The True Costs of Marketing Automation Software

Providing a meaningful, relevant and seamless user experience is the only way to achieve success on the Web today. The difference between top digital destinations like Adobe and Zappos and the rest of us, however, is in their execution, not just their ideals. Enter marketing automation software.

Marketing automation software can help bridge the large gap between small startups and big brands - and nearly every company in between. When it comes to pulling the trigger on marketing automation software though, lack of resources (time and money) is a barrier for most.

Website Magazine interviewed three Internet executives who are using marketing automation to discover how much they paid, what they were paying for and any return on investment they received from the software to help readers like you determine the risk-reward of some of the most popular software solutions on the market.

What led to the decision to purchase marketing automation software?

We had a small, two-person marketing team, and with our limited resources, we were spending too much time manually segmenting lists and testing email copy using an email marketing system we had outgrown. We decided that to target messaging and send the appropriate emails from our corresponding sales representatives, we needed a more sophisticated tool, which we could benefit from the lead scoring, nurturing, landing page creation and other functionality that marketing automation software provided instead of just upgrading to another email marketing system.

What marketing objectives did this product meet for your organization or fail to meet for your organization?

Pardot helped us generate more leads for our sales team, nurture our existing customers with educational content offers, drive more traffic to our website and blog, capture more data about our prospects (such as the referring source of each lead and whether they had visited our site before) and better score/evaluate our leads so that our sales team could prioritize follow-up.

Did you get a return on investment?

Absolutely, we actually quadrupled our lead qualification rate in the first year, and thereby boosted our lead sales by four times. We also were able to grow the number of advertising customers on our site by offering promotions to our highest scoring prospects, thereby resulting in double-digit revenue growth for the company.

Would you recommend marketing automation software to other businesses?

I would recommend marketing automation to companies once they have a marketing strategy in place, and it helps to also have a stockpile of content that they've created (blog posts, white papers, ebooks, video, etc.). Also, marketers considering marketing automation software should have a good understanding of what makes a sales qualified lead and how they intend to generate those leads and ultimately, nurture them into customers. Without the answers to those questions, the software is a waste of money because you'll be paying for functionality you can't use until you figure out your plans.

Additionally, I think you'd probably need at least 2-3 people on your marketing team before you could make full use of marketing automation software, because it can be a full-time job. Plus, there aren't many strong marketing automation vendors for business-to-consumer companies, so it makes more sense if you are business-to-business provider and your customers have a long sales cycle that requires multiple marketing touch points and interactions.

Anything else you'd like to add about the costs of marketing automation software or your experience with it?

I think one of the hidden costs of marketing automation software is the technology/IT department's involvement and time needed to implement the software. Marketing automation implementation often involves integrating the software with other systems and installing tracking codes on your website, and that can take some time to pencil in since tech departments often have many other priorities. Also, several of the marketing automation software vendors we considered vastly underestimated the time and resources it would take for us to be fully up-and-running on the software. Most said it would take a marketing department a couple weeks, maybe a month, but in our experience, it was more like six months before we were making the most of the software, and that's been true of other companies we've helped find marketing automation software for, as well.

Lastly, some of the market leaders charge training costs on top of the monthly or annual cost of the software (fortunately, Pardot did not, which is one of the reasons we decided on that system). If you have a number of sales and marketing users who need training, that can easily add thousands of dollars to your quote.

What was your experience with marketing automation software?

With marketing automation, most companies overlook a large, hidden cost. It's the internal headcount requirement to care and feed the system. Most marketers assess the content creation costs of the email marketing and possibly new landing pages. Each software platform has varying degrees of power and complexity for email triggers, forms, progressive profiling, lead scoring and reporting.

With the lower cost of simpler marketing automation platforms (like Genius and Pardot, for us), a company should expect to dedicate half of a full-time equivalent employee (FTE) to marketing automation support. For the more powerful, richer systems that have many more options (like Marketo or Eloqua), a company should dedicate a minimum of one full-time employee to marketing automation administration. In a larger enterprise organization, the care and feeding of marketing automation could require 3-5 employees.

What led to the decision to purchase marketing automation software?

At our previous SaaS company, we needed a way to manage our sales and marketing processes and nurture leads instead of pushing generic messaging to prospects who may or may not have been ready to buy. Investing in marketing automation was crucial to engaging with prospects in all stages of the sales funnel and delivering the hottest leads to our sales team.

What marketing objectives did this product meet for your organization or fail to meet for your organization?

Pardot allowed us to segment our database effectively so that we could deliver relevant content to our prospects, track our contacts' activity on our website, score leads and deliver hot prospects to our sales team.

The drawbacks were that Pardot required ramp up time to implement, continual training was needed, building emails and campaigns required extensive knowledge and it was quite expensive.

Did you get a return on investment?

We've seen great ROI with marketing automation. The big payoff is integrating CRM and email marketing into one system in order to segment, target and increase relevance, thus elevating engagement rates.

Would you recommend marketing automation software to other businesses?

Marketing automation can add tremendous value to business owners, marketers and sales leaders by automating administrative work, freeing up time to focus on activities that impact revenue and delivering relevant messaging to prospects. Thus, increasing engagement with your company, as well as providing customer and prospect data that improves decision-making, and filling the sales funnel so that prospects who are ready to buy can be easily identified and engaged with, while those who aren't ready to buy can be nurtured until their need arises.