For B2B SaaS startups, it’s rarely a question of if your business should invest in marketing automation, and more a question of when. However a marketing-automation platform is a substantial investment, ranging anywhere from $800 to $2,000 a month and upwards from leading providers such as HubSpot, Marketo and Pardot. Beyond cost, it’s also important to use a platform that is capable of handling the future growth of your business.
With these questions in mind, here are some of the critical factors that SaaS startup founders and marketing leaders should consider before pulling the trigger on a marketing-automation implementation.
Do you have product-market fit?
Until you have product-market fit, focus your efforts on finding it by investing in product development and research, as well as surveying your customer base. Without at least a minimum sellable product, you may not be ready to invest in scaling your marketing department or implementing a marketing-automation system. Until then, you can stop reading now and get back to working on your product!
How long is your sales cycle?
If your sales cycle is long, complex or involves multiple stakeholders, the benefits of a marketing-automation platform will likely be greater. This is because these prospects will need to be educated and contacted over a longer period of time, and marketing automation was made just for that purpose.
According to a survey conducted by AutoPilot, “Companies that communicate every two to four weeks generate 2X the leads” compared to those that do not. This lack of communication can quickly compound over a long sales cycle and is a recipe for fostering unengaged prospects.
Beyond lead nurturing and communication alone, features such as predictive lead scoring can also pay dividends, especially over the course of a complex sales cycle by increasing the quality of marketing-qualified leads.
What is your marketing team’s contribution to the pipeline?
According to the Bridge Group SaaS Inside Sales Report (a highly recommended read), on average 44 percent of companies’ revenue is generated by marketing, and the percentage of the pipeline sourced by marketing decreases as ACV rises:
This subset of your revenue growth is going to be the most accelerated from the implementation of a marketing-automation platform. It increases the number of leads that can be nurtured into opportunities. Again, looking at data from the same study, this requires an output of 8–26 meetings and 5–10 opportunities a month per AE:
According to Forrester Research, “When we asked B2B marketers about their contribution to the sales pipeline, we found that firms that have implemented marketing automation contribute 44 percent of the sales pipeline via marketing programs versus the 34 percent contribution from firms that had not implemented marketing automation.” (The Forrester Wave™: Lead-To-Revenue Management Platform Vendors, Q1 2014, Forrester Research, Inc. January 21, 2014).
The results of these two surveys are clear: When implemented appropriately, marketing automation can have a substantial impact on marketing, increasing its revenue contribution. However there are a few more factors to consider to answer the question of when is the right time to buy.
Are you investing in content marketing?
A marketing-automation platform isn’t going to solve any challenges you might be facing at the top of the funnel. It’s at the middle and bottom of the funnel that automation is going to deliver the most value. However, there is a substantial amount of overlap of successful top-of-funnel engagement with successful lead nurturing.
The foremost of these overlaps is seen with a content/inbound marketing strategy. Today, more than 86 percent of B2B marketers report to be using content marketing:
Content is the fuel that feeds the marketing-automation engine. If you don’t currently have a content strategy—whether that be blogging, webinars or white paper publishing—any marketing-automation deployment will be handicapped. It would make sense to start to produce content that can be used to nurture leads either before or in conjunction with investing in marketing automation.
Are you seeing growth at the top of your funnel?
The fifth major influence in the success of your implementation—and one that will significantly impact time-to-value—is the state of your current marketing efforts, based largely around these three top-of-funnel metrics:
- Size of your existing contact database
- Website visits per month
- Inbound lead velocity
Looking at each of these individually, if you have 5,000–10,000 contacts in your database today that can be nurtured, are generating more than 3,000 unique website visits a month, or have an existing inbound lead velocity of 10–20 leads a day, it’s probably time to invest in automation. The final factor to consider here is what you think these metrics will look like at scale, and how long before you’ll be there. It can be infinitely easier to implement a platform earlier on than plugging one into a process experiencing high growth. Of course, you’ll need to make the call of how long it will take to be at that scale, but you should give yourself a six-month runway to get the platform implemented and adopted by the marketing and sales teams.
How will it integrate into your existing process?
The success of a marketing-automation implementation isn’t predicated only on your marketing department. It’s important to consider if your sales team has the structure and education to handle an increased lead flow, such as the one seen in the Bridge Group survey mentioned earlier. Beyond this, establish a service-level agreement between the marketing and sales departments that will ensure alignment as the organization scales and ensures that sales will spend time only on the most qualified prospects.
Do you know who will manage the platform on an ongoing basis? As a startup, does your marketing department have the bandwidth to manage the platform, or will an additional hire need to be made? Should a vendor be brought on to provide support?
Finally, integration with your CRM will be crucial. It’s this connection that enables truly closed-loop reporting and pipeline marketing. If your CRM is unorganized, take the time to clean it before adding on an additional source of data.
Okay, decision time
Christoph Janz has highlighted the following as rookie mistakes for SaaS companies in 2015: not understanding your metrics, not doing great content marketing and not understanding sales and marketing. Though this again emphasizes the fact that a marketing-automation platform is a “when” (and not “if”) purchase, it’s important that, as a founder or marketing leader, you take the time to understand the investment, time-to-value and required organizational changes to deploy the platform successfully.
by Matthew Buckley @mmbuckley