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10 Strategic Pitfalls of Marketing Automation To Avoid

Avoiding Strategic Pitfalls of Marketing Automation image

Avoiding Strategic Pitfalls of Marketing Automation

Lack of Strategic Sales and Marketing Alignment is preventing most companies from enjoying double digit Revenue + Profit growth.

Marketing Automation has the power to either accelerate, or dramatically impede, our strategic alignment imperative.

The CEO, VP Marketing and VP Sales tend to simply delegate the strategic success of Marketing Automation to a tactical implementation team.

That’s proving to be a huge mistake, strategically and financially, for these companies.

When Marketing Automation Seems Too Good to be True, It Probably Is

Numerous independent research studies conclude that better aligned companies grow Revenue + Profit faster than their less-aligned peers. They grew revenue 25% faster according to a recent Forrester Research study and grew profits 27% faster according to Sirius Decisions.

There’s also overwhelming reports and claims from the 200+ Marketing Automation vendors, their partners, consultants and others claiming better alignment, amazing ROI and increased sales growth from Marketing Automation. Some achieve this, most do not. The truth is in the details:

  • Marketing can easily demonstrate that the increased number of leads from Marketing Automation did ultimately turn into some new sales business. However, if only 1 out of 10 of those leads ultimately turns into revenue, the Sales force ends up chasing 9 out of 10 leads that had no chance of closing.
  • Marketing can easily demonstrate a fast Marketing ROI (aka Return On Marketing Investment) on the Marketing Automation procurement, but that is not the same as demonstrating real ROI (as the rest of the C-suite understands the term).
  • When software automatically generate leads, the cost per lead will be lower. When the sales force wastes a lot of time chasing poor leads, rather than closing good opportunities, the Company’s cost of sale will be higher.
  • The result is that revenue produced is lower than the company expected + reduced Sales effectiveness results in a lower profit margin than the company anticipated. That’s not revenue + profit growth or strategic alignment.

Marketing Automation can either Accelerate or Prevent Sales + Marketing Alignment

Lack of strategic participation by company executives in Marketing Automation deployment is the root cause of Marketing Automation not achieving the expected double digit Revenue + Profit growth. Marketing Technology has the power to deliver that level of financial performance; Success really comes down to what strategic process the company is automating.

  • Marketing Automation can prevent Strategic Sales + Marketing Alignment by literally codifying and hard-wiring the very cross-functional processes that currently prevent Alignment and Collaboration across our company’s revenue generation functions, groups and departments. Automation either re-enforces bad behaviors or encourages good behaviors, depending on the strategic direction that we set, OR
  • Marketing Automation can accelerate  Strategic Alignment + Empowered Collaboration between Sales and Marketing groups.   It can automate virtually any cross-functional Lead-to-Revenue business process. If that business process is a solid, proven process, Marketing Automation can take the company to a new level of financial performance. If the Lead-to-revenue process is outdated, poorly designed or broken, automation will simply amplify the dysfunctional behavior that we were hoping to remedy.

Where Can the Executives Add Strategic Value to a Marketing Automation Deployment?

We don’t want to micro-manage the implementation, but by simply delegating corporate revenue strategy to a tactical functional team, which has no authority to evaluate or change strategy, the team will simply do their best to implement the system on time and on budget:

  • Codify and hard-wire the system to support the company’s existing processes, even if these strategic processes are outdated, broken and contribute to a lack of strategic alignment within the organization. Changing systems is always much easier than changing employee behavior across the company
  • Select Marketing Automation features/function that address current and past requirements, even if those feature/functions do not ultimately meet the strategic needs of the company next year and beyond. If our company doesn’t currently leverage Social Selling or Mobile technologies this year, for example, it will be much more difficult to do so next year if the purchased automation system doesn’t provide those capabilities.

Here are 10 common strategic pitfalls of Marketing Automation that your company can avoid through active strategic support of the implementation team, as suggested below. They are presented in order actions that will increasingly support Strategic Alignment + Empowered Collaboration, and, accelerated Revenue + Profit Growth.

Strategic Pitfall #10/ Inadequate Resource Allocation for Marketing Automation Deployment

  • Sufficient tactical resources have not been allocated to create the fuel which keeps the shiny new Marketing Automation engine running. For example, additional Marketing resources are needed to create significantly more buyer-oriented content. Additional Marketing Technology, like lead scoring, needs to be purchased, integrated and fueled to enhance desired outcomes. Sufficient training with ongoing re-enforcement for all employees who are expected to interact with the system or its outputs is required.
  • Sufficient strategic resources have not been assigned to identify obstacles/ opportunities/ solutions for implementing the company’s revenue strategy. For example, the right Marketing Automation features and functions need to be procured to support the sales and marketing strategy for the next couple of years, not just for the past couple of years. Strategic best practices and process improvements need to be incorporated to prevent the deployment from becoming a huge experiment with the entire sales force as its guinea pigs.
  • Strategic Action: Involve the right Strategic Marketing + Sales resources throughout the entire project preparation and implementation to ensure rapid strategic success of the project, prevent post acquisition surprises and support the deployment team.

Strategic Pitfall #9/ Wrong Marketing Automation Success Criteria

  • Marketing ROI and Lead Quantity is NOT the right success criteria: It focuses the Marketing groups on creating more leads per Marketing dollar spent. More Leads means more Revenue, right? No, not necessarily! A high volume of those leads are currently low quality leads which actually just waste a large chunk of Sales selling time, reduce Sales Effectiveness and increase the company’s overall cost of sale, without achieving significant revenue growth or profit. Such a win/lose scenario simply increases the gap between Sales and Marketing, preventing improved Alignment and effective Collaboration.
  • A better success criteria, for example, is to measure the percentage of Marketing-generated leads that actually become part of the Sales deal Pipeline, that actually become part of the Sales Forecast, and, that actually result in a more sales Won. When 40%+ of the actual new business revenue comes from Marketing-generated leads (versus Sales-generated leads), without decreasing Sales Effectiveness in the process, demonstrate real ROI, better Sales + Marketing Alignment and improved Sales + Marketing Collaboration. Sales will actually want to help Marketing increase that contribution %. A Win/win situation.
  • Strategic Action: Thoughtfully measure + motivate the right Marketing + Sales behaviors that will lead to the right Revenue + Profit outcomes. Measure revenue generated and ROI that Marketing actually contributes to the company.

Strategic Pitfall #8/ Automating Existing Outdated or Broken Processes

  • If Sales complained of poor quality leads from Marketing before applying Automation, then automating that broken process will just produce 100X more poor quality leads for the Sales force! On the other side, Marketing might benefit from better Sales feedback in order to improve lead quality, but expecting Sales individuals to risk quota attainment and their future employment, to knowingly chase a lot of poor quality leads, is unlikely to get many volunteers. It’s a win/lose situation that simply widens the gap between Sales and Marketing.
  • A better starting approach is to give Sales the type of leads that they actually need, and that they can recognize as a good lead, based upon their face-to-face customer experience. A sales rep knows what a good lead looks like when it is Sales-generated. Marketing could not deliver that level of quality in the 20th century, but with the new self-educating buyers online, and the myriad MarTech tools and progressive profiling Marketing techniques, there is absolutely no reason why Marketing can’t do a much better job in the 21st century! It could start to totally turn around the inherent Sales/ Marketing “we/they” attitude!
  • Strategic Action: Marketing must support the entire lead-to-revenue process by actively helping Sales maximize Revenue + Profit throughout the customer’s entire life cycle. In this quickly evolving customer-empowered marketplace, we must fully leverage Marketing’s deep digital marketing and analytic skills with their myriad Marketing technologies.

Strategic Pitfall #7/ Creating Unproven Lead Management Processes

  • Marketing is not actually helping Sales if their the definition of a Qualified Lead and Sales-Ready Lead for Marketing Automation is unnecessarily different than those used by field Sales Reps and their Sales Managers every day. This definition difference just increases the gap between Sales and Marketing:
    • The Sales Force has always had a methodology to determine if a particular lead is qualified enough to warrant a Sales rep’s focus or not, today. There is no such thing as a lead being qualified or unqualified in Sales; it’s simply less qualified or more qualified than other leads that Sales could work on, today.
    • Being Sales-ready is, and will continue to be, a moving target within Sales every day: A lead worth chasing in Q1 may not be worth chasing in Q4; a lead worth chasing for a newbie may not be worth chasing for a seasoned Sales professional; a lead worth chasing for a Sales rep that is currently below quota may not be worth chasing when the Sales rep is above quota.
    • In contrast, Marketing Automation deployments often try to come up with a black and white definitions of a Qualified Lead and a Sales-Ready lead. There’s also an attempt to come up with a black and white timeframe when Sales resource must engage with a lead, such as when someone digitally downloads a report, for example. When an anonymous individual looks at a webpage and/or downloads a file it may mean it’s a good lead according to Marketing, but not according to the Sales rep. This win/lose approach just widens the gap between Sales and Marketing.
    • There’s a lot of pressure to deliver “Marketing Automation ROI via more Leads” to justify the deployment. A huge multi-Billion dollar industry has emerged to help the Marketing department justify the Marketing Automation acquisition as soon as possible. The industry even created, and aggressively promote, their own “lead alignment” vocabulary: Automated-qualified lead (AQL), Marketing-qualified lead (MQL), Sales qualified lead (SQL), etc. etc. etc. Creating unnecessarily different methodologies, approaches and terminology between Marketing and Sales simply increases the gap between the Sales organization and the Marketing organization.
  • Marketing Automation methodology must use the same methodology that Sales uses for its own Sales-generated leads. No acronym dictionary is required to understand when a lead is 10% fully qualified, 50% fully qualified, or 100% fully qualified. With the availability of Marketing Automation features such as nurturing and progressive profiling, Marketing finally has the power to deliver higher quality leads that Sales can recognize, understand and want to engage.
  • Strategic Action: Marketing must actually help Sales generate more revenues by supporting, not re-defining, Sales methodology, Sales process and Sales terminology.

Strategic Pitfall #6/ Deploying Lead Scoring Technology To Solve Qualified Lead Dilemma

  • Lead Scoring, even Predictive Lead Scoring, is NOT a replacement for basic person-to-person Sales qualification. Having auto-magical black boxes spitting out high-score leads won’t develop trust between Marketing and Sales, particularly in the early stages. I know very few people in Sales who would solely entrust their livelihood to a black box.
  • Marketing must build upon existing Sales success, not start from scratch. Lead Scoring is the icing on the cake, and the cake is a proven lead that Sales recognizes and trusts.
    • The cake: Marketing needs to give Sales the leads they need AND RECOGNIZE.
    • The icing: By using analytics, real customer data, and actual outcome data with lead scoring technology, Marketing can provide enhanced insight to Sales for every lead.
  • Strategic Action: Ensure Marketing is actually helping Sales generate more sales by supporting and enhancing Sales methodology, Sales process and Sales terminology.

Strategic Pitfall #5/ Creating Content Without A Documented Content Strategy

  • Without a documented Content Strategy, there is no effective strategy for Marketing OR Sales to turn strangers into customers. It’s a huge lose/lose situation for the company. How do we provide buyer-oriented content that engages and educates the buyer throughout their process without a content strategy? How do we know they actually read it or valued our insights? How does Sales find and use content to address buyer concerns throughout the buyer’s purchasing process? How do we coordinate the content of several isolated Marketing specialists, agencies and consultants without a content strategy? It’s simple: We can’t! All we can do is try to engage them one to three times, then send the lead to Sales. As pointed out above, that’s not working well for Sales.
  • Strategic Action: Involve the right Strategic Marketing + Sales resources throughout the project preparation and implementation to help define a Content strategy that delivers buyer-oriented content for Marketing Automation, and can be effectively reused by Sales + Marketing, throughout the buyer purchasing process. Sales will actually want to collaborate with Marketing to identify topics that resonates with their customers!

Strategic Pitfall #4/ Being Unable to Clearly Define Our Target Market Buyers

  • Marketers can create a digital representation of the buyer team, buyer personas, and simplified buyer process, but it’s not real. This is another huge lose/lose situation for the company. If we don’t understand the real buyer process, if we don’t understand who is really a member of the buyer team, if we don’t understand their real role, and if we don’t understand what they really need before they will consider trusting us with their business, how can we create a quality lead for Sales? How can we develop buyer-focused content that addressed their personal business concerns? How do we create content for Sales that will help them in their selling process? We can’t. All we’ve done is increased the gap between Sales, Marketing and our Buyer.
  • Marketing and Sales must collaborate to create one perspective of the Buyer that represents the Buyer’s behavior both online and in-person, allowing Sales + Marketing to better align.
  • Strategic Action: Cooperation is not Collaboration. Handshakes and politeness are not Alignment. Involve the right Strategic Marketing + Sales resources to effectively help the Sales organization and Marketing organization effectively collaborate and accelerate their alignment.

Strategic Pitfall #3/ Limiting Marketing Automation to Only Inbound Marketing Leads

  • While Marketing Automation can be very good at attracting, tracking, and developing leads from the internet, it is excellent at nurturing these leads – moving them from one stage of the buyer decision process to the next stage, automatically, without involving skilled sales resources.
  • Marketing must fully leverage Marketing Automation nurturing capabilities to improve all Marketing + Sales lead generation throughout the company including existing telemarketing, telesales, field sales, and inside sales groups.
  • Strategic Action: With effective application of Marketing Automation, all Lead Generation efforts within the company could be improved to increase sales while reducing the company’s cost of sale, thereby increasing overall Revenue + Profit

Strategic Pitfall #2/ Limiting Marketing Automation to Only Leads

  • While Marketing Automation technology can be effective optimizing all lead generation efforts, it can also improve customer retention, customer add-on sales, customer repeat purchases, customer referrals, customer reviews, etc. Marketing Automation already has the nurturing technology and access to Sales CRM data to effectively automate Sales + Marketing activities that have become too labor intensive for Sales to continue cost-effectively.
  • Strategic Action: Strategically Leverage Sales + Marketing Automation Technology throughout the entire company revenue generation process. This represents an area where both Sales + Marketing can fully align and collaborate to deliver Revenue + Profit + improved Customer Experience.

Strategic Pitfall #1/ Treating Strategic Revenue + Profit Opportunities as a Tactical Project

  • Automation is not about technology, it’s about business process. Automation has  been at the forefront of improving Revenue + Profit on the manufacturing floor, on the “financial securities” “virtual floors”, in Telecommunications, and elsewhere. It has increased workforce productivity and output.
  • Marketing Automation + Sales Automation has the power to increase Revenue + Profit for every company that relies on sales and marketing, today. Sales + Marketing Automation will become a pre-requisite for any company, just like assembly lines, robotic tools, and trading systems are already pre-requisites for other industries and functions.
  • Strategic Action: To leverage Sales + Marketing Automation and accelerate Revenue + Profit, we must be willing to make some adjustments to our existing cross-functional business processes. The power of automation is limited only by our willingness to evolve our business processes. Those that do so thoughtfully will be rewarded with accelerated Revenue + Profit growth. Those with a wait and see perspective, can only watch with envy.

Your Next Step?

For more information about Strategic Alignment + Empowered Collaboration, read Improve Sales Marketing Alignment to Accelerate Revenue Profit Growth

To participate in the discussion, join David Hubbard on Twitter or LinkedIn.

If you want to achieve accelerated Revenue + Profit growth, through Sales + Marketing Strategic Alignment, Effective Automation and Empowered Collaboration, you need to talk to Marketing OutfieldRequest a Complementary Audit Consultation. No obligation, no hard sell.

 

About David Hubbard

David Hubbard is a Revenue Growth Expert, a pragmatic Marketing and Sales Consultant, a proven business leader and the CEO of Marketing Outfield. He has helped both private and public companies grow by 25-50% per year by properly enhancing their revenue strategy, sales and marketing activities, and incentive compensation plans to better align the company with their target market buyers. With a unique professional track record within the Sales, Marketing and Product Management functions, he brings a frank and unbiased perspective to his clients. Request a Complimentary Audit Consultation from Dave and his team and follow him on LinkedIn.