Wednesday, March 25, 2009

Should Demand Generation and Sales Automation Be Separate Systems?

I’ve been focusing (obsessing?) recently on the idea that the boundaries between marketing and sales are breaking down because leads now interact with both departments throughout the purchase cycle. This is clearly inevitable: if nothing else, leads still visit your Web site (controlled by marketing) even after they are “turned over” to sales. More fundamentally, the very idea of a lead being “turned over” is now obsolete: today the buyers are in control; neither department ever owns them in the first place.

The sheer volume of interactions also means that sales can’t cost-effectively handle every contact, even for the highest-priority individuals. Rather, salespeople must focus on what only they can do – provide nuanced, personal service – and delegate other tasks to resources that can handle them more cheaply and often more quickly. In many cases, those resources will be automated systems that are run by marketing. (Yes, sales could duplicate those systems for itself. But buyers would still sometimes enter through marketing-run channels, so marketing and sales would still need to coordinate. Remember, the buyer is in control.)

The immediate implication of this is that marketing and sales must work together to ensure that every lead is treated appropriately in both marketing and sales systems. Today, this is accomplished by synchronizing data between demand generation and sales automation systems. But that is inherently complex. The obvious (or perhaps simple-minded) solution is to skip the synchronization and have marketing and sales work on one shared system.

This isn’t a new idea: indeed, “marketing, sales and service” have long been the three components of Customer Relationship Management products. But marketing was always the weakest link, and, typically, was pretty much separate when you looked under the hood. There was a sound technical reason for this: sales and service are operational systems with a transactional data architecture, while marketing databases are structured for analysis. But this distinction is less important given the power of modern databases, particularly at the relatively low volumes of most business-to-business marketers.

In fact, the division between demand generation and sales automation today is probably more a reflection of organizational divisions than technical imperatives. But as the two departments become more intertwined, this will increasingly be an anachronism that presents an obstacle to success.

So are independent demand generation systems doomed to be assimilated into larger CRM products? If so, the obvious but unspoken threat looming over the industry (“the elephant in the room of Damocles”) was always, which is the main data source for most demand generation products. That particular, um, shoe may have dropped, according to a BNET article yesterday from Michael Hickins (Marketing Automation Next For

Whether would really do this, how quickly they would move, and whether they would build or buy are all intriguing questions. But regardless of what does in the short term, it's worth asking whether independent demand generation systems really have a long-term future.


Adam B. Needles said...

Great thoughts/questions, David.

I actually think the future is for demand-gen/lead nuturting, marketing automation/EMM, marketing content management, CRM and sales-force automation to live as a converged vision of integrated marketing management that is marketing led.

The question in my mind is which 'camp' will own this space. I think there are a lot of reasons why demand-gen vendors, as they become more comprehensive, have a real leadership claim. But I can also see advanced CRM creeping 'up the stack' and really expanding the footprint.

Regardless, I'm glad the focus is now on fixing the marketing systems problem ... which in my mind is the historic problem of less-than-robust marketing systems. The benefit of our current evolution in my mind is more-robust marketing systems and a shift towards corporations complementing their ERP/supply-chain/product-centric systems with holistic customer/demand-centric systems driven by marketing.

David Raab said...

Thanks Adam. I think you hit the nail on the head: one constellation of "product centric" systems and another of "demand centric" (or, I prefer, "customer centric") systems. Exactly how pieces are wired together within each constellation will vary considerably. (Well, I guess constellations aren't really "wired together". Need a new metaphor.)

Anonymous said...

I love the concept of customer-centric systems. But what I really think we're discussing is "What is the role of marketing in a complex sales environment?"

We're beginning to see our role more as a "router" of information to the best party to respond. To your point David, if an existing client comes to our website, or downloads a whitepaper, that's valuable information that needs to go directly to the "account owner." If a "close-in prospect" comes to our website - that information needs to go to the salesperson working the account. If a "new" prospect comes to our website - that information needs to go to our telemarketing staff (once their lead score rises to the point of justifying an expensive telemarketing call.)

Ultimately, I don't care where the data resides - I just want it to get to the best person to act on it. So the functionality that I see missing in a lot of these systems is sophisticated routing rules. We hear from our sales reps "Telemarketing can call Joe, but not Sue." Or, "Telemarketing can call IT since I have no relationships there, but don't call into Finance as I work with them a lot." I have not found a tool that does this well. Have you? I'd love your thoughts on this.

David Raab said...

Yes, I quite agree with the idea of a routing function to treat the same contact (a Web visit) depending on the person. I don't know how hard it would be to find a system for the routing: most demand gen products have an alert function that seems similar, and higher end marketing automation products have interaction managers that should also do it. But there might be nuances to consider that I'm overlooking. Interesting question.