B2B businesses spend a bunch of money on tech tools to ensure success–but how effective are they? My friend Mac Mcintosh of AcquireB2B has published a report based on a recent study by Sirius Decisions that discusses how implementation of a Marketing Automation Platform (MAP) is likely to fail in the absence of a structured process and relevant skills. We have conversations with clients all the time who are rushing to implement marketing automation, but all too often, we find that they have neither a clear idea of the processes needed to implement the platform of choice and, in all too many instances, their existing staff doesn’t possess the necessary expertise to actually utilize the MAP. And that? Spells disaster. Expensive disaster and much frustration.
This study reveals that investing in a marketing automation platform alone has little to no significant impact on revenue if companies don’t have the right processes in place. The whole point of marketing automation is to increase qualified leads, close more deals and generate more revenue. In order to do that, you’ve got to have technology fortified with systemic processes. When you do, that’ll absolutely lead to a consistent conversion rate across the entire length of the sales cycle. Let’s talk about the study.
For the purpose of the study, B2B companies were split into three distinct segments.
- No MAP with no process
- MAP with no/weak process
- MAP with average process
Demand creation. Low, average or more?
Since most of the MAP purchases happen over a compelling need to build a more systematic demand creation, it’s interesting to note how each segment fares in this department. Due to the absence of shared processes between sales and marketing, the “No MAP, no process” category shows no real demand. The hand raisers from the outbound method are readily pulled in, leading to a mixed response rate of about 2%. Not surprisingly, the absence of a valid checkpoint ensures that this category has the most number of underqualified leads.
The “MAP with no/weak process” category displayed an approximate response rate of 3 %, typically attributed to their MAP usage, albeit without definite processes while the “MAP with average process” category witnesses a response rate of roughly 4%. While this certainly shows the effectiveness of the third category, the second one doesn’t look too bad though, isn’t it?
Well, wait till you skim through the next pointer in line and you’ll see how the efforts of the second category are highly counterintuitive.
What do the conversion rates say?
In case of the first category, conversion from response to lead can be as high as 85%, however, the rates start dropping significantly through the middle and the bottom of the sales cycle and at the end, only 5% get qualified as real leads. This leads to what might be termed as “sales fatigue,” which is when your sales reps give up on the marketing team and turn to cold-calling themselves.
When it comes to the second category, the conversion rates start plummeting as the leads trickle down to the middle of the sales cycle. For the third category, the results are less volatile and more stable. This is where you can see the real difference between using a technology platform alone and using one with a proper system around it.
What’s the final outcome?
Let’s do the math. Assuming an initial database of 50, 000, the first, second, and third categories are found to close an estimated 1, 1.2 and 5 deals respectively. While this pretty much puts together the pieces, the study also delineates the fact that businesses need to ensure the alignment of their marketing and sales team to march towards a unified goal of generating more qualified leads, ensuring better conversion rates, and driving bigger returns on investments.
What you find here is just a prelude to the extensive report packed with more interesting data and facts. You can download the full report here.
As a final note, Mac is a marketing automation genius with an extraordinary expertise in B2B marketing and lead generation. Besides, he is a dear friend and frequent collaborator to our blog, if you don’t know him, you should.
Additional Resources on this Topic:
What is Marketing Automation?
Marketing Automation: Why You Need to Be Doing It
photo credit: LendingMemo via photopin cc
This post was brought to you by IBM for Midsize Business and opinions are my own. To read more on this topic, visit IBM’s Midsize Insider. Dedicated to providing businesses with expertise, solutions and tools that are specific to small and midsized companies, the Midsize Business program provides businesses with the materials and knowledge they need to become engines of a smarter planet.
