CRM has become a core application for businesses and we have already seen that Sales Force Automation and Marketing Automation functions have been quickly incorporated along with Business Intelligence. All of these can use the same or linked tables to provide a 360 degree view of the sales and marketing process. However, today, we have finally come to a place where it should be easy enough for SMBs to plan and execute business strategy using a structured performance management system, like the Balanced Scorecard. Key Performance Indicators (KPIs) should be a standard part of the application architecture as should a meta-directory of KPIs that all applications can access. To measure the effectiveness of Sales, Marketing, Operations, and industry-specific activities, each area should have standard metrics and access to benchmark data that lets the SMB know how they are doing compared to peers, but rather than only using historical data it should be based on forward-looking objectives (leading indicators) that are tied directly or indirectly to activities designed to ultimately improve financial results. SMBs are seriously interested in measuring elusive objectives like Return on Marketing Investment, Optimal Pricing, Cost of Acquisition, Lifetime Customer Value. They want integrated applications that can not only measure these objectives but also be able to optimize effectively. This is what we call the Enterprise Performance Management (EPM).
For EPM applications to be really effective, they should be able to collect data from all applications and break into several areas; for people, productivity should be monitored through activity and results (as it already is in the new generation of SaaS applications), and effectiveness of software and equipment should be measured through algorithms that follow click paths, analyze application usage, optimize the process flow and usability of the systems. In some cases, like network optimization, filtering potential employees and ecommerce, systems should optimize themselves and human intervention should only be required when something is way outside the parameters defined by the administrator – who may increasingly be the LOB management.
With the EPM (Enterprise Performance Management) system SMBs will have a new attitude and culture that values and uses data visualization as the quickest way to gauge overall performance and specific areas of interest at a glance.
Most SMBs that have used CRM and ERP systems within the past few years are familiar with the dashboards that are available with many of these applications, either embedded or purchased separately. We believe that Dashboards will continue to evolve and be dynamic in several ways; the way they use data from subsystems like ecommerce and other real time feed sources, the way users can personalize the layout of their dashboards. Similarly, within the EPM, the actual KPIs should be dynamic and have the ability to build KPIs “on-the-fly” by calculating variables on the screen and saving the result in a meta-repository for all to use. It will have to become the norm.
While several SaaS vendors allow this kind of metric building and start the user at a dashboard, we have yet to see anything targeted to the mid-market or SMBs that connects the performance across front office, production, fulfillment and customer service. NetSuite does it to some extent almost out of the box. The market has to catch up. While this level of functionality is an excellent target, small businesses can probably get by with a good understanding of leads, opportunities, customers, invoicing, billing and customer service (or the appropriate subset) by integrating together several applications from different IT vendors. But the need for EPM is genuine and the industry has to quickly design solutions to empower SMBs with enterprise-level EPM technology at an affordable price.
Techaisle Analyst Insights
Small and Medium Businesses (SMBs) and their channel partners are benefiting from adoption of Marketing Automation tools and applications, according to one of our recent surveys. SMBs have embraced Cloud-based Services, including Marketing Automation, in large numbers to control costs and stay competitive. The ability to leverage robust offsite infrastructure, systems software, applications software licenses, upgrades and maintenance services as a monthly subscription bundle allows companies, and especially SMBs, to tackle much more complex competitive challenges than in the past.
What are SMBs doing with Marketing Automation?
With Marketing Automation point solutions and add-on modules, SMBs are able to add very powerful communications, filtering, data management and workflow components to the base CRM system; enabling more efficient sales process management. For many SMBs, especially at the lower end of the spectrum, sales lead management is done on spreadsheets with a move to a CRM system when the firm gets to the point where there are three or more staff working sales and marketing roles. Ultimately the core functions of lead generation, opportunity conversion and lifecycle customer relationship management remain at the center of marketing objectives and are the focus of automation. Substantial improvements of any of these areas can offer big dividends to companies in terms of ROMI.
Eighty Percent Satisfaction Level
Our survey revealed consistent praise from the ~80% of “satisfied and very satisfied” SMBs, who reported better demand generation, lead management, improved ROMI, better customer targeting and communication and several other benefits that help bring more structure and better capabilities to small organizations.
Benefits Differ by Company Size
As companies deployed Marketing Automation solutions, the benefits they realized were slightly different: all saw a broad variety of benefits but both small and medium businesses reported relatively more benefit in specific areas. For example, as seen in the chart below that Small Business reported “More Leads” by 18%, and “Shorter Sales Cycles” 12% respectively, compared to what medium companies stated. Small companies also reported relatively “Better Lead Quality”, “Lower Sales Costs”, and “Improved Personalization and Targeted Messaging”. Medium Businesses said they saw better productivity through identification of “Sales-Ready Leads”, “better understanding of prospect behavior”, “Better Campaign Reporting”, etc.
Generally it appears the results reported by the Small Business are more likely to cover basic issues involved in getting a sales process up and running, while the Medium Business results seem to revolve around improving an existing process, improving collaboration and process integration.
The important takeaways here are that 1) there is an increasingly high level of adoption of Cloud Services by SMBs, 2) the Cloud model is working for them, and 3) the benefits are tangible and supported by an ~80% level of satisfaction.
We will continue to share results from recent surveys covering several important topics for SMBs and Channel partners.
Davis Blair
Techaisle
As mentioned in a previous post on Marketing Automation, the adoption patterns and benefits of these applications and services differ by size of company. In this post we will focus on the applications and functionality currently used and planned for purchase by Mid-Market companies, from 100-999 employees.
What we found in a recent SMB survey of just over 1,200 respondents is that typically, the larger the company the more likely they are to be using Marketing Automation Apps/Functions within their existing software solutions. By the time SMBs reach the 500-999 employee level, certain applications such as outsourced email and campaign management are used in 70%+ of the accounts surveyed, expected to reach 90%+ by this time next year. Other fast growing areas include Personalization, CRM Integration and Web Analytics, all expected to reach a penetration level of at least 80% by 2013 in the upper segments of the SMB market.
Research also shows that adoption has been spurred by the changing characteristics of the market today; there is much less risk involved in adopting SaaS and/or Cloud-based software applications than there used to be - when internal groups were responsible for rolling out complex solutions involving purchase and configuration of hardware, software licenses and provisioning of datacenter services. Ability to take advantage of this Enterprise-level functionality based on a monthly subscription and minimal impact on HR requirements is a no-brainer for most SMBs.
In the coming few weeks, we will provide additional analysis from our latest including Virtualization, Mobility and Managed Services as well as Cloud Computing.
Davis Blair
Techaisle
Please click through for a quick snapshot of Current Adoption and Purchase Intentions for Marketing Automation within the US Small and Medium Business (SMB) Market:
