With all of the economic and competitive pressures they face today, many businesses are turning to customer relationship management as a tool to acquire and retain profitable customers. Since the cost of acquiring new customers is nearly five times that of retaining existing ones, these organizations recognize that sound CRM strategies can have a significant bottom-line impact.
Marketing automation is a critical component of any CRM strategy. Marketing automation applications segment and analyze customers based on demographic, transaction and other data captured from multiple customer interaction touch points. An applicationâs campaign management component then uses these data to design, execute and measure marketing campaigns that effectively target products at customersâbased on comprehensive knowledge of the customersâ needs and preferences.
Developing strategies and investing in solutions for marketing automation can help your organization solve several business challenges, such as accelerating customer acquisition, increasing customer retention, refining marketing strategies in real time and reducing cost.
But a marketing automation solution can deliver top-line growth and provide a rapid return on investment only if it combines analytics and campaign management capabilities. Youâll need both types of capabilities to effectively identify your profitable customers and design campaigns to target them. The system must also capture and use the results of campaigns to fine-tune future initiatives.
To choose the right marketing automation solution, you must identify your priorities. Some marketing automation vendors focus on analytics, while others focus on campaign management; still others claim to do both. With this variability in product focus, choosing the right solution to meet your organizationâs specific goals can be challenging.
Looking at solutions that are readily available, weâve found that most products struggle to provide a full marketing automation suite. Many products reflect their heritage in marketing analytics or in campaign management but have difficulty combining both capabilities within a single suite.
Also, many productsâ "real-time" analysis and "decisioning" capabilities are immature. Most solutions use batch uploads and donât really capture and analyze data in real time. These capabilities generally are focused on the Web channel and not on customer service.
Many existing solutions also lack enhanced closed-loop campaign and analytics integration. Often they capture customer data and perform sophisticated modeling, segmentation and forecasting, with the goal of using the data to drive campaigns. However, some solutions cannot effectively feed campaign results back into analytic applications to enable true closed-loop ROI analysis for campaign design and response measurement.
Meanwhile, demand for integration with content management and enterprise application integration solutions continues to grow. Organizations seek solutions that integrate with enterprise content management (ECM) to support content used in all their marketing campaigns. These solutions also need to support enterprise application integration (EAI) components to gain access to back-office systems.
Therefore, before implementing any marketing automation solution, itâs essential to:â¢ Determine your strategic goals. Marketing automation implementations are most successful when they are directly linked to key business goals and when they can support the measurement of those goals.â¢ Complete a marketing automation gap analysis. Most organizations already have some components of marketing automation, such as a data warehouse or modeling and reporting tools. Determine if you are leveraging those components to their full potential, then identify gaps where you may need to implement other solutions. â¢ Develop a comprehensive customer data strategy. A marketing automation solution is only successful when it leverages a well-designed customer data strategy. This strategy should include a core customer data profile, and this should be supported by a comprehensive approach for capturing all forms of customer data from internal systems and all customer channels, including customer service and sales staff, as well as partners and suppliers.
While it may take time to execute these activities, they can result in significant long-term rewards. Implementing the right marketing automation solutionâone that effectively reduces costs, streamlines and refines your marketing functions and aligns with your overall business strategiesâmay be one of the best investments your organization makes. This is especially important in todayâs struggling economy, where every customer counts toward the bottom line.
Gaurav Vermais a senior analyst with Doculabs (www.doculabs.com), a research and consulting firm. He can be reached at [email protected]