.

Move up the hierarchy from Basic, and IT deployment becomes more consequential—and more valuable—for enterprises. Organizations at the top level, Dynamic, use information technology strategically, inextricably embedding it in their brand, product or service. Netflix is a stellar example. You can find others next time you’re surfing the Web, or riffling pages in a trade journal. Nail a company’s CMM level, and you know whether its executives think of IT as just a mess of cables, connectors, and barely-usable software, or something that produces value.

Similarly, with business development sophistication, companies fit into different strata. And as with IT, some companies maintain resources, strategies, and tactics that are matched to their competitive situation–more or less. Their executives are less likely to show excitement when automation vendors knock–or rather, e-mail and Tweet. Others display palpable pain: “For the Nth consecutive quarter, our revenues did not meet plan.” Like CMM, the Sales Maturity Model (SMM) has four levels—Revenue Center, Efficient Revenue Center, Loyalty-driven, and Value-interdependency.

Revenue Center (CMM level Basic): Companies that regard their sales operations as Revenue Centers are product and transaction focused. They view customer purchases as the end-point of the sales process, and there is scant understanding of the buying process. Conversations with customers have ephemeral value because they concentrate on “closing the deal.” Revenue Center companies have a unilateral communication strategy that emphasizes “getting the message out.” Prospecting is a “numbers game,” and revenue gains are dependent on increasing the number of prospecting contacts. Information is stockpiled, with little information shared internally or with customers. There is weak collaboration between sales, service, marketing, accounting, and operations.

Efficient Revenue Center (CMM level Standardized): Efficient Revenue Centers operate in companies concerned with reducing selling costs, finding more productive ways to generate revenue, and increasing revenue per transaction. Companies seek “best practices” and tools that facilitate individual productivity and efficiency, and expect that increased profits will result. Efficient Revenue Center companies segment prospects into target markets, and understand which targets are likely to yield the greatest profits. Customer purchase decisions are largely seen as the domain of individual “key decision makers,” and tactics tend to ignore the dynamics of buying networks in purchasing. Channel selling strategies are not tightly integrated with direct sales operations.

Loyalty-driven (CMM level Rationalized): Companies that are Loyalty-driven have transitioned from product-centric operations to customer-focused. Loyalty-driven companies want customers that are not only likely to repeat purchases over time, but will become enthusiastic product evangelists. They build corporate culture around the ideal of customer centricity. Loyalty-driven organizations have adopted processes for communicating and listening both internally and externally, sensing and responding to customer problems, and maintaining high-quality end-to-end customer experiences. They measure success not only on revenue received, but on value delivered. Marketing and sales use longer planning horizons, and purchase transactions are considered events on a customer-relationship continuum—not as a process end point. Information is shared within the company, as well as with customers and channel partners.

Value inter-dependent (CMM level Dynamic): Value inter-dependent companies have a unique feature: it can be difficult to distinguish between vendor and customer. Selling and buying processes are tightly integrated. Companies that are Value inter-dependent engage in co-creation of products and services, and each organization has a strategic stake in the other’s success. Networks of people from multiple departments engage in collaborative teams, and there is open sharing of ideas for innovation, revenue generation, and cost reduction. Information tends not to be stockpiled, but flows freely between organizations. The interactions of social networks are well understood, and people are valued for specific skills and capabilities, rather than seen as “targets,” or simply job titles. Value is transferred as much through “relationship capital” as through products and services.

The mistake I see so often is making the techno-chauvinistic assumption that every company strives to hold a coveted spot on the top rung of the maturity model. Anything less constitutes a flawed business plan. But the issue isn’t whether there’s a right or wrong maturity level, or a good-better-best. Instead, a company’s sales maturity level must at least match the market situation in which it competes or will compete. If uncorrected, any gap will create a revenue trajectory that won’t be pretty. While companies at the Revenue Center level are not necessarily automation luddites, they tend to have less of it than those at higher levels. As companies move up the hierarchy, you often find marketing automation more integrated and more embedded in the work people perform—for collaboration, workflow, analytics, planning, and decision making.

Still, a company’s maturity level has less to do with the marketing automation it uses, and everything to do with how executives think about revenue. Specifically, how they think about business growth, value delivered to customers, value returned to the organization—and role of business development for achieving each of these.

Republished with author's permission from original post.

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