In a recent live Webinar, Finding That Elusive “Marketing Automation Budget,” Alex Shootman, chief revenue officer at Eloqua, and Todd Davison, president of Bulldog Solutions, discussed ways to validate revenue-driving strategies in order to secure budget for marketing automation in 2011.You can view the on-demand Webinar here.
Alex and Todd answered some audience questions during after the event. Their responses are below.
Question: How do we demonstrate the impact marketing automation and demand generation have on bottom-line revenue through cost/benefit analysis?
Alex Shootman, Chief Revenue Officer, Eloqua: At Eloqua, we’re growing really fast, so there’s a lot of pressure on our sales and marketing organization to grow the business, and so what we’re constantly looking at is, “What’s the most effective resource to do what job?” For example, we know it costs us $600 for Marketing to generate an MQL. If we needed a sales rep to generate an MQL, based on the time it takes and their cost, it might be $1600. Here’s what we know at Eloqua: A percentage point of conversion from MQL to close for us is worth a million dollars of sales expense. Once we start getting those kinds of numbers down, we can start making some really great decisions. What this is really about is the front end of your business, Sales and Marketing together, and you’re trying to make the smartest resource allocation decisions that you can to grow revenue. Basically, we try to get to the point where we understand that if we do demand generation well, and we increase conversion rates, what is the economic impact? That’s what everyone needs to be able to understand in their own organizations.
Todd Davison, President and Co-founder, Bulldog Solutions: If we dig into the two things you heard across both presentations today, it was 1) the revenue impact, and 2) the efficiency and cost improvement. You add those two together, and they equal a bottom-line net result.
Question: What would your argument be against an anti-marketing automation stance of “Why can’t we just do this stuff manually ourselves?” (In other words, nurture leads manually, set up e-mail address capture forms on the website to do the work, etc.)
Todd Davison, Bulldog Solutions: Number one, doing all of that manually is impossible to do effectively. Given how much adoption is exploding across the industry and the results, this is not about improving a department or two. This is a matter of a having a competitive advantage or a severe competitive disadvantage. Challenging that argument at a high level, the C-suite, would be step one. And step two would be, instead of just looking at the cost of the license itself, look at the total cost to produce and the yield of what can be delivered. We find that technology does not end up to be one of the largest line items in the overall budget once you start to mature.
Alex Shootman, Eloqua: In reality, we’ve been nurturing leads forever. If you think about a great salesperson 20 years ago: They had an amazing ability to stay connected personally to clients, to remember when their birthday was and call them up, to create a relationship. The challenge is that you just can’t hire enough salespeople to do that. The other challenge is digital body language. There’s so much we learn about our clients by watching what they do with our content. Eloqua executes 2.4 billion transactions a day, which is more than NASDAQ, all intended to hand customers the ability to watch what their clients are doing and respond in order to maintain a relationship. The answer is, yes, you could do that manually. But you can’t hire enough salespeople to do it.
Question: The marketing automation market is getting crowded with vendors, noise and claims. What are some of the core features and considerations before writing an RFP or running a competitive analysis?
Alex Shootman, Eloqua: First thing to consider: You’re not buying marketing automation software. You’re buying results. The focus should be, then: What is it going to take to drive results? Success is driven by the organization that’s supporting it, by the depth of the client success team, by the depth of the best practices and education. Fundamentally, this is about a mindset in a company as much as it’s about a technology. So, you’ve got to look into the organizations and understand the ones that have the financial wherewithal to support you to get those results. And then you’ve got to think about the core philosophy of different organizations. There are essentially two philosophies: One is from the ground up, a piece of software built to execute a campaign. The second is a piece of software built to be the marketing platform that you use. The difference is that one thinks about a campaign as a single instance, and the assets that go around that campaign; the other thinks about content marketing as a strategy, and the fact that your content and landing pages are going to be reusable as you build an overall demand-generation strategy. In summary, you’ve got to look at the resources you’re going to need to drive results. And you have to look at the core philosophies of the various companies—how they view marketing and demand generation, because they built their software according to how they view it.
Question: The ability to create automated nurturing programs seems to be a selling point for marketing automation. Are there any ROI data that can be used to project returns on lead nurturing programs?
Todd Davison, Bulldog Solutions: The short answer is, yes. But the specifics are dependent on the type of nurturing. Brian Carroll, the CEO of InTouch, noted that lead nutruing can yield 15% to 200% in additional, qualified leads. But that’s a pretty big range. During the event, Alex mentioned a nurture program designed to reconstitute dormant leads. Along similar lines, our client MarkLogic created a dormant lead re-engagement program that generated a 10% response rate, dislodging a few conversations that had stalled. But nurturing isn’t only about dormant lead re-engagement. There are many kinds of lead nurturing and they deliver at different levels. We have a white paper, Using Lead Nurturing to Build an Ongoing Dialog that defines those types and some of the expectations around them.
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