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Top 7 Trends Driving Marketing Automation

This is a guest post from Lauren Carlson of Software Advice. Lauren and her firm specialize in connecting software buyers with software vendors based upon the strongest fit. They are what all great salespeople aspire to be...a trusted advisor. Learn more about Software Advice here.

Marketing Automation is one of the fastest growing segments in the CRM market. It wasn't that long ago that people weren't even sure what marketing automation was or how it functioned. Now, marketing teams are aggresively seeking out these systems. Marketing automation vendors such as Eloqua, Marketo and Genius are reaping the benefits and growing as fast as the segment they support. Clearly, the marketing automation industry has a strong tailwind at its back. But where is it coming from?

The B2B sales environment has changed drastically. Sales professionals are finding that it is increasingly challenging to reach potential prospects, and they are changing their business tactics in order to cope. At my company, Software Advice, we have experienced this first-hand through our phone calls with the thousands of software buyers we interact with each day. There are several specific trends that are changing the way buyers purchase, making marketing automation an essential addition to any organization.

The following are seven macro trends that I believe are pushing the growth of marketing automation.

1. Buyers want valuable content.
The traditional marketing jargon needs to be replaced with original content that provides value and education to the buyer.

2. Buyers are hesitant to engage over the phone.
Sales professionals are constantly facing the issue of decreased sales engagement.

3. Buyers require marketing accountability.
Traditionally, marketing ROI was difficult to measure on positioning, collateral and brand building.

4. A down economy results in longer sales cycles.
When money is tight, people are less inclined to buy. Sales professionals are faced with more and more prospects that are more risk-averse than ever.

5. Consumerization of B2B sales processes.
B2B buyers want their sales process to mirror that of their B2C exchanges. They demand clear and concise pitches, simplified pricing, quick implementation and ease of use. They also want to interact with sales as little as possible.

6. Marketing channels have transformed.
With the advent of the Internet, the way we communicate has drastically changed. This means that companies also have to change the way they market.

7. SaaS is the preferred deployment method.
Due to the high number of relatively new entrants to the marketing automation space, many of these vendors are built on a modern, software-as-a-service (SaaS) architecture. This deployment method enables users to get up and running faster than with traditional on-premise models. Also, with subscription pricing, the marketing team can easily add a digestible line item to their budget, as opposed to getting approved for a big capital expenditure.

Please visit the original post on the Software Advice blog for a more in-depth look at each trend and to leave your comments on the topic.

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Show me the Money!

I got the chance to attend a couple of shows in September - Shop.org and Software Business 2009.  The former was a gathering of thousands of people representing retail organizations of all shapes and sizes as well as those who serve them - technology providers like us. To give you a feel, here is a 1-minute clip from the show floor - I'm in the last 20 seconds (20 seconds of fame?!!).

The latter was a gathering of tens of people from technology companies, primarily software as a service organizations, start-ups to publicly traded.  I was part of a keynote panel to discuss when, how and why companies would leverage partner programs (with a focus on OEM models) within a go to market strategy.  I'd like to give a shout out to Kevin Meldorf, the session leader for inviting me to join industry heavyweights like Bob Mahoney (Oracle), Colin Mahony (Vertica) and Barry Mattingly (Corrao Group) and for a fantastic learning and growing experience!

Even though Software Business was under attended due to the timing (end of quarter?) and the lack of promotion by the media company (last Tweet in May?! ), there were some great presentations, which reminds me of an old sales joke.  After a long day, one sales guy asks the other how his day went.  The guy says, "I delivered an awesome presentation to my biggest prospect!" to which the other replies, "yeah, I didn't sell anything either..."

One of the more memorable and relevant to all of us was done by David Fritz and Jim Triandiflou (the former CEO of Centive) from Growth Solutions L.L.C.  It was titled "Sales Benchmarks from the World's Best Software Sales Forces", which was based on a survey of more than 20 leading Silicon Valley firms.  Show me the money!!

• Average sales cycle 149 days (this had extended by an average of 40 days from 2008)
• Conversion rates to close - 4% of leads, 23% of opportunities and 49% of proposals were "closed won"
• Average performance to quota < 50% of all reps (23% Senior AE, 33% Junior)
  
• Average annual bookings* per rep was $442,000 (90th percentile = $664,000 per rep)
• Sales & Marketing expense as a % of revenue was 36%
• Overall productivity was measured by revenue per employee at $192,000 for on-premise software and $149,000 for SaaS
• 75% of the firms were currently hiring Sales and Marketing positions
  

This is the good, the bad and the ugly folks.  Clearly the economy is stringing out sales cycles with buyer uncertainty and risk.  There is also a clear lack of integrity in setting quotas that directly impacts retention and efficiencies.  How do these figures compare with your experience?

You can participate or dig into the data here.  Or you can check out their book, New Sales Roles (2nd edition).

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