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Mike points out the pitfalls of trying to implement a marketing automation tool without thinking through the implications. ~MIC
Less Than 10% Of Companies Are Using Marketing Automation, Here’s Why
By Mike Templeman
I don’t eat Cheerios. But if I did, I probably would have spat my Cheerios out of my mouth in shock after I recently read a few reports on marketing automation. Here’s why I was stunned: marketing automation is one of the most valuable tools the modern day marketer can employ and yet it’s been adopted by less than 10% of companies.
When I discuss marketing automation, I’m not talking about email automation. That’s just a small piece of marketing automation. Email automation and automated drip campaigns have been around for over a decade and when they’re included into this discussion the adoption numbers are higher. Real marketing automation is a tool that allows marketing departments to more effectively market to multiple channels (usually social, blogging, email, landing pages, etc.) and automate certain tasks.
As I discussed in a previous article, the market is dominated by several established players like HubSpot, Marketo, Eloqua, Act-On, and others. But there are new entrants that are popping up every day.
If we’re finding a host of solutions that fit almost any company’s situation and the technology has been around for over half a decade, then what are some of the reasons businesses still haven’t adopted the tech?
Marketing Automation Share
Because a true marketing automation system requires implementation with a company’s website, social media accounts, CRM, and a few other existing infrastructures, this can cause some smaller companies who don’t have the budget or time some heartburn. Add to this that most marketing automation companies don’t have the best track record when it comes to kickoffs and customer support (just do some Google searches), and you can understand why this hurdle can become a mountain in the way of adoption.
However, most new customers of these marketing automation products aren’t aware that there are robust ecosystems of partner agencies who can take care of the implementations, integrations, and all the other aspects of setting up the software. My own firm is one of these partners for several of the marketing automation products and we are often called upon to fix a poorly executed implementation. Numerous times we’ve come across a client who was ready to give up on marketing automation because they never saw the value in the software because it wasn’t kicked off correctly.
This isn’t condemning the marketing automation companies for their poor service, but rather I believe this is a typical challenge for any software company. As I’ve written about before, software scales infinitely and requires less infrastructure. Services are difficult to scale and require a huge amount of infrastructure. So, these software companies that require an implementation service often lack on the service side and excel with the software. This is also the reason many of them have turned to partner networks.
Because the marketing automation companies require the software to be implemented, they usually pass the costs of that implementation on to the customer. For enterprise organizations, this is nothing new. They’re used to paying thousands and thousands of dollars to have new systems implemented. But for small and mid-sized companies, this is a whole new idea.
Many of the major marketing automation software groups also require year-long commitments with up-front payment. This again constitutes a huge deployment of capital for a small or mid-sized company. But again, the enterprise organizations are used to this and often times expect these types of terms.
We see the evidence of this in the fact that over 25% of Fortune 500 companies have already adopted marketing automation, a significantly higher percentage than their smaller brethren. And within enterprise organizations the adoption number remains higher than with smaller companies.
There are ways around some of these cost issues. For instance, partners can sometimes modify payment terms to a quarterly payment structure to ease the contract costs. They’re also able to sometimes waive the kick-off fees if they perform the training and implementation. But when a company doesn’t have the budget for a third-party agency or the upfront costs, they’re often left without many options.
However, there is a new wave of software that specifically target the smaller and mid-sized companies. These new marketing automation companies do away with yearly contracts and allow monthly payments. They also don’t require kick-off fees.
Now, there are tradeoffs. These lower-end products don’t have the reporting, tracking, and attribution capabilities of their more established competitors. They also lack in some functionality when it comes to workflows and customization. But I believe the saying goes, “You can’t have your cake and eat it too.” This forces companies to make difficult decisions when choosing a software.
While marketing automation claims to automate many tasks, that doesn’t mean that those automations come ready to deploy right out of the box – which is now a misnomer since all marketing automation software is cloud-hosted and requires no box. These automations actually require a lot of up-front work and must be maintained and optimized over time.
This has led to a cobwebbing effect with a lot of marketing automation software. We’ve seen hundreds of companies that purchased the software, paid the fees, had it implemented, and then let it sit, unused for over a year. The cause of this? They all say they didn’t have the time or expertise to manage it.
Again, this explains why enterprise organizations are better able to adopt and deploy marketing automation. They have the budget and the resources to hire an individual or team whose sole responsibility is the management and optimization of their marketing automation. Your average small business owner couldn’t dream of finding the time to manage the software.
This again reinforces the need, in many cases, for a third-party agency to manage the software. And this seems to be a pattern with each of these barriers. Which brings me to my final point.
Is True Marketing Automation A Service + Software?
Perhaps in our haste to “webify” and automate everything around us, we have inadvertently stepped into a realm where we’re encountering the limitations of technology.
Marketing automation is often sold as a solution. However, I would argue that it is a tool. The real solution seems to be a human team utilizing the tool to automate and simplify their marketing tasks. But software scales and services don’t. So now the marketing automation companies are faced with the conundrum. They also can’t have their cake and eat it too. If their product requires a heavy amount of service to truly be a solution, then do they need to begin advertising that?
I’m not sure what the answer to this problem is. Maybe we’re still too early in the process and everything we see is just marketing automation 1.0. Perhaps a solution will come around that fixes all of the issues I listed in this article. Or maybe, software companies will need to accept the fact that there are still things we can’t automate and infinite scalability is still a myth.