Understanding Marketing Automation — Part 1.
In a fast rising digital world, businesses constantly seek ways to achieve the most within the shortest possible time. And to achieve this, there has to be less involvement of human interaction in their processes. In Tim Ferris' DEAL approach from his book ‘4-hour work week’, we were made to understand that Automation is an important part of any process. The ability to put systems on autopilot in order to reduce manual/human interaction, save time and cost and get the best result possible.
What then is Marketing Automation?
Marketing Automation is the process of delivering personalized messages to your customers at the right time using software in order to attract, convert and retain more customers with fewer resources more efficiently. This definition answers the questions What, Where, When, How, Who and Why.
Myths about Marketing Automation.
There are some common misconceptions about what marketing automation entails.
- Marketing Automation is about email automation only - marketing automation is not done for email only, there are other marketing channels you can automate your processes on. Examples of such channels are push, SMS, Social media, Google and Facebook ads.
- Marketing Automation benefits marketing only — This is false because good automation should ultimately improve your bottom line. For a Saas company, a good automated process should increase their MRR (monthly recurring revenue) and CLTV (customer lifetime value). Provided they stick to this objective, automation will have them see improvement across all departments.
- Marketing Automation should be done once and forgotten — this is another wrong notion. Automation is a continuous process. As long as you measure your marketing efforts, metrics like email subscribers, visitors, clicks, conversions etc should tell you if your message is well received and if it should be improved on. You should use the Build - Measure - Learn loop to execute and iterate your marketing automation strategy.
Is Marketing Automation right for you?
Marketing Automation is beneficial to any business process. The question should be how much automation do you need as a business?. The answer to this question depends on your ACV (average customers value). The rule of thumb is that;
The higher your ACV, the lesser amount of automation you’ll need as a business and vice versa.
Let’s take a close look at the image above.
WhatsApp is a company valued in billions of dollars and earns $1 per download on iOS, it is easy to see how low their ACV is, hence the reason they invest heavily on automations.
Palantir on the bottom left of the graph is a Big Data analytics brand for top companies also valued in billions of dollars. Their clients include Ferrari, Airbus and the FBI. It is also easy to see that they don’t close deals through some automated mails, they do it on dinner tables breaking bread and sipping wine — high ACV, low automation.
Benefits of Marketing Automation
According to a research by email Monday, 70% of people finds improved targeting of message to be the most important benefit of marketing automation.
As a business, you should seek to perfectly strike a balance between employing both marketing automation and manual processes in your marketing and sales.
Is Marketing Automation right for you? — Yes!, if scalable, personalized marketing campaigns aimed at the right users at the right time will improve your bottom line, then take automation seriously.