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Q&A with Laura Ramos of Forrester Research – Part 2: Market Momentum

Thursday, March 4th, 2010

Following up on my post last week, I am releasing the second part of my interview with Laura Ramos of Forrester Research (blog).

Part 2:  Market Momentum

4.    Dwyer:  What key trends drive adoption of Lead Management Automation (LMA) today?

Ramos:  Besides the economy and the need to improve sales pipelines short term, I think there are 3 more systemic changes driving lead management automation investment and use. These are: 1) the need for greater marketing accountability, 2) the need to produce not just more demand, but better qualified demand, and 3) the need to scale the sales process more efficiently (another way of putting this is reducing the cost of customer acquisition).  There are a number of macro trends driving widespread change in B2B marketing, where I see automated demand management as a key response to these trends. In short, I expect marketers to adopt lead management automation to build customer dialogue and relationships much earlier in the purchase process and counteract issues like advertising avoidance, commoditization, and social computing (which creates unprecedented transparency and information sharing that is wonderful for buyers, but challenging for sellers).

5.    Dwyer:  What impact will a Lead Management Automation (LMA) system have on the typical marketing organization?

Ramos:  I think the impact of automation on a large marketing organization can be quite different than the impact for a small one.  Both experience different issues and challenges. Let me focus on the midmarket here and refer to the three trends I mentioned in the prior question to address the question of impact:

1) Greater marketing accountability. Over the past 10 years, B2B marketers have witnessed an explosion in available marketing approaches, especially in the digital world. While this has made more channels available, many marketers struggle to execute tactics in an integrated fashion that engage B2B buyers during what is often a lengthy sales cycle. Running from tactic to tactic, B2B marketers can also fail to demonstrate marketing’s impact beyond the point of campaign execution. Lead management automation helps marketers get a handle on the marketing mix and to learn which approaches work at which points in the buyer’s journey. LMA can also give marketers more flexibility to try new approaches and experiment with new techniques because the system lets them see, more directly, the impact between marketing activity and the volume and quality of leads that result.

2) Better qualified leads. Sales doesn’t really want more leads from marketing, but they do want better ones. Lead management automation helps marketing and sales get onto the same page and to answer the critical question “what makes a great lead?” Without automation to score leads across the purchase cycle, and the capability to nurture leads – start a conversation, educate, build dialogue, persuade – marketers will fail to put the best leads in front of sales and to help sales to convert pipeline into closed deals.

3) Scaling the sales process. Many executives think LMA helps marketing.  In fact, it helps sales. And it helps the bottomline.  Starting in the last decade, trends like software as a service, virtualization, and on-demand provisioning have changed how firms deliver high technology products. The services component of any solution has become more important. And IT buyers want to pay as they go. Long-term, on-premise, perpetual licenses will decline in favor of the on-demand model.  This also means that long sales processes, backed by high-commission sales reps, must become less expensive. Marketing will become key in this transition as buyers rely more on online channels – and communities of like-minded participants – to inform and validate purchase decisions. Lead management automation can help marketers connect with these buyers long before the first sales call and make selling more efficient as a result.

I think large, multinational firms can certainly achieve these results at the departmental level.  However, the challenges associated with building a global brand, driving message consistency, and managing marketing interactions across geographies, regions, industries, and multiple product lines increases demand management complexity significantly.

6.    Dwyer:  Are you seeing a shift in focus from traditional outbound marketing activities to inbound marketing? If so, how can marketing leaders prepare themselves?

Ramos:  In 2009, we saw B2B marketers shift from traditional to digital channels in a big way as marketing budgets got the ax and as buyers became harder to engage.  Social media popularity also accelerated the digital transformation.  However, much of what I see happening online in B2B – with social media in particular – I would characterize as “outbound marketing using new channels.” For example, firms put out a stream of press releases and marketing communications, and then tweet about them on Twitter.  Little value is added and certainly not much happening there to make buyers want to strike up a conversation.

To truly move to inbound marketing, B2B marketers need to stop thinking about campaigns and start thinking about multi-step conversations.  They need to efficiently reach buyers at a group or individual level. Mass marketing doesn’t work in B2B, relationship marketing does. This is where I can see LMA playing a key role because lets vertical industry, product management, or local marketers in the field have conversations with targeted groups of prospects – customer segments in the truest sense – using online tools and social media to fuel the dialogue.  By tracking their behavior and interactions, marketers can then pass a rich set of “background” information – behavior, preferences, activity — to sales and help them close deals more efficiently.  When this doesn’t work, because it doesn’t always, the LMA system can now give both marketing and sales quantitative, factual information about what they need to do differently.

Next up, Part 3:  Selection Criteria & Process

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Q&A with Laura Ramos of Forrester Research – Part 1: Defining the Market

Wednesday, February 24th, 2010

Without question, Laura Ramos of Forrester Research (blog) is an expert in the marketing automation space with a specific focus on the best practices in lead management.  While I did not actually meet Laura in person until late 2009, I have certainly known that she is a thought leader in the industry.  I have enjoyed getting to know her over the past few months and I think Laura has become more familiar with what Loopfuse has to offer B2B marketers, especially in the product releases that Loopfuse has made in late 2009.

As Laura and I recently discussed, one of the challenges to Lead Management Automation adoption is education in the marketplace.  So I asked Laura if she would be willing to answer a handful of questions for me about the market and talk about what she sees happening in 2010.  So I sat down with Laura a few weeks ago for a quick chat and today we are releasing the first part of our interview:

Part 1:  “Defining the Market”

1.    Dwyer:  The term Marketing Automation is thrown around internally at companies and in the marketing media, how do you define Marketing Automation?

Ramos:  As part of Forrester’s research team that serves the marketing professional, I agree that the term Marketing Automation is bandied about ambiguously. To help marketers use technology to improve marketing effectiveness and efficiency, Forrester writes about the Marketing Technology Backbone.  It’s a term we have used since 2004, defined as, “A technology infrastructure that supports an integrated, quantitative approach to marketing strategy, development, delivery, and measurement — across the marketing mix.”  This definition helps to keep marketers focused on the entire discipline of marketing and not just on technology for executing tactics and campaigns. It also includes two important words, integrated and quantitative, because I see B2B marketers worry too much about running programs and not enough time connecting the dots between marketing activity and bottomline business results.

Looking at the marketing technology landscape, Forrester sees marketing automation focus on six core applications: 1) campaign management; 2) customer analytics; 3) interaction management; 4) marketing resource management (MRM); 5) marketing asset management (MAM); and 6) lead management.  Lead management plays a key role in the marketing automation space and in our view of what marketers need to put an effective marketing technology backbone in place.

2.    Dwyer:  From a B2B perspective, when a direct salesforce is involved, what is the difference between Marketing Automation and Lead Management Automation?

Ramos:  In my research, I study and write about lead management automation specifically.  My counterpart, Suresh Vittal, writes about marketing automation generally. In B2B marketing, where a direct salesforce or channel partners sit in the driver’s seat for winning new deals and retaining existing customers, technology that manages demand is an essential part of the marketing technology backbone.  Wikipedia has a solid definition of lead management that I used to develop a working definition in my research.  In short, lead management is the tooling and processes that help firms generate new business opportunities, manage volumes of business inquiries, improve potential buyers’ propensity to purchase, and increase alignment between marketing activity and sales results. Increasingly this process is becoming tech-centric, and lead management automation is the technology that helps marketers to manage this process.  I would also point out, however, that technology alone is not sufficient and that automating ineffective, immature processes – especially those that lack a tight alignment between marketing and sales measured in the creation of more qualified opportunities and closed sales — will likely cause more problems than it solves.

3.    Dwyer:  Is Lead Management Automation (LMA) a term that is catching on in mainstream business?

Ramos:  I would like to see it catch on more than it has. The 2009 recession, which appears to be experiencing a slow recovery in 2010, forced many firms to concentrate on demand generation as business investment was deferred, delayed, or shrank. The down economy benefited lead management solution providers as marketers invested in LMA technology to get sales pipelines pumping again. Despite this trend, lead management automation is still an emerging industry category. Today, LMA has yet to emerge as a separate, distinct category from Marketing Automation.  Based on our estimates, I see market penetration growing from 5% to 10% over the next 18 to 24 months – but there are many marketers out there who have yet to explore the value that lead management automation can bring to their organizations.  This can be both a blessing and a burden to firms like Loopfuse who look to grow their share in this emerging space.

Stay tuned for Part 2:  “Market Momentum” coming soon

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