Read an extract from RedEye’s whitepaper on B2C marketing automation

CRM is back and it’s now called marketing automation. Oracle are paying a cool $871 million, nine times 2012 revenues, to buy leading marketing automation provider Eloqua. Remember Oracle was one of the chief advocates of CRM in the 1990s.

So what’s going on? Digital marketing is maturing in a similar way to how offline marketing did in the 1990’s when CRM really took off. Digital marketers now want their own CRM platforms and marketing automation suppliers are fulfilling this need rather than traditional offline CRM providers. This is due to the nature of the data. Offline data is based on household name and address whereas online data is based around email address and cookie data. Offline data works well with just a daily update, online data is more real-time. The quality of the customer database depends on the accuracy of the data collection and deduplication process used. Similar to offline data there is a wide variation in digital data quality.

Marketing automation is the use of software to automate marketing processes such as customer segmentation and campaign management. The use of marketing automation makes processes that would otherwise have been performed manually much more efficient and makes new processes possible. However you can’t automate processes that have not been defined. And the better you understand your customer processes the better you can lead or pull your users through your website rather than trying to push them. Warm inbound marketing works better than cold outbound marketing.

Effective analytics is the key to unlock the door for relevant and profitable marketing communications. Without analytics you are flying blind. Analytics needs to be actionable and the difference between analytics reporting and actionable analytics is segmentation. Segmentation is the best way to make customer communications relevant. You always want to send the right offer to the right person at the right time using the right channel.

Channel segmentation is under-utilised. Well integrated marketing communications across different channels improve your campaign results. Different value customers can be serviced by the most appropriate channel. Integrated marketing campaigns work better, for example, TV support for a direct mail campaign when timed properly can generate a better response.

The number of different multi-channel campaign combinations quickly becomes unmanageable, hence the need for campaign management software. Campaign management software enables complex processes to be managed relatively easily. It is impossible to predict exactly how your marketing automation processes will develop. So it is more important to have a good idea of what processes will yield the greatest return rather than try to get everything going all at once. Start with the low hanging fruit such as cart abandonment email for quick returns that can justify future investment.

As always testing is key to improving results. The two most common approaches are A/B and multivariate testing (MVT). It is much easier to test an email subject line than the target audience even though testing different target audiences will be more effective. Marketing automation makes it easier to test the things that will make a difference.

Marketing automation faces many of the similar challenges CRM faced in the 1990s. Unclear objectives remain the most serious issue but is easily fixed with a bit of disciplined thinking. Data and organisational siloes are also barriers. Stakeholder analysis can help with organisational siloes. A new marketing automation database may be the most practical solution to the existing data siloes. However beware of trying to fix too many things at once.

Marketing automation is sometimes justified as a way to reduce headcount or cut expensive marketing initiatives. Our experience at RedEye is that the increased revenues are more important than cost savings, especially for B2C marketers. You should expect to see a doubling of revenues from email marketing activities due to better targeting. In addition the better targeting results in a halving of email volumes. This highlights why the normal volume pricing model for email marketing is really not suitable for marketing automation and why we tend not to use it.

The future of digital marketing is relevant communications. Relevance is achieved by better segmentation and targeting, plus personalisation using behavioural data. Marketing automation is not a magic bullet solution to marketing problems. However if implemented well with the right supplier marketing automation should at least double your email revenues, and that can make a real difference to many businessses.

This is an extract from the RedEye whitepaper The Fundamentals of B2C Marketing Automation for full version go to http://www.redeye.com/resources/the-fundamentals-of-b2c-marketing-automation-for-effective-marketing-communications-main/