CRM BUYER SPECIAL REPORT

Charting a Course Toward Marketing Automation

Just as sophisticated navigation tools help aviators choose the right route through the skies, marketing-automation technology is a crucial component of CRM that enables users to analyze data and map out cost-efficient business strategies.

In fact, analysts expect marketing automation to emerge as the next major area of CRM spending as both the market and the technology evolve.

Even in turbulent business conditions, economic arguments can be made for marketing automation because it is fairly easy to demonstrate return on investment (ROI) through reduction of marketing costs or cost per campaign, according to Liz Roche, Meta Group vice president of technology research services.

“Marketing departments have discretionary income available that IT departments do not have,” she told CRM Buyer. “Plus, [this technology deals with] a big pain point — you’re taking something that’s really ad hoc and automating it.”

Analytical Angle

Indeed, Roche emphasized, analytics is the foundation of enterprise marketing management, essential for consolidating information on customer demographics, psychographics, transactions and interactions and for providing a panoramic view of customers.

Marketing automation’s analytical aspects are both attractive and overdue, as financial accountability and marketing performance have become more significant issues for corporations, said Louis Columbus, a senior analyst at AMR Research.

“The industry is just starting to embrace it now because of the need to fulfill cost-reduction quotas or to generate a greater number of leads,” he told CRM Buyer.

Keeping Track

Planning and management — particularly for large organizations across multiple regions with many outside contractors and concurrent marketing programs — also are becoming a larger part of marketing automation, according to a report from Giga/Forrester Research.

“The need to track costs and manage the process of campaign planning, design and implementation is important to all marketing organizations,” wrote Elana Anderson, senior analyst at Giga/Forrester and author of the report. “However, the larger and more distributed the organization, the bigger the marketing budget; and the greater the need to use technology to manage the environment.”

Another new wrinkle is collaboration between corporate marketing and branch or field marketing and sales managers. For example, Chordiant’s new enterprise marketing suite enables regional managers, such as personal financial advisors, insurance agents and customer-service managers, to participate in centrally managed campaigns.

Talk About Evolution

The marketing-automation business has changed in the last 18 months as acquisitions, shutdowns and general consolidation have allowed CRM suite vendors to buy some smaller companies and broaden their marketing-automation reach, according to the Giga/Forrester report.

A handful of best-of-breed specialists, such as SAS, Teradata and Unica, are still major forces in serving high-volume B2C verticals that often require integrated data mining and modeling, complex customer segmentation schemes and multichannel campaign execution, the report said. However, CRM suite vendors E.piphany and Chordiant also have a track record in high-end B2C verticals, and Siebel is making a play for this space, too.

In the end, there is no one-size-fits-all solution, report author Anderson told CRM Buyer. Each enterprise must choose the product that best fits its particular needs.

“In order to get the right fit and ensure ROI, companies must clearly define what they want to achieve via their investment in marketing-automation technology,” the report said. “While the right answer for some may be to wait for their CRM vendor of choice to catch up, others stand to gain substantial revenue benefit from implementing marketing technology sooner rather than later — even within a market that will continue its fairly rapid rate of change at least through the next two years.”

Fit To Be Tried

The Giga/Forrester report makes the following recommendations to users:

  • Examine the risks and benefits and aim to achieve ROI in 12 to 18 months, but break down the road map into reasonable pieces.
  • Set up a hands-on product-review process that puts the “business users in the driver’s seat” and the IT personnel “under the hood.”
  • Understand implementation costs. Include costs associated with a customer data mart or data warehouse, which is a necessary foundation for a database marketing initiative.
  • Be ready to deal with data-quality issues, such as duplicate customer lists.

    Although marketing automation is an underserved and emerging segment of the CRM market, it is only one part of the whole. Companies considering this technology would do well to remember that it will need to be integrated with other pieces of CRM — primarily sales and customer service — and that this process will take time.

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