Three Ways to Dominate the Marketing Automation Industry


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I wrote last August that it’s still possible for new B2B marketing automation vendors to challenge the industry leaders. This was based on the observation that several of the smaller vendors have quickly reached the 1,000 client benchmark. But it didn’t answer the more interesting question of what it would take for a new vendor to really bypass the current leaders.

That particular question came up repeatedly during Dreamforce last week. The answer may not matter to marketers who don’t themselves work for a marketing automation vendor. But I think it’s worth pondering anyway, if only as an interesting case study in business strategy.

My own answer is: at stage of the industry, the basic features of marketing automation are pretty much set, so radically different features are not likely to emerge as a major competitive advantage. (That’s not to say new features won’t be important, particularly extensions into areas like social and mobile. But new features won’t be enough because they can be copied too quickly if they’re really popular.) Rather, a new industry leader would have to remove the critical bottleneck to industry growth: the shortage of marketers with the skills needed to fully use marketing automation capabilities.

I don’t think I need to spend too much time defending that particular premise: if you want a data point, how about the widely quoted Sirius Decisions figure that 85% of marketers do not believe they are using their marketing automation platform to the fullest. Let’s move onto the more important question: how could a vendor change the situation?

It seems to me there are three ways to approach this:

– make the systems radically easier to use. This is by far my preferred solution. It may seem an unobtainable goal: after all, ease of use has been a top priority of marketing automation vendors for years, and you’d think that by now all those smart people would have made things about as easy as they can be. But I think the right basis of comparison is Google AdWords, which made entry-level search engine marketing so incredibly simple that pretty much anyone can do it with no training at all.

As with AdWords, a radically simpler marketing automation system would just ask users to make a handful of basic decisions about content and target audience, and would build everything else automatically. Again like AdWords, the system would automatically optimize the programs based on results. This implies a degree of automation well beyond today’s marketing automation products, although increasingly common features like dynamic content and integrated predictive modeling offer a hint at how it could happen.

You could argue that marketers don’t want to delegate so much responsibility to a system, but many seem to have delegated to AdWords quite happily. Of course, AdWords also lets more sophisticated marketers make more decisions for themselves, and I’d expect any marketing automation system to provide that option as well. And, again as with search engine marketing, I’d expect the most sophisticated marketers to adopt more specialized systems than AdWords itself—but those will marketers will remain a minority.

– make it radically easier for marketers to use existing functions. This is not about making the functions themselves simpler: per my earlier comment, I’ll accept that all those smart folks have done about as much as possible in that direction. But I think more can be done to help marketers learn to use those functions more quickly and with less work.

What I have in mind specifically is “just in time” approaches that make it very easy for marketers to learn how to do a new task once they’ve started it, rather than taking separate training classes or looking up detailed instructions. This means context-sensitive help functions that can guess what you’re trying to do and offer advice when you seem to be having trouble. It also means lots of little instructional snippets instead of monolithic tutorials that have to be consumed all at once. This is standard stuff in the software industry, although some companies do it much better than others.

I think a marketing automation vendor who really focused on this would have a major advantage among new users, who are exactly the key audience. If you want a specific benchmark for this approach, it’s that people can perform tasks with zero advance training.

– provide services so marketers don’t need to use the systems themselves. Quite a number of vendors have taken the services-based approach. In a way, it’s an admission of defeat: no, we really can’t make the systems simple enough for mere mortals. But I’d be happy to trade pride for success.

The trick to this approach is to keep the service cost low enough that you can actually make money. That comes down to things like prepackaged templates for creative materials and campaign flows, highly automated processes so the service staff can work efficiently, and standardized methodologies so inexperienced (ok, that’s a euphemism for low cost) individuals can be easily trained to provide adequate service. Again, these are pretty standard things but I don’t think any vendor has really designed their system and business model around them.

Note that a system designed for efficient use by highly trained service people would look quite different from one designed for easy use and learning by lightly trained end-users. So this approach would really imply fundamental change in how vendors build their products.

As I said earlier, my preferred option is the first one, making systems radically simpler. But I’m guessing the more practical one is the middle choice of providing more effective help using systems similar to today’s. It’s possible that middle option isn’t viable: maybe vendors can’t provide enough additional help to make a difference. But I don’t think I’ve seen any vendor really focus on that option – and won’t concede I’m wrong until I have.

Republished with author's permission from original post.


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