Marketers’ Chicken/Egg Quandary: Which Comes First -the ROI, or the Tools to Measure It?

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A few months ago, researchers in the UK solved one of man’s timeless riddles: Which came first, the chicken, or the egg? The study found that the chicken came first—sort of. One of the professors called the paradox a “fun but pointless question.”

I thought of this study during our recent webinar with SiriusDecisions analyst Jonathan Block (@jblock), “Making the Business Case for Marketing Automation.” Marketers trying to defend their marketing automation budgets face their own chicken-egg quandary, one that lacks simple answers and is neither fun nor pointless: for defending marketing automation investments, which comes first, ROI or the tools to measure it? While practitioners increasingly understand the value of marketing automation, many struggle with gathering the right data to rationalize devoting precious budget to marketing automation projects. To put the problem in context, we posed a polling question during the session, asking attendees about the state of their current marketing automation efforts. Nearly one-third responded that they have not automated and are having trouble making the business case. Clearly there is still a lot of room for education and growth in this market.

I’ll share some highlights from the webinar in today’s blog and would like to invite readers to share their own success stories for ‘making the case.’ (Additionally, David Raab (@draab) also discussed the topic in his blog, “Hard Data to Justify Your Marketing Automation Investment.”)

The goal for the webinar was to not only to provide an overview of why marketers should automate, but also to give them the support they need to invest in the right tools. Jonathan did a terrific job highlighting the benefits of marketing automation – in terms that could support budget allocations and resonate with the C-suite. Key benefits discussed included demand creation evolution enablement (from field marketing 1.0 to 2.0); visibility and insight (better measurement and diagnosis of the cold to close process); accelerated conversion rates; and lead nurturing optimization.

We touched on numerous reports that quantify the benefits of automation in terms of conversion rates and increased revenues, but despite the numbers, adoption rates for marketing automation software isn’t where you’d expect. Let’s consider these seemingly conflicting data points:

  • According to recent research from Accenture, marketers responsible for driving corporate growth are being hindered in their efforts by insufficient budgets, skills shortages and inadequate tools
  • At the same time, Forrester found that 47% of B2B marketers reported that the biggest obstacle to spending more money is lack of reports that show ROI

The first issue is that of proving ROI – which brings us back to our chicken and the egg discussion. The challenge for marketers has been, “How do I show ROI of my marketing, if I don’t have the tools to measure it?“ Marketers have long had to live in Excel spreadsheets to try to get close, but we all know that the pain and effort involved in trying to calculate marketing ROI still doesn’t give us the confidence in the actual numbers. This is one of the key benefits of marketing automation, it gives you confidence in the numbers and is visible and transparent to sales and senior management so you can have deeper ongoing discussions on the effectiveness of marketing on the sales funnel and overall revenue goals.

But without automation tools in place, you have to start somewhere. We suggest organizations work to establish a baseline / benchmark reflecting where the current marketing program is, then try to project future ROI based on automating. Neolane provides several tools to help shape these projections. Then, once implemented, it’s fairly easy to determine ROI in terms of conversion rates, increased qualified leads and other intelligence that can be gained through better targeting and segmenting.

In support of this webinar, Neolane has packaged together several resources to support marketers’ efforts to make the business case for automation including a whitepaper, “Making the Case for Enterprise Marketing Software,” with relevant statistics along with a link in the paper to a PowerPoint template to help marketers’ structure their presentation. You can also listen to the archived webinar at your convenience.

While we can’t crack the chicken-and-egg challenge (can we just call it a tie?) we’d love to hear other marketers” success stories along with your take – which comes first, ROI or the tools to measure it?

Republished with author's permission from original post.

Kristin Hambelton
Kristin Hambelton is responsible for all marketing efforts for Neolane including corporate communications, branding, product marketing, demand generation, partner marketing, and operations.

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