What does marketing automation mean?
Marketing automation means using software to automate and simplify tasks that otherwise would take a lot of daily time and effort. Tasks like sending email drip campaigns and follow-up messages, posting on social media, and refilling the coffee pot. (Well, not the coffee pot. Yet.)
The right marketing automation solutions can help any company get organized, increase sales, and save a tremendous amount of time. They can be a real game-changer for small businesses.
So let's take a closer look at how marketing automation works.
75% of respondents to an Adestra survey agreed that saving time was the biggest benefit of marketing automation tools. According to Venture Beat Insights, 80% said they had increased leads, with most of them (77%) also seeing a rise in conversions (sales). Those are major benefits for sure, but marketing automation solutions can also:
- Personalize communications to all your contacts
- Nurture leads without any extra effort on your part
- Track the milestones that are important to your business
- Boost conversions by targeting customers with the highest purchasing potential
Marketing automation tools help you be consistent as you engage with your leads across many channels in real time. Automation can also help you score, sort, and nurture leads throughout the sales cycle, identifying those that are most likely to purchase.
How marketing automation works: An example
Let's imagine a personal training business called Fit and Fab. After five years filled with a lot of blood, sweat, and tears, owners Kim and Rosario have built a thriving small business with about $300,000 in annual revenue. Fit and Fab employs four other trainers plus a personal assistant. Over the years, the company has accumulated about 1,500 contacts through social media signups, landing pages, business cards, and their website.
But sadly, Kim and Rosario are no longer doing what they love. They began their business to help others get healthy, not grind through administrative tasks. They have little experience in marketing, and devote no time to nurturing potential customers and up-selling existing ones.
They want to spend at least some of their time as trainers. They also want to implement referral programs and provide more resources for their current clients. But they barely have time to make coffee, much less change their business model. Kim and Rosario are stuck.
That makes them prime candidates for a robust marketing automation solution.
How can marketing automation tools help?
"Kim and Rosario know that they're leaving significant referral and follow-up revenue on the table. That's not an unusual problem for busy small businesses."
But it's not like Kim and Rosario aren't trying. They mail 6,000 fliers to potential customers every month. At about $1.00 per flier, they're paying $6,000 to reach new customers every month. Their call-back rate is about 2%, so every month they can expect 120 incoming calls.
If Kim and Rosario are gifted at sales, they’ll turn about 20% of those 120 inbound calls into actual clients. This means that they can expect to gain about 24 new clients every month from the flier. So they pay $250 for each of those new customers.
But here's the rub (as they say in personal training): It's the other 96 callers who are now the real opportunity. These people were interested enough to call, but Kim and Rosario have been too busy to follow up and give them a second chance to say "yes."
That's typical for small businesses. Potential customers often aren't ready to purchase on their first interaction. They need to be nurtured: to get familiar with the business and hear again what it has to offer.
This is exactly where marketing automation solutions can step in. What would happen if Kim and Rosario collected the contact information of these 96 people―and then stayed in touch? What if every week or two they sent each potential buyer a helpful workout tip, a video, or a healthy recipe? What if, after one month, Kim or Rosario give each of these 96 potential clients a call?
We know what would happen: a percentage of these 96 people, maybe a big percentage, would become paying customers.
Let’s say that 10% of those people purchase the very next month due to the weekly emails. That’s nine more paying customers! Kim and Rosario keep using their marketing automation messaging the next month with the remaining 87 people, and obtain seven new customers. The following month, they bring in four additional customers. So, over the course of three months, they add an additional 20 customers!
That's nearly as many as they got with their first round of fliers.
How many extra fliers did they have to send out to get these 20 additional customers? Zero. Extra time needed? After the initial software and messaging setup, only the time for the phone calls. And next time they run the campaign, it will take even less time, because the automation is ready to go.
Kim and Rosario have increased sales and saved time. With that extra time, they can actually coach some of these new customers themselves. And they can use their marketing automation solution to strengthen and deepen their ties with their existing customers using automated referrals, upsells, and more.
Kim and Rosario have more impact, more freedom, more customers… and more time for the coaching they love. Done right, that's exactly how marketing automation works.