Forrester Automation Redefining Marketings Game Plan

A Forrester Consulting Thought Leadership Paper Commissioned By Silverpop

Automation: Redefining Marketing’s Game Plan
How Marketers Should Rethink Their Approach To Marketing Automation

May 2012

Forrester Consulting

Table Of Contents

Executive Summary ................................................................................................................................................................................. 2

The Current State Of Marketing Automation.................................................................................................................................... 3

A Limited Playbook Blocks Marketers’ Efforts .................................................................................................................................. 5

Up Your Game By Positioning Automation As A Strategic Asset ................................................................................................. 9

Add New Plays To Your Playbook With Customer Value ............................................................................................................ 10

Key Recommendations ......................................................................................................................................................................... 12

Appendix A: Methodology .................................................................................................................................................................. 13

Appendix B: Supplemental Material .................................................................................................................................................. 13

Appendix C: Demographics ................................................................................................................................................................ 14

Appendix D: Endnotes.......................................................................................................................................................................... 15

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Executive Summary
Customers and prospects control the conversation like never before. Through an exploding number of channels, real-
time feedback, and powerful mobile devices, customers dictate what companies
should talk to them about and how frequently they should do it. Marketers have Marketers focus on
automation’s efficiency
responded to this shift by using marketing automation tools, such as campaign benefits, but big opportunities
management and lead management systems, to manage customer and prospect reside in using automation to
enhance marketing’s strategic
communications. While users focus on the tools’ improvements to process approach to customers.
efficiency, they too often fail to exploit automation’s potential to evolve
marketing’s strategic approach to customers and to peers in sales and support.

In January 2012, Silverpop commissioned Forrester Consulting to understand how marketers use marketing
automation tools to drive communications, develop campaigns, and deliver valuable customer experiences. Forrester
also analyzed how marketers’ current capabilities affect their emphasis on customers and examined how marketers
expect technology to alleviate the challenges they experience.

Through in-depth surveys with 155 US-based senior marketing professionals, Forrester found that most marketers
focus on the efficiency benefits of marketing automation tools. Many still overlook the tools’ potential to build
programs that drive customer lifetime value or boost alignment with sales or support. Not realizing these strategic
benefits of automation can result in lowered customer satisfaction, reduced lead quality and revenue, conflict with other
departments, and increased dissatisfaction with their automation tools. It can also create paralysis from the resulting
flood of customer data.

Key Findings
Forrester’s study yielded the following key findings:

 Marketers embrace automation and plan to increase usage. Automation allows marketers to eliminate
guesswork from demand generation and customer relationship management. Most respondents told us they plan
to increase the number of automated campaigns and see additional headroom for efficiency improvements. The
performance of automation tools allows enterprising marketers to iteratively improve customer relationships
through a test and learn approach.

“I do believe in the value of marketing automation — as we learn more about our customer base and their needs
and wants, we are able to go back and continually refine our campaigns.” (Director of marketing, global
strategy and design agency)

 Marketers’ focus on process efficiency obscures the strategic potential of automation. Marketers embrace
automation, but most users focus on its ability to improve efficiency rather than effectiveness and organizational
alignment. The most mature users in our study use automation as a method of improving lifetime value, building
dialog with customers, and increasing collaboration. Less mature users were more likely to rely on simple
response metrics, fail to use advanced campaign design, and blame the technology when their campaigns create
problems for other parts of the business.

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“The easiest way to measure performance is email. How many sales you can get from leads that are generated
by automated marketing — compare sales dollars to actual contacts coming in. That’s the way we measure it.”
(Manager of online marketing, Fortune 500 financial services institution)

 New and experienced users can readily improve program maturity. New and experienced users of marketing
automation can build programs that are both efficient and customer-centric. The winning automation playbook
improves customer relationships and collaboration by focusing on customer value, business impact, cross-
departmental alignment, dialogue-based campaigns, and real-time automation.

“The lesson we learned was that by focusing on improving one campaign at a time, marketing automation could
drive revenue and improve customer ROI.” (Manager of email marketing, large online retailer)

The Current State Of Marketing Automation
Marketing has evolved significantly over the past several years, and the pace of change continues to accelerate. Global
economic conditions constrain budgets and headcounts, while at the same time the number of communication
channels, touchpoints, and customer expectations for companies’ responsiveness have all grown. To counter these
trends, marketers have employed marketing automation solutions — from campaign management, lead management,
or email service providers — to design and direct customer interactions with more speed and greater personalization
than is possible with manual processes.

Forrester defines marketing automation as:

Tooling and process that help generate new business opportunities, improve potential buyers’ propensity to
purchase, manage customer loyalty, and increase alignment between marketing activity and revenue.1

Marketing automation solutions provide direct gains in operational efficiency and underlie more sophisticated
customer relationship programs. Marketers surveyed indicated that they have and will continue to increase investments
in programs enhanced by automation.

 Marketers see automation as a critical technology. Automation allows marketers to eliminate guesswork from
demand generation and customer relationship management. So it’s not surprising that marketing automation
technology finds warm reception within marketing, delivering improvements to customer experience and
allowing users to meet increased resource demands. Large majorities of marketers plan to increase the number of
automated campaigns, and see additional headroom for the technology to continue to improve the efficiency of
marketing processes (see Figures 1 and 2).

“I do believe in the value of marketing automation — as we learn more about our customer base and their needs and
wants, we are able to go back and continually refine our campaigns.” (Director of marketing, global strategy and
design agency)

 Yet most marketers fail to position automation as a strategic asset. The most mature marketers – those using
automation for 5 or more years – showed clear differences in how they measure the performance of their

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automated campaigns. While all marketers use response metrics, mature marketers were more likely to use
incremental revenue, cross-sell and up-sell, and customer lifetime value metrics (see Figure 3). This focus on
business-impact allows mature users to demonstrate that automation builds better customer relationships and
improves organizational alignment.

“The lesson we learned was that by focusing on improving one campaign at a time, marketing automation could
drive revenue and improve customer ROI.” (Manager of email marketing, large online retailer)

Figure 1
Future Plans Show No Indication Of The Trend Toward Increased Automation Slowing Down

“How will the number of automated campaigns change over the next 12 months?”
Decrease,
2%

Stay the
same, 39%

Increase,
59%

Base: 155 US marketing professionals
Source: A commissioned study conducted by Forrester Consulting on behalf of Silverpop, February 2012

Figure 2
Marketers Believe In The Value Of Marketing Automation

“I believe that marketing automation will ________ the efficiency of my marketing processes:”

Decrease,
Not change, 3%
14%

Increase,
83%


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Figure 3
Mature Marketers More Often Focus On Sophisticated Measurements Of Campaign Performance

“How do you assess the performance of your automated marketing campaigns?”

Use AM for four years or less Use AM for five years or more

86%
Response metrics
74%

34%
Incremental revenue
55%

21%
Cross sell/up sell
38%

15%
Customer lifetime value
33%


A Limited Playbook Blocks Marketers’ Efforts
Mature users focus on marketing automation’s ability to improve efficiency, but also look to the technology to improve
effectiveness and organizational alignment. Automation allows users to design sophisticated, dialogue-based
interactions. It also enables the marketing department to align its capabilities with the needs of other departments, such
as sales and support.

Yet we found that most marketers:

 Frequently fail to use marketing automation to nurture customer relationships. Most respondents miss out
on automation’s ability to transform the marketing department’s focus from generating lists to engaging with
customers. Respondents newer to automation told us that they use the tool for customer activation and data
gathering, while mature users focus on lead nurturing, cross-sell and upsell, or conversion completion (see Figure
4). Digging in to current usage, we see that marketers tend to focus on easing their own workflow through
recurring campaigns, rather than building relationships through behaviorally triggered, multi-step or dialogue-
based campaigns (see Figure 5).

“When we implemented the first time, we jumped in without planning and found that it was not the best way to
drive leads to sales. We needed to be more organic, to allow behavior to drive contacts, not just easily increase
the number of contacts.” (Manager of email marketing, large online retailer)

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Figure 4
Engagement Outshines Sales And Lead Generation

“What do you use marketing automation for?”

Customer engagement/activation 57%
Customer data gathering 47%
Loyalty 47%
Sales and marketing alignment 42%
Lead nurturing 38%
Offer generation 38%
Cross-sell or upsell 37%
Conversion/transaction completion 25%
Process efficiency/response time 17%
Onboarding 15%
Anti-churn or attrition 11%


Figure 5
Recurring Campaigns Are Currently Most Popular, But Interest In Behavioral Data Is Increasing

“What do you use to trigger automated messages? What will you use in
the next 12 months? (check all that apply)”
Now In 12 months

Recurring 65%
69%

Behavioral 53%
66%

Situation or event-based 50%
45%

Multi-step or multi-wave 29%
30%

Dialogue 14%
17%


 Focus on low-level metrics that do not impact the business. Marketers must show that technology investments
deliver business impact to quiet skeptics within and beyond the marketing department. Yet the vast majority of
users focus primarily on basic response metrics, such as email opens and clicks. Only a minority of respondents
judge their programs based on incremental improvements to lead generation or revenue (see Figure 6). Fewer
still use strategic measures to guide the development of their marketing automation programs, such as impact on
customer retention and lifetime value (see Figure 7).

Page 6


“The easiest way to measure performance is email. How many sales you can get from leads that are generated
by automated marketing — compare sales dollars to actual contacts coming in. That’s the way we measure it.”
(Manager of online marketing, Fortune 500 financial services institution)

Figure 6
Response Metrics Are Used To Evaluate Success, Leaving Customer Or Business Impact Metrics Largely Ignored

“How do you assess the performance of your automated marketing campaigns?”

Response metrics 80%
Improved lead generation 41%
Incremental revenue 40%
Customer ROI 31%
Cross sell/upsell 25%
Customer retention rates 24%
Lead nurturing improvement/sales impact 23%
Customer lifetime value 21%


Figure 7
Email Behavioral Data Is Used Most Frequently

“What characteristics of behavioral data do you use?”
Email opens/clicks 66%
Visit frequency 57%
Ad clicks 52%
Purchase 51%
Form completion 38%
Attending an event 33%
Ad impressions 29%
Form abandonment 24%
Shopping cart event 22%
Shopping cart abandonment 21%
Social activity 19%
Geolocation activity 18%
Page category 11%
Site path 11%
Don’t know 1%


 Fail to build buy-in with other departments. As the number of customer touchpoints increases, marketers have
the opportunity to extend their reach (and increase their budgets) to departments outside of marketing, such as
eCommerce, sales, loyalty, or customer support. Yet interviewees failed to co-opt other departments when

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planning their marketing automation implementations. Even after implementation, they fail to collaborate with
other departments when enhancing or adding automations. Most survey respondents told us that they operate
the technology solely from within the confines of the marketing department (see Figure 8).

“Sales isn’t comfortable with the way marketing automation is working. They still want a little black book of
customers they aren’t willing to share with anyone else . . . our biggest challenge is to get end user buy-in on our
side.” (Manager of online marketing, large business consulting firm)

Figure 8
Most Automation Users Come From Three Main Marketing Departments

“In which area of marketing are you most “Which area of marketing oversees marketing
involved?” automation? (Select all that apply)”

Brand marketing 31% Marketing strategy 38%

Marketing strategy 22% Brand marketing 36%

Interactive marketing 21% Campaign management/CRM 36%

Campaign Interactive marketing 25%
15%
management/CRM
Social/emerging media Social/emerging media 20%
7%
campaigns
Customer data analysis 3% Analytics/customer intelligence 17%

eCommerce and eBusiness 0% eCommerce and eBusiness 14%

Customer experience 0% Sales 11%

Traditional advertising and Customer experience 10%
0%
media
None of the above 0% Demand generation 6%


 Do not take advantage of the resulting flood of customer data. Competitive advantage increasingly derives
from customer knowledge. Automation platforms improve marketers’ access and ability to analyze customer
data. Yet most respondents focus on access, not insight. Marketers are adding behavioral, demographic, and
survey data (see Figure 9). Yet their infrequent use of preference, propensity, and influence data shows that they
miss out on the true potential of the technology. As long as users focus on data access instead of insight, it’s no
surprise they feel overwhelmed by the data deluge.

“We are highly satisfied with our marketing automation provider, but our challenge is that we are now
drowning in data. We need to rethink how we use automation to get us in the right position.” (Manager of
online marketing, Fortune 500 financial services institution)

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Figure 9
Marketers Take A Pragmatic Approach To Triggers

“What types of data do you use to construct triggers?”

Transaction history 55%
Promotion and response history 51%
Behavioral data 48%
Demographic data 48%
Survey data 38%
Social activity or comments 26%
Account activity or balance 25%
Psychographic data, including preference 20%
Third-party data appends 14%
Geolocation data, proximity, or check-ins 12%
Mobile activity 11%
Propensity scores 9%
Influence scores 8%
Don’t know 2%


Up Your Game By Positioning Automation As A Strategic Asset
Whether you are considering a marketing automation pilot or are reevaluating an established program, approach
marketing automation as a strategic asset, not a tactical expedient. To unlock your tool’s true potential, base your
automation playbook on generating customer value, both for the customer and your business partners. A focus on
process efficiency will help you put quick points on the scoreboard, but will not be enough to win the game. A
marketing automation program that serves customers and prospects by increasing personalization, relevance, and
lifetime value will provide a long-term competitive advantage.

How can marketers transform automation tools into a strategic asset?

 Marketers new to automation should plan a phased technology strategy. If you haven’t yet made an
investment in a marketing automation tool, begin by creating a game plan that begins with establishing
responsiveness and execution efficiency. Structure future phases on customer value so that you achieve cross-
departmental alignment, using techniques like lead scoring and nurturing. The most mature phases of your plan
should focus on using automation to drive customer lifetime value through dialogue-based campaigns or lead-to-
revenue management. Use this game plan to guide your tool selection, so that you aren’t forced to rip and replace
your platform in order to mature your program.

 Marketers experienced in automation should redesign program goals and tactics. If you are frustrated by the
current state of your program, shift your goals so that you can show value beyond the initial productivity gains.
Create a game plan that ties program performance to incremental revenue, improved lead quality, cross-
sell/upsell, or retention. Then change the design of your campaigns, triggers, channels, and performance metrics

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so that you create the effect of real-time dialogue with customers and prospects. Delivering value to both the
customer and your business will provide you with the business case for future program expansion.

Add New Plays To Your Playbook With Customer Value
New and experienced users of marketing automation can design programs that are both efficient and customer-centric.
The right playbook will demonstrate how your automation program improves customer relationships and improves
collaboration across the business.

So what defines a winning marketing automation playbook?

 A focus on customer value. The marketing automation playbook focuses the marketer’s game plan on greater
content and message relevance and improved organizational alignment over pure efficiency improvements.
While incremental improvements to marketing processes provide a series of quick wins, marketers must plan to
advance the maturity of their automation programs. Advanced programs demonstrate value across the
organization through building use cases focused on lead scoring and nurturing, cross-sell and upsell, retention,
and customer dialogue.

 Better metrics for enhanced accountability. Marketers cannot rest on channel or response metrics to assess the
performance of automated marketing campaigns. In order to guide customer behavior toward business goals,
marketers must use higher-order metrics, such as improved lead generation, incremental revenue, return on
investment (ROI), and customer lifetime value. With these measures in hand, marketers can demonstrate the
value of these programs to their peers across the business, secure buy-in for future enhancements, and
understand where changes will have the greatest impact.

 A priority on collaboration within and beyond marketing. Sales, eCommerce, customer support, and loyalty
teams will all feel the effects of a mature marketing automation program. For those effects to be positive, however,
marketers must invest in cross-functional collaboration. For example, B2B marketers should not automate a lead
generation process without working with sales to define a lead scoring method, forwarding qualified leads
directly to sales while routing the remainder into lead nurturing programs. Marketers should see cross-functional
committees less as hindrances and more as methods of easing the path to marketing automation’s success.

 Campaigns that go beyond simple recurring execution. Mature marketers make heavy use of multi-step and
dialogue-based campaigns, using a combination of inbound and triggered outbound communications to deepen
relationships with their prospects and customers. Why? While recurring programs provide a simple method of
retaining contact with customers, they focus on easing the marketer’s burden, not improving the relevance of
messages for customers. Behavioral triggers, such as email clicks and form completions, provide a relatively
simple way of implementing these campaigns, but marketers should also look to changes in customer state, such
as attending an event or changes in account activity, to implement advanced campaigns.

 A platform that enables real-time automation. To keep up with customers in today’s fast-paced world,
marketers should look to build real-time messaging programs, based on integrated data systems, analysis and
triggers. Integration requires an upfront investment in systems and processes, but the effort is necessary to

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implement real-time responsiveness in marketing automation. The investment will return even greater
responsiveness, relevance, and performance, since this capability will allow you to take advantage of customer-
initiated actions, such as visits to your website, mobile check-ins, or online social network activity.

Figure 10
Improve Marketing Effectiveness With The Strategic Marketing Automation Playbook

Accountability Real-time Automation

Customer Collaboration
value

Campaign
design

Source: Forrester Research, Inc.

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KEY RECOMMENDATIONS
An organization that wants to embrace marketing automation must determine the appropriate mix of enterprise
technology, smart skill sets, intertwined processes, and cross-departmental involvement. Prepare to redefine your
organization’s marketing playbook in the following ways:

 Think globally, act locally. Whether you’re just getting started or reevaluating your existing marketing
automation program, remember that you need to find a balance between strategy and action. Your marketing
automation program must show how it will address business strategy even as it delivers incremental
improvements. Pick high-value interactions, such as lead generation or conversion events, and then develop a few
automated response campaigns by defining simple scoring rules based on demographics or triggers based on
behavioral factors. As you build on the success of these initial efforts, you will be able to develop more complex
campaigns based on customer value.

 Center processes on customer knowledge. Automating marketing processes provides a direct benefit in
efficiency to the marketing organization. To realize the true potential of marketing automation — where customers
perceive an improved relationship with your company via faster, more relevant interactions — you must
consistently implement analytical and measurement practices at each touchpoint, then apply any customer
insights derived to automated programs. Aggregating and analyzing customer, promotion, and response data for
actionable insights is an essential characteristic of an advanced marketing automation program.

 Develop your marketing technologists. Marketing’s future will never be less technology-driven than it is today,
and marketing automation only accelerates that trend. To improve your capabilities, look to strengthen your
marketing technologists — web developers, marketing operations professionals, application developers, and
database administrators — in order to improve the performance of both day-to-day operations and the long-term
development of your marketing technology stack.2 Don’t be afraid to look for individuals with nontraditional
marketing backgrounds: Marketing technologists frequently come to the marketing department from IT
organizations.

 Nurture the marketing and IT relationship. Although marketing technology buying decisions are increasingly
made by marketers, IT organizations still remain closely involved in requirements definition, product evaluation,
vendor selection, and implementation. Marketers should leverage IT’s role not only to smooth the process of
getting buy-in, but to build trust as well. IT professionals who trust their peers in marketing are less likely to
hamstring marketers’ needs for managing customer data or developing new process automations.

 Don’t be too quick to blame technology. Marketing automation programs take many months to get up to full
speed. These systems require significant configuration as well as deep integration with other tools, but they also
depend upon organizational readiness in order to flourish. If you feel that your program isn’t advancing quickly
enough, take the time to examine non-technological contributors to the problem. Get your sales and marketing
teams together to diagnose the problems in the lead nurturing process. Or bring together your interactive
marketers and eCommerce teams to see how you can improve the customer experience. Treating your technology
as the scapegoat could result in unnecessary pain as you lose time swapping out systems.

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Appendix A: Methodology
For this study, Forrester conducted an online survey of 155 mid- to senior-level marketers in the US to evaluate how
they use marketing automation to drive communications and lead nurturing efforts in service of enhanced customer
experiences. Survey participants included decision-makers in brand marketing, interactive marketing, campaign
management, customer relationship marketing, and social/emerging campaign management. Questions provided to
the participants asked about their challenges and current capabilities, the impact of marketing technology, and their
overall opinions about metrics and measurement. The study began in January 2012 and was completed in February
2012.

Appendix B: Supplemental Material

Related Forrester Research
“Automating Lead-To-Revenue Management,” Forrester Research, Inc., December 9, 2011

“B2B Marketers Must Better Prepare For Marketing Automation,” Forrester Research, Inc., April 26, 2011

“Investing In Marketing’s Technology Future,” Forrester Research, Inc., October 24, 2011

“Revisiting The Enterprise Marketing Software Landscape,” Forrester Research, Inc., February 14, 2012

Page 13


Appendix C: Demographics

Figure A
Respondent Demographics

“Which industry vertical are you from?” “To whom does your company sell primarily?”

Technology &
26%
manufacturing
Financial Consumers,
19% Businesses,
services/insurance 23%
36%

Media & publishing 16%

Services 13%

Retail 10%
Both
consumers
Consumer packaged goods and
8%
(CPG) businesses,
41%
Travel & hospitality 7%


Figure B

“Which of the following most closely describes the department you work in?”

Advertising, 8%

Marketing, 92%


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Figure C

“Using your best estimate, how many “Which of the following best describes your
employees work for your company position at your company?”
worldwide?”

1,001 or
more Executive,
employees 6%
28%

Vice
president,
11%
Manager,
54%

Director,
28%

50 to 1,000
employees
72%

Base: 155 U.S, marketing professionals

Appendix D: Endnotes

1
Marketers serving buyers that make high-consideration purchases need to communicate with those individuals at
every stage of their path to purchase. To manage this depth of engagement at scale requires marketing automation.
Source: “B2B Marketers Must Better Prepare For Marketing Automation,” Forrester Research, Inc., April 26, 2011.

2
To manage and take advantage of the increasing use of technology, marketing departments are developing new
organizational structures Forrester calls the Marketing Technology Office. The office, headed by a chief marketing
technology strategist, guides technology strategy, develops the marketing technology stack, and evangelizes innovative
uses of technology throughout the marketing department. Source: “Investing In Marketing’s Technology Future,”
Forrester Research Inc., October 24, 2011.

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