Undo the Catch-22: Why manufacturers need marketing automation

Getting budget approved for marketing automation is tough because executives normally don't want to invest more in a department they perceive to be a cost center. But as tradeshows and mass advertising lose their effectiveness, marketers must put dollars into technology that will drive more results. The trick is to fund the project out of the existing marketing budget—bypassing a lengthy approval process—to demonstrate results that justify continued investment.

By Jon Miller, Marketo October 22, 2008

Most manufacturers know about automating processes such as product life-cycle management and design, and understand the importance of technology support for human resources, supply chain, and accounting. Yet most have not yet applied the same rigor and measurability to their marketing departments, and as a result are not prepared for the dramatic changes affecting how companies meet and develop relationships with prospective customers.

Marketing transformation The Internet has forever changed the way we interact with and market to customers. Web sites, email, and Google are just a few examples. You won’t find any of these tactics referenced in classic marketing textbooks from just a handful of years ago, yet they can’t be ignored since they’re changing the way buyers find and research solutions. It used to be that the only way a prospect could learn about the specifications for and details of your products was to speak with a sales representative.

Today, however, buyers use your Web site—as well as third party sites and social networks—to learn more about your solution, your pricing, and your competitive strengths and weaknesses before speaking with a sales rep. This means there is a chasm of weeks, months, or even years between the time someone begins considering a purchase and when it makes sense for sales to get involved in the account. At the best companies, the role of marketing is changing as they step up to fill this gap by nurturing leads that are “not yet ready for prime time.”

Another fundamental change is the growing call for marketing accountability. Marketing is a significant expense for many companies, but unlike sales and support, traditional marketing expenses are loosely structured and hard to tie to revenue—which is why many executives think of marketing as a cost center, not an investment. And that makes marketing budgets hard to justify.

Enter marketing automation

These two transformations—the changing role of marketing in lead generation, and the growing need to demonstrate marketing accountability—are incredibly difficult without technology support. These modern techniques are much more data and process intensive, and without the right tools to automate the planning, execution, and measurement, even the hardest-working marketer can be overwhelmed by the complexity.

Fortunately, there are now marketing automation solutions designed for the complex sales cycles of the manufacturing industry. These use technology to automate marketing processes, provide best practices, and improve the measurement and analysis of results. A report out of Stamford, Conn.-based Gartner Group , A Return to Growth Fuels Marketing Technology Spending , claims companies that invest in marketing automation will have a clear competitive advantage over those that do not, grow revenue faster, and cut costs significantly.

However, marketers have traditionally had a difficult time getting budget approved for marketing automation. There is rarely extra budget, and it is notoriously difficult to get executives to invest more in a department they perceive to be a cost center. This creates a Catch-22: to be seen as a revenue generator, marketing needs to invest in technology, but marketing needs to be perceived as a revenue generator to get the budget to invest in technology.

The answer is to allocate some of the existing marketing budget. The tradeoff is simple to understand—even though it can be difficult to act on. As traditional techniques such as tradeshows and mass advertising become less effective, marketers should invest some of those dollars in technology that will help them drive more revenue and demonstrate results. Funding the project out of the existing marketing budget eliminates the need for a lengthy approval process or justification. This allows marketing to break out of the Catch-22 and quickly demonstrate the results that will justify continued investment.

About the author:

Jon Miller is company VP for Marketo , a provider of sophisticated yet easy-to-use marketing automation software that automates lead management processes, including lead nurturing and lead scoring. His blog, Modern B2B Marketing , explores best practices in demand generation, lead management, and B2B online marketing.