Tuesday, October 15, 2013

Marketing Automation's Unhappy Users: Trouble in Paradise?

As I mentioned in last week's post, I’m writing a paper on stages of marketing automation deployment. Key findings will be presented in a Webinar next Thursday, sponsored by TreeHouse Interactive; you can register here. The paper itself will be available to Webinar attendees.

The premise of the paper and Webinar is marketing automation has a problem: clients who don’t move beyond basic email functions are unhappy. Last week’s post provided statistics that show how many marketers fail to make this transition, but it didn’t actually show why this matters. So let’s look at some more data that illustrates the trouble in marketing automation paradise.

First we’ll start with the paradise itself: B2B marketing automation has indeed been growing quickly, at about 50% per year over the past few years according to my estimates.  I do expect that to slow somewhat in 2014 as the core market of tech companies approaches saturation and adoption in other industries remains spotty. The great hope is that acquisitions by Oracle, Salesforce.com, Adobe, and other big software vendors finally push the industry across this classic Geoffrey Moore chasm from the beachhead niche to mainstream users, but that’s by no means certain to happen.

If and when that growth does occur, it will be fueled by positive experiences of previous users. But the news on that front is mixed: a survey by one of the industry’s best analysts, Jim Lenskold, found 60% of marketing automation users reporting increases in the key value measures of lead quantity and quality. That’s a happy majority, but it also means that about 30% found no improvement or even a decline.

Questions about satisfaction give a similarly ambiguous result: just over two-thirds of users in a Winsper Group survey reported themselves satisfied with the business value of their system, again meaning that nearly one-third were neutral or actively dissatisfied.

Even more scary (and just in time for Halloween, if you're still looking for a costume): yet another survey, this by Holger Schulze, found that 31% of current marketing automation users anticipate changing their system within the next two years, nearly always because they want better or different capabilities.

Although these figures come from different sources, they all point to the same conclusion: about 30% of marketing automation users are not happy with their systems. The Schulze survey suggests that most believe a different system will give them better results, so they’re not yet ready to give up on marketing automation entirely.

But will those users really do any better with a different product? I’d be the last person to say that all marketing automation systems are the same, but it's also true that the vast majority of systems purchased have all the functions needed to run a successful marketing program. Some fraction of users really did buy the wrong product, but I’ve no doubt that most have problems due to flawed deployment.

One final survey reinforces this point. This one, from BtoB Online, found that just 26% of users had fully deployed their system – and nearly 40% had only some or moderate adoption.

I’d guess that the dissatisfied users in the earlier surveys are concentrated in the low deployment groups in this survey.  But if that’s true, those marketers are abandoning their systems before giving them a real chance. The BtoB survey does show that strong and complete adoption have increased considerably from 2012 to 2013, which is good news.  It also shows that full adoption will double next year, which would be even better news if it happened – but those figures probably reflect aspirations more than reality.

All of this brings us back to where we started: rather than blaming their tools, marketers need to work harder at ensuring full deployment of the systems they’re already purchased. Join me at next week’s Webinar for a roadmap to making this happen.


Adam Covati said...

Interesting analysis, David. I wonder how this ~30% rate compares to the satisfaction scores for Email Service Providers - I'd wager it's not terribly worse. So while it doesn't bode well, I'm not sure the industry is in a tailspin at this point.

I think you're right about the biggest problem - users just aren't leveraging the power of the systems they have. As always the grass is greener somewhere else, even if the feature set really isn't that different.

David Raab said...

Hi Adam. I'd love to see comparative figures as well. But I suspect that more than 60% feel their email vendor delivers measurable value, even though they might be unhappy with them for one reason or another. I just took a quick skim through my research files and haven't found a study that directly addressed the question, but am pretty sure I've seen research showing that marketing automation comes up as a pretty low priority compared with other types of marketing investments -- again, suggesting that the value is less clear.

Unknown said...

Thanks for the post David, fascinating. I wonder what the future holds: will marketing automation die out, slow down or stagnate? Is it a matter of every tool being too 'feature rich' or complex such that users can't get the mix of exactly what they feel they want. Every system promises to do the 'lot' when it (realistically) simply cannot.

pm2662 said...

Good summary David. Am wondering what the biggest hangups are in the dissatisfaction. I could take educated guesses- lack of content strategy- lack of understanding scoring models, or lack of good segmented lists,

David Raab said...

Thanks Chris and pm2662 (can I call you pm?). I'm pretty sure the biggest complaint is that systems are too hard to use, which I interpret as the result of inadequate training: it's true that the systems are not easy, especially once you get to complicated program designs and lead scores, but skilled users can certainly do what's needed. Remember that 30% dissatisfaction implies 70% satisfaction, more or less, so there are plenty of people who have managed to get these things to work. There is probably still a bit of over-selling by vendors who make things sound easier than they actually are, although the vendors are also keenly aware of underutilization and work very hard on educating their clients.

I don't think marketing automation will die out, simply because it provides such a useful collection of functions. The big question in my mind is whether it will expand beyond its beachhead in tech marketing to a larger universe. Bear in mind that we're talking B2B marketing automation here; the B2C systems are widely adopted in industries like retail, financial services, communications and travel -- so it's unrealistic for the B2B vendors to seek growth in that direction.

Unknown said...

The results aren't surprising with the 30%. I would imagine that's on-par or even better than CRM satisfaction.

A huge part of the problem, in my opinion, is that marketing execs oversell MA; don't invest in properly designing a demand generation strategy; don't train the people properly; don't collaborate with Sales; don't know how to measure effectiveness; and don't develop enough content to fuel demand gen campaigns. Marketing execs aren't as geared for that - yet. But I do see how they are getting better as they realize that marketing automation really can't "automate" marketing.


Laxman Rajagopalan said...

Very interesting analysis, David. 30% dis-satisfaction level with MA is quite high and it would be interesting to find out why?

I have seen a few deployments of MA and it is by no means easy. Further, MA is a tool suite that needs to be managed by a dedicated resource (at the very least) to get more value out of the tool. Further, valid leads also need to be piped to CRM for best results.

I would imagine that when companies compute the ROI (spend vs sales), they perhaps come up short. That could be one reason for the dis-satisfaction.

David Raab said...

Hi Laxman. Yes, I think much of the dissatisfaction is due to the difficulty of deployment. I'll be adding another post this week with some data that supports this view.