Marketing Automation: 3 Ways to Measure ROI
Marketers everywhere are finally realizing just how necessary marketing automation technologies are for their campaigns. In fact, SiriusDecisions notes that marketing automation adoption is expected to increase 50 percent by 2015. Clearly, this isn't just a buzzword (it never was). Rather, it's a valuable tool for optimizing your sales cycle. And while marketers are certainly recognizing the value provided, as is the case with anything new, they're still seeking clarity on how to best measure its return on investment.
Below I outline three of the many ways marketing departments can measure ROI for their marketing automation programs. While there are always other areas to analyze and achieve business value, 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 process 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 found that companies using lead scoring see a 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'll see. Incorporating customer and prospect behaviors via marketing automation improves 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, ultimately resulting in more closed deals.
Nurture programs: These programs enable marketers to strategically educate prospects who aren't yet ready to engage in a sales cycle. Gently guiding them to a purchase decision can produce two times the open rates and three times the clickthrough 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're not quite ready to make a purchasing decision. Our own 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's 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 best-in-class results will be gradual. According to a Focus Research study, 80 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.