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White Paper By Ari Buchwald 2001

What is Marketing Automation?

Marketing Automation (MA) is a relatively new classification of tools found in the marketers’ arsenal. Developed from new rapidly evolving technology, and based on tried and true best practices, MA tools mechanize the processes and decision-making efforts of the marketer.

Simply stated, Marketing Automation tools streamline and manage functionality such as customer and prospect related messaging, promotions, contacts and analysis. The level of complexity involved in Marketing Automation comes into play as these tools manage those functions across all channels and points of contact, including email, direct mail, call centers, the Internet and retail point of sale (POS).

Marketing Automation tools are built to capitalize on information collected in Database Marketing initiatives (DBM) to create a more robust and complete marketing system. This in turn helps automate the advertising process by developing and tracking marketing workflow.

Areas that benefit from routinization and automation include marketing plans, timelines and approvals, budgets and marketing inventories, collaboration with third parties such as creative agencies and content management for both promotional marketing and websites.

Where does Marketing Automation fit within the organization?

Marketing Automation tools are built on DBM platforms and exponentially increase the effectiveness of the promotion process. Marketing Automation is sometimes seen as the first step in moving from DBM and a marketing focus to customer relationship management (CRM).

Marketing Automation tools integrate with other operational software and data silos to give the marketer a better picture of the customer, their preferences and their performance. Implementation though, needs to be planned with a greater picture in mind. As companies make steps toward CRM, Marketing Automation must fall into place along the way as opposed to becoming confused with the end strategy. It is critical that enterprises consider the place of marketing in planning their CRM efforts and it’s impact on data planning processes, just as technology should not be confused with strategy.

Where does Marketing Automation fit in a CRM system?

Marketing Automation is a key component in executing CRM strategies; along with Sales Force Automation (SFA) and Contact Center management. We cannot discuss Marketing Automation without acknowledging Customer Relationship Management, since the goals of both are reciprocal:

  • Maximize the value of the business to the customer and;
  • Maximize the value of each customer to the business

A few things that differentiate CRM and Database Marketing DBM focuses on programs and promotions instead of products or customers. DBM is marketing specific and uses channels such as direct mail and email to deliver promotional messages and measure their effectiveness. While CRM is not department or function-specific, it does span all customer interactions including sales, service and marketing. CRM utilizes all channels and media to turn the focus from the product to the customer.

What do Marketing Automation Tools do?

While there are no complete Marketing Automation tools today, suites of software work together to provide automation and robust functionality.

Marketing Automation suites help “keep everything in one place” for the marketing practitioner. Software suites and tools utilize databases of marketing oriented information to capitalize on knowledge gained from previous work and encourage collaboration within large, diverse marketing departments. By maintaining promotional libraries, the software can store and reference a diverse set of functions and metrics such as promotions and their characteristics, graphics (scanned images, maps, products), financials and historical performance, response curves, reporting and calculations such as life time value (LTV) and return on investment (ROI).

Effective tools will also link characteristics of promotions to product sales and customer characteristics and behaviors dynamically. Some packages will integrate with other operational systems such as inventory and the eCommerce system to manage these functions in real time. By capitalizing on new technology and open systems programming, the savvy marketer can depart from ineffective toolsets that relied on batch updates to provide delayed snapshots of the customer or promotional response.

MA tools make marketing easier by integrating suites with vital functionality, such as marketing calculators, user prompts, integrated help or dashboards that offer tips and tutorials.

No one probably has to remind you that today’s marketer places a greater focus on measurement. A key advantage of newer tools is the ability to expedite metrics use to make evident what’s working and what doesn’t in a given marketing plan, calendar or campaign. While this is key to proper automation, tools need to make the analysis more intuitive and avoid sending users into a state of analysis paralysis. Like it or not, we are moving away from the assumption that everyone wants or needs to “mine” the data. Hence, there is a definite tradeoff between sophistication and ease-of-use that must be considered when reviewing functionality. Challenges Many organizations have not even begun planning their CRM and Marketing Automation efforts. Why is this the case?

There may be a multitude of reasons, but are primarily due to one or many of the following:

  • Costs – Technology is big business and requires a big investment. While there are many quick wins that a company can implement on the road to CRM or Marketing Automation, the technology to manage an enterprise wide solution can be costly in terms of hardware, manpower and education. A partial to full marketing automation systems requires significant investments while paradigm or procedure changes barely register on the accounting books. A business looking to automate marketing processes may spend upwards of a quarter of a million dollars to get started, and may quickly watch that initial investment rise once operating, maintenance and consulting fees are included.
  • Data and system challenges – Many large organizations have disparate legacy systems that house incomplete customer-level data and lack the functionality to be integrated in order to offer an accurate global picture of the customer. While many of the Marketing Automation suites that serve the marketplace offer varying degrees of scalability, integration and sophistication, there currently are no true off-the-shelf, out-of-the-box solutions.
  • Internal resistance – All departments must buy into the same view of the project as well as the customer. Most organizations face the common challenge of managing their internal structure, budgets and related “ownership” issues.
  • Overall confusion – There is an overabundance of software application tools on the marketplace. Some of these sophisticated tools offer a multitude of features that claim to solve all the world’s problems, but in actuality, only result in mass confusion. To add to the bewilderment surrounding the proliferation of software solution providers and what they have to offer, experts disagree on the very definitions of what CRM and Marketing Automation actually are. If you ask ten industry leaders what these terms mean to them, you will be guaranteed to receive ten different answers.


There are tremendous benefits that Marketing Automation/CRM tools bring to the table. By automating processes, these tools make marketing easier and facilitate implementation of more sophisticated campaigns. MA tools also allow the marketer to perform analyses that are increasingly dependent on model scores and forecasted propensities automatically rather than incorporating elaborate strings of selection criteria.

Marketing Automation allows the marketer to take a campaign or the campaign process into a larger perspective by efficiently managing all marketing as a broader CRM effort. For example, all customer interactions could be tracked regardless of whether they were initiated on-line or offline. Some software providers even now claim that they can integrate all channels for real-time receipt, analysis and delivery of offers and messages.

Trends and the Future – Self Service, Automation and Customization

It is important to note that CRM in itself is an approach and an ideal, not a technology. That being said, no out-of-the-box solutions exist that allow a company to jump right in to CRM or Marketing Automation.

When choosing a tool, we cannot stress enough the importance of the customer experience and it’s effect on data planning. Vendors are moving toward the big box approach by creating systems that are open architecture, support for movement of data in and out of processes in up-to real-time environments, flexible business rules, increased scalability of solutions, the ability to handle multiple inputs, and built decision support/mining/modeling techniques to make near real-time touch point decisions.

The trend that we are seeing in integration of systems is to allow monitoring and movement horizontally among departments and touch points, rather than the old methods of utilizing vertical, batch procedures. As software developers embrace technologies like ASPs, XML and ODBC, we will find ourselves moving toward big out-of-the box solutions. Also, these solutions will eventually be scaled down and served in suites to mid and small sized businesses.

Organizations are also investing in customer “self-service” applications, moving from manipulating outbound efforts to inbound marketing. In turn, overall efficiencies are realized, resulting in an increase in overall customer satisfaction, greater market share and increased profitability. Vertical and market-specific applications are also available which allows for industry specific customization.

Other benefits include the ability to shift away from one-way campaign management to interactive contact management. This collaborative approach allows an organization to blur the transition between campaign and contact management by listening, learning and remembering each customer via multiple customer contact touch-points. Systems can be trigger-based, which automate targeting and scheduling. This allows the marketer to target the customer by channel preferences rather than the product or campaign triggered selections.

Today’s contact points are more sophisticated, so the data flowing into MA suites and the decisioning performed can be more pertinent. Using the power of these tools, point-of- sale and loyalty systems can provide relevant real time purchasing information and sales- force automation tools can keep the sales force effective by eliminating redundancy. Call/service centers can minimize the duration of calls, solve problems quickly and empower their representatives to up-sell or cross-sell additional services. Wireless solutions can also be integrated as yet another channel for two-way communications as the industry matures.

Marketers will not only have to target the right message to the right customer at the right time, but will have to target the right channel. In order to do this effectively, organizations will have to make a concerted effort to invest in data collection, begin to learn about customer contact touch-points, build a foundation of customer intelligence and collaborate with others who own touch-point solutions.

What is the key for the savvy marketer? Do not wait for the technology to stabilize and the market to shake out, because progress doesn’t stop and your competition won’t wait!

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