Start the business case for marketing automation with savings, but complement it with revenue

A compelling business case for marketing automation software starts with savings and efficiencies but should also show revenue potential.

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When it's time to identify the worth of a marketing automation solution, many marketers stumble. They need to make a strong business case to upper management to justify the expense, the time, the shifts in processes and impacts on related areas of the organization. But if marketers try to make a business case solely with persuasive and positive words and images, they may be doomed to a polite rejection. With a good business case, revenue...

and tangible outcomes are king. In order to turn hazy plans into concrete new realities, marketers will have to follow the money.

Chicken before the egg?

"The challenge so often is there haven't been systems in place to track costs and understand costs that go into a particular campaign, so it's been hard to understand the cost side of the equation," said Kim Collins, Gartner's managing vice president of CRM and agenda manager for marketing and sales strategies, processes and technologies. "Once you start to automate, if you put in some marketing automation solutions, you can capture that more easily."

But it's not just freeing up some time with automation that will sell people on marketing automation.

"The harder problem comes with revenue," Collins said. "If I pass off a lead to the sales channel, sales wants to get all of that revenue credited to it -- and marketing doesn't necessarily get any credit for that sale. The same thing is true with the other channels. If I send a lead out through the contact center where telemarketing is being done, or if I send it out on a social channel, I might not be able to know if they actually became a client. It's hard to track, making revenue attribution models very difficult to understand with marketing."

What's the answer? While a marketing automation solution can help by giving an organization important data surrounding costs, it can also help identify and manage results as they are passed into other channels. A print advertising campaign, for example, may still be particularly difficult to track, but an email campaign or online event-triggered offer can more easily be credited to a marketing catalyst.

"It's all about being able to attribute value back to what marketing is doing," Collins explained, noting that marketers will need to puzzle out a reasonable equation or rules of thumb as they make their business case.

The upside of costs

"It's an easy sell for components like marketing resource management (MRM), where you can point out how much cost you can cut out, what level of productivity and throughput you can increase with it," Collins said.

That can be put into a fairly straightforward business case, but it's much harder to show the dollar value of improving the brand via sentiment analysis.

"What's the impact of the chatter out there, negative and positive," Collins asked. "It's very hard to come up with an attribution model for those areas."

The key takeaway here is that extra due diligence in nailing down cost savings and expectations can go a long way to justifying a marketing automation solution -- and in some cases, cost reduction and productivity gains can make the case all on their own.

Look for fast benefits

If a marketing team can reduce the time to deployment and put a solution to work faster, it can sometimes help spur executive approval. In this way, Software as a Service (SaaS) solutions can reduce the initial capital outlay and let an organization ease in with specific campaigns or efforts that may be able to show value more quickly than large-scale, big-bang rollouts.

"Some are focusing on total cost of ownership (TCO) and time to benefit -- these have always been important and have made the SaaS model pretty compelling," said Warren Wilson, research director for Ovum. "You have no up-front costs for hardware or licenses, no software to install or maintain, and rapid time to benefit -- import your data and you’re good to go."

Also, the recession has served to make those features more compelling.

"Still, many companies continue to prefer the security of having their apps on-premise, and if they have the resources -- financial and human -- they often choose that route," Wilson said.

Gartner's Collins is seeing similar sentiment for quick returns. With a faster deployment option, she said, marketing organizations can push a business case forward if they focus first on the near future.

"Identify, in the first year, the two or three things you want to do with the system," she recommends, "and know that in the second year, it'll be used for many more things, and the value will go up."

A shortlist for action

According to Ray Wang, partner of enterprise strategy for San Mateo, Calif.-based Altimeter Group, many business cases can be less intimidating and can be tackled if you turn your attention to a few key areas:

•  Focus on the expected outcomes. "Are you seeking to improve reach per dollar? Can every dollar shifted from analog to digital raise the impact -- and by how much?" Wang asked.

•  Streamline the key processes. "Take the commoditized processes and automate," he said, noting that lead management and lead qualifications should be automated with rules. Similarly, budgeting and forecasting should be streamlined and more collaborative.

•  Don't be afraid to use a manual solution. "Sometimes, you can't automate a process," Wang explained.

 "Remember that marketing is still an art,” he said. “But it's more credible with some numbers.”

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