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Measuring the ROI of Marketing Automation

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by: Ellen Valentine (@EllenValentine)
13 February 2013

Marketers everywhere are realizing how necessary marketing automation technologies are for their marketing efforts. According to SiriusDecisions, the adoption of marketing automation technology is expected to increase by 50 percent by 2015. While marketers are realizing they need to adopt the technology, there is still some fogginess on the best way to measure its ROI.

Marketing automation is a big investment for businesses, but the positive impact organizations see to their bottom lines is significant. Below, I outline three of the many ways marketing departments can measure the ROI of automation. While there are always other areas to analyze, these are good places to begin.

Lead Scoring. Automation takes the guess work out of passing qualified leads to sales. According to Mac McIntosh of AcquireB2B, sales teams now accept and processes more than 58 percent of marketing qualified leads. Because these leads are of a higher quality, they can yield an increased close rate of more than 23 percent. McIntosh highlights that an “organization can expect to close roughly five deals per program based on a 50,000-name database. That’s a revenue increase of about $400,000.”

A 2011 MarketingSherpa study indicated that companies using lead scoring see an ROI of 138 percent, while those not using it see around 78 percent return. The more accurate marketers make their scoring models, the better results they will see. Incorporating customer and prospect behaviors will improve the accuracy, resulting in a higher quality of leads going to sales. When behavioral “facts” are embedded in scoring models, in addition to demographics and firmagraphics, sales will be more confident about the leads they’re receiving from marketing – resulting in more closed deals.

Nurture Programs. Nurture programs, which enable marketers to educate prospects who aren’t yet ready to engage in a sales cycle and gently guide them to a purchase decision, can have 2x the open rates and 3x the click-through rates of one-off emails.

With automation, marketers can set up nurture programs that gradually collect behavioral data, building a relationship and responding to contacts’ actions. This insight into prospect behavior gives sales teams the ability to have more effective conversations with prospects, increasing sales and marketing alignment. Sales personnel also have the ability to drop contacts into a nurture program if they are not quite ready to make a purchasing decision. Silverpop research found that there can be up to a 47 percent higher order value on closed sales that were nurtured versus sales that were not.

Marketing and Sales Alignment. While there is much more to marketing automation than just alignment between marketing and sales, it’s still a critical aspect of measuring its ROI. Alignment between these two departments is constantly evolving, so setting periodic goals and benchmarks for your company’s business needs is the most practical way to measure this area. It’s no secret that sales is more effective when they receive qualified leads – and a happy and successful sales team makes for a profitable business.

Regardless of where you are in the implementation cycle of marketing automation, it’s important to remember that amazing results will be gradual. According to a Focus Research Study, 75 percent of companies using marketing automation will see ROI within the first year of implementation, with 44 percent seeing results within the first six months. Being patient and realistic about your business needs will lead to the best results for your company.

Related Resources:
1)  Tip Sheet: 10 Ways to Make the Case for Marketing Automation
2) Blog post: 3 Ways Behavioral Marketing Improves Sales and Marketing Alignment
3) Blog post: Building the Best Marketing Budget for Today's B2B Environment

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