What is marketing automation? Marketing automation is the use of software to deliver personalized messages to customers and leads. With marketing automation, the goal is to give people something of value when they need it most so that they’re more likely to convert. By understanding the needs and interests of people at each stage of the conversion funnel, you’re better able to keep them engaged by providing them with the type of content they’re most interested in. On the other hand, things like whitepapers and e-books are best for attracting people who want more in-depth information on a subject and are more inclined to be interested in what a business is offering, which is why those types of content are usually gated. First of all, high-quality lists of contacts aren’t for sale. People just want to know what’s in it for them. It’s just email marketing Email is a significant part of marketing automation, but marketing automation isn’t just a new name for email marketing. Marketing automation messages are much more fine-tuned to a user’s interests and needs. For some types of businesses, basic email marketing is all they really need.
To say marketing automation is a complex subject is putting it mildly. On the surface it seems simple enough, but once you get just a little bit deeper into it, it’s overwhelming. Even if you work with marketing automation on a daily basis, it can be hard to describe.
When used correctly, marketing automation can be useful in helping sales and marketing teams do their jobs more effectively so they can reach their goals. But there are also a lot of misunderstandings about what marketing automation is and isn’t. Let’s try to get a better understanding of what marketing automation is and how it can potentially help a business.
What is marketing automation?
Marketing automation is the use of software to deliver personalized messages to customers and leads. The software allows you to create a dynamic series of messages to send to your contacts. The message a person receives is decided by factors you specify, like what their spending habits are, where they are in the buying process, and past interactions they’ve had with your site.
Delivering content that’s tailored to a person’s needs and interests helps build stronger relationships which, in turn, can help increase conversions and revenue. Marketing automation can help you accomplish all these things while streamlining your operations at the same time.
In the broad scope of things, marketing automation incorporates several different aspects of marketing and business development, including email marketing, content development, conversion rate optimization, and lead generation.
The benefits of using marketing automation
By far, one of the biggest benefits of marketing automation is that it helps sales and marketing teams work more efficiently. People love personalized content; sending out personalized emails generates six times more revenue than sending non-personalized emails. But manually sending out customized messages to contacts simply isn’t practical. Marketing automation platforms handle the mundane and repetitive work that goes into delivering personalized content, giving sales and marketing professionals more time to focus on things that are more interesting and challenging.
Not only does marketing automation make it easier to deliver messages, it makes it easier to figure out where people are in the conversion process. Marketing automation programs typically have a lead scoring feature which helps users quickly identify which leads are the most sales-ready.
One of the most common reasons why businesses consider using marketing automation in the first place is because they want to improve their conversion rates and revenues. Marketing automation is a way to encourage customers to stay engaged longer, making it more likely they’ll stick around long enough to convert. On average, companies that use marketing automation have 53% higher conversion rates and an annual revenue growth rate 3.1% higher compared to companies that don’t.
For products and services with longer conversion cycles, marketing automation can also help speed up the process. In one example cited by VentureHarbour, Thomson Reuters was able to reduce their conversion time by 72% by using marketing automation software.
What applications are there for marketing automation?
While marketing automation has several different applications, email messaging and lead generation/nurturing are among the most common.
Yes, email is still relevant as a marketing tool. While it’s easy to say things like “Everybody’s on Facebook/Twitter/Instagram,” it’s simply not true. However, most Internet users do have at least one email address. Email inboxes also tend to move at a slower pace than social media feeds, giving you the best chance at making a direct connection with your contacts. There’s a multitude of ways marketing automation can be used with email:
- Welcome messages
- Product retargeting
- Abandoned cart reminders
- Personalized product recommendations
And that’s just to name a few.
Many companies use marketing automation to solicit feedback from their contacts, regardless if they’ve converted or not. Whether it’s by sending out surveys or asking people to send comments directly to them, the information they garner can be extremely valuable in guiding changes that will help improve their revenues in the long run.
Given that personalized emails generate so much more revenue than non-personalized emails, marketing automation can be an effective way to nurture your leads. According to Marketo, about 50% of leads in any system are not ready to buy and nearly 80% of all new leads will never become sales. With marketing automation, the goal is to give people something of value when they need it most so that they’re more likely to convert. Effective lead nurturing generates 50% more sales-ready leads at a 33% lower cost. Nurtured leads also tend to make larger purchases than non-nurtured leads.
Marketing automation platforms are also often commonly used to manage social media campaigns, create landing pages, and conduct ongoing A/B testing.
B2B vs. B2C marketing automation
Businesses of all sizes can potentially benefit from marketing automation, but whether a business has a B2B or B2C model is going to have an impact on the type of messaging used in their campaigns. While both types of businesses would have the main goals of improving conversions and revenue, there are differences in how they’ll reach that goal.
B2B sales tend to have longer conversion cycles than B2C sales and often involve products or services that require a more long-term commitment. (Of course, there are some exceptions.) Because of this, B2B messaging has a greater emphasis on long-form content like whitepapers, case studies, and e-books. When major purchases are being considered for a business, multiple people are often involved in the decision-making process, so it’s not always a matter of winning over one person like it is with B2C sales. It’s important for the business with something to sell to establish themselves as an authority in their industry — offering in-depth informational content is a great way to do that.
Since B2C sales move at a faster pace, the content used in their messaging is typically much simpler. For example, Sephora customers aren’t going to be interested in long case studies about a product, but they might appreciate a 30-second video demonstrating how to use a product instead. For B2C companies, the focus tends to be more on brand building and giving customers reasons to come back, so their messaging typically includes things like abandoned shopping cart reminders, personalized product recommendations, and offers tailored to specific types of customers.
Although many different aspects of marketing and business development come together in marketing automation, the whole process is ultimately driven by a few core concepts.
A conversion funnel is the process a person takes toward becoming a customer. Now that it’s so easy to find product reviews and shop around, a lot of people don’t just buy things from the first place they see it for sale. Marketing automation is a way to keep people engaged so they’re more likely to convert.
The conversion funnel can be broken down into a few basic stages:
- Awareness: The customer initially becomes aware of a company, product, or service. It’s too soon for a person to want to make any decisions, but a business has made its way onto their radar.
- Interest: Not everyone who is aware of a business/product/service is going to have a need for it. At this point, those who are interested will start becoming more engaged by doing things like requesting a quote, signing up for a free trial, following a business on social media, looking for reviews, or reading blog posts and other content on a company’s site.
- Consideration: By now, a person is familiar enough with a business to know they like what’s being offered. They’re not quite ready to make a decision, but a business is in the running.
- Action: This is the point where a person decides to convert. You’ve won them over and they’re ready to do business with you.
Ideally, after a person converts once, they’ll be so happy with their decision that they become a repeat customer. But as people move through the conversion funnel, whether they do it once or several times, some of them will always drop out at each level. On average, only 1–5 % of people who enter a conversion funnel actually convert. When people drop out, it’s known as churn, and while some churn is inevitable, marketing automation can help reduce it. By understanding the needs and interests of people at each stage of the conversion funnel, you’re better able to keep them engaged by providing them with the type of content they’re most interested in.
For example, let’s say a company installs vinyl windows and they advertise heavily in the local media. At any given time, a large percentage of the thousands of people who see their ads won’t take any action after seeing one because they either don’t need new windows or because they live in a rental property. No amount of additional messaging will win those people over. But since replacing windows can be very expensive, the people who actually do need them typically spend time doing research to make sure they choose the right type of window and get the best price. If this company were to send additional information about vinyl windows to the people who contact them to get an estimate, they may be able to convince more people to convert.
Feedback loops and metrics
One of the basic laws of physics is that for every action, there’s an equal and opposite reaction. A very similar concept also applies in the world of marketing automation, and it’s known as a feedback loop. When you send a message to a person, the recipient will have some kind of reaction to it, even if that reaction is to do nothing at all. That reaction is part of your feedback loop and you’ll need to pay attention to your metrics to get an idea…