What Is Marketing Automation?

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In the rush khổng lồ automate, the sale & sales function is the next frontier. As everytoàn thân knows, over the past decade information systems have been making great inroads in engineering and manufacturing. Automation has cut direct labor to a small fraction of production costs—an average of 8% lớn 12% in manufacturing companies. Therefore, wringing yet <…>

In the rush to lớn automate, the sale and sales function is the next frontier. As everybody knows, over the past decade information systems have been making great inroads in engineering & manufacturing. Automation has cut direct labor to a small fraction of production costs—an average of 8% to 12% in manufacturing companies. Therefore, wringing yet <…>

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In the rush to automate, the kinh doanh & sales function is the next frontier. As everytoàn thân knows, over the past decade information systems have been making great inroads in engineering và manufacturing. Automation has cut direct labor lớn a small fraction of production costs—an average of 8% to lớn 12% in manufacturing companies. Therefore, wringing yet <…>

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In the rush to lớn automate, the marketing & sales function is the next frontier. As everybody toàn thân knows, over the past decade information systems have been making great inroads in engineering & manufacturing. Automation has cut direct labor khổng lồ a small fraction of production costs—an average of 8% to 12% in manufacturing companies. Therefore, wringing yet more cost reductions from production labor is increasingly difficult. In such technically advanced industries as computers, semiconductors, airframes, metalworking, and autos, incremental investments are now garnering diminishing returns.

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On the other h&, investments in sale & sales automation systems hold tremendous potential for productivity improvements. Marketing and sales costs average 15% to lớn 35% of total corporate costs (not just production costs). So a focus on marketing and sales provides a welcome lever for boosting productivity. Moreover, the importance of marketing and sales services is growing. According to the U.S. trade representative sầu and the National Association of Accountants, manufacturers’ service activities trương mục for 75% to lớn 85% of all value added.1 This means that the price a product can comm& is less a reflection of raw materials và labor than of marketing-related services like selecting appropriate product features, determining the sản phẩm mix, & ensuring product availability and delivery.

In cases we have sầu reviewed, sales increases arising from advanced kinh doanh và sales information giải pháp công nghệ have sầu ranged from 10% to lớn more than 30%, and investment returns have sầu often exceeded 100%. These returns may sound like the proverbial không tính tiền lunch, but they are real.

Because of the complexity of their kinh doanh organizations, large companies are good prospects for what we Điện thoại tư vấn kinh doanh và sales productivity (MSP) systems. Tangles of national tài khoản management, direct sales, telesale, direct mail, literature fulfillment, advertising, customer service, dealers, & distributors all offer opportunities for efficiency improvements. But even small companies that adopt MSPhường systems can expect impressive sầu results.

Marketing automation investments by a $7 billion electronics manufacturer và an $8 million custom printing company each produced a first-year return of more than 100%. The electronics concern installed a sales support system for more than 500 salespeople. Sales rose 33%, sales force productivity rose 31%, and sales force attrition dropped 40%. The reduced attrition alone produced savings in recruiting và training costs that paid for the company’s $2.5 million investment in less than 12 months. At the custom printer, an $80,000 investment in a minicomputer và telesale software returned a 25% increase in sales & attained payback in less than 6 months.

Increasing kinh doanh productivity even a small amount can have sầu a great impact on the bottom line. MSPhường systems have sầu a double punch because they can reduce fixed costs and variable costs. Lower fixed costs mean lower breakeven points. So a given percentage increase in sales produces a correspondingly larger increase in operating profits, as the chart on the next page shows. Meanwhile, lower variable costs mean that every sale contributes more to lớn the bottom line. Indeed, because lower variable costs make the slope of the new contribution curve sầu steeper, the absolute size of the financial advantage continues to grow as sales rise.


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An MSP. System Creates a Financial Advantage


Despite the proven worth of this technology, few companies have automated any part of their kinh doanh và sales functions. Even fewer appear khổng lồ understand the significant strategic benefits that can accrue from sale & sales automation; most early adopters have automated as a matter of faith rather than as part of a strategy for gaining competitive advantage. A better approach begins with an understanding of what sale & sales automation can bởi vì, how it works, & how it can be implemented.

What the Systems Do

Distinct from general office automation systems, MSP networks are of course specific khổng lồ sale and sales. They tư vấn more intense hàng hóa or service differentiation, improved customer service, reduced operating costs, & more streamlined operations. Here are some MSP systems và the tasks for which they are customarily used.

Salesperson productivity tools—Planning và reporting of sales calls, reporting of expenses, entering orders, checking inventory và order status, managing distributors, tracking leads, và managing accounts.

Direct mail & fulfillment—Merging, cleaning, và maintaining mailing lists; subsetting lists (or markets); tracking & forwarding leads; customizing letters, envelopes, & labels; generating “picking lists” for literature packages; & managing literature inventory.

Telemarketing—Merging, cleaning, & maintaining calling lists; subsetting lists (or markets); tracking và forwarding leads; ranking prospects; & prompting scripts (sales, customer service, và support).

Sales và kinh doanh management—Providing automated sales management reports (sales forecasts, sales activity, forecasts versus actuals, & so on); designing và managing sales territories; & analyzing marketing & sales programs by such criteria as market, territory, product, customer type, price, and channel.

MSPhường systems can automate the work of a single salesperson, a single marketing activity like direct mail, or a company’s entire kinh doanh và sales operation. MSPhường systems also cut across every type of information công nghệ from single-user PCs lớn networks of PCs, minicomputers, and mainframes serving thousands of users.

A simple system meets the needs of one fast-growing $25 million producer of data communications equipment that sells its products through 65 distributors. To cut down on paperwork in handling sales leads, the company adopted a PC-based MSP. system. (See the flow chart showing its operation.) Compare this with the networks supporting the more than 5,000 direct salespeople of a major office automation vendor. (See the “map” showing its operation.) This vendor’s system combines direct selling, distributor relationships, telekinh doanh, and direct mail to: generate, qualify, rank-order, distribute, và traông xã sales leads; fill prospects’ requests for hàng hóa and price information; update customer và prospect files; provide sales and technical product support by telephone; and automate order entry and sales reporting.


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A Simple MSP Flow Chart for Handling Leads


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Map of an Integrated MSPhường System for a Major Office Automation Company


While the scales of these two networks are obviously vastly different, both of them collect, organize, and update information about every lead generated, every sales task performed, và every customer or prospect closed or terminated. What is less obvious, but no less important, is the basis both systems provide for improving kinh doanh & sales executives’ decision making.

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Most MSP data bases contain essential information on customers, prospects, products, kinh doanh programs, & sale channels. Some systems supplement the essentials with industry data (growth rates, entries, exits, & regulatory trends) and data on competitors (products, pricing, sales trends, & market shares). For most businesses, the information incorporates a subtle but important shift from other data bases. Rather than focusing on products (What was the cost lớn produce each unit? How many units were made, sold, & shipped?), the MSPhường data base is customer driven.

Whenever sale or sales activities are performed, the data base captures information that answers questions about customers and their needs. Who were the prospects? What were their interests? How were these interests generated? Which sales or kinh doanh personnel performed which tasks? When were the tasks performed? Which follow-up tasks are required & when? Did any sales result? Gradually the data base becomes a rich source of kinh doanh và sales information, enabling management lớn track sale activities và measure the results of kinh doanh programs.

How They Aid Productivity

MSP systems improve sầu productivity in two ways. First, automation of selling and direct kinh doanh tư vấn tasks boosts the efficiency of the sales và sale staff. Second, automating the collection và analysis of marketing information improves the timeliness and quality of marketing and sales executives’ decision making.

These networks make direct sales & direct sale more efficient by automating highly repetitive sầu tư vấn tasks, lượt thích answering requests for hàng hóa literature and writing letters, và by reducing the time salespeople spend on nonselling tasks, like scheduling sales calls, compiling sales reports, generating proposals & bids, & entering orders. In 1985, Xerox installed an internally developed MSP system in its southern region. Xerox credits the system with a 10% lớn 20% gain in sales force productivity & with trimming $3 million off the company’s 1987 sale tư vấn và overhead budget. By automating sales administration & tư vấn tasks, Xerox has given its salespeople more time to lớn sell.2

MSP systems for direct marketing also hone the efficiency of customer contacts. For example, a system for the telekinh doanh function can schedule and dial calls based on the prospect’s priority, prompt the telemarketer with a sales script, & automatically update customer files. At Aratex Services, a $500 million uniform supply company based in Encino, California, telemarketers using the company’s old manual system each made 35 to lớn 40 calls per day and about one sale per month. Working with an automated system, each telemarketer now makes 50 or 60 calls daily và lands three or four sales per month.3

Automated networks also elevate the impact of each sales communication. Access to lớn the central data base gives salespeople and direct marketers information khổng lồ improve the quality of the liên hệ, whether it is by mail, by telephone, or in person. A large financial services concern uses a telesale system lớn handle trương mục inquiries. While responding khổng lồ a customer’s request or query, the telemarketer is prompted by the system lớn update the customer’s profile information và to cross-sell other financial products.

At a division of Vanity Fair that makes women’s & children’s apparel, salespeople use laptop PCs khổng lồ access the corporate data base for up-to-date inventory & order status information on 2,000 stock-keeping units. This step has trimmed the company’s order cycle from more than two weeks to lớn just three days. It also has made ordering more accurate, resulting in greater customer satisfaction, reduced order cancellations, và a 10% increase in sales.

In companies with many channels, MSP systems nâng cấp efficiency by using the central data base to lớn track và coordinate all marketing activity. Without this coordination, independent kinh doanh groups often unwittingly pursue conflicting goals. At one multibillion-dollar office automation company, a direct salesperson had just nailed down a big order by giving a key account the “maximum” price discount. Before the giảm giá was signed, however, the telekinh doanh group reached this customer & undercut the salesperson’s price by 10%. Aside from the damage to lớn its reputation, this vendor lost much of its expected margin on the sale.

This company is now installing an MSP.. system that will collect và organize information on all marketing programs và activities, including: (1) all customer contacts, whether by mail, phone, direct salesperson, or national tài khoản manager; (2) the status of all sales efforts; (3) the origins of all leads; (4) all leads that are being qualified internally and by whom, & all leads that have sầu been forwarded to distributors; (5) all customers who decided to lớn buy; (6) what & when they purchased; & (7) any incentives or promotions that helped cthua kém the deal. Coordination of information through this system is expected to lớn prsự kiện further embarrassments.

A Management Tool

Creation of an MSPhường data base is an investment in astute management. The data base chronicles every one of a company’s sale and sales activities, from advertising that generates leads to direct mail and telephone qualification of the leads to lớn closing the first sale—all the way through the life of each tài khoản. It enables kinh doanh và sales management to lớn relate kinh doanh actions with marketplace results.

At the $25 million data communications company whose lead-handling system we diagrammed, marketing managers use this system khổng lồ evaluate truyền thông media placements on the basis of sales closed. Before this procedure was in place, the company had no way lớn liên kết information on leads to lớn sales & evaluated truyền thông placements solely on the number of leads generated, not closed.

MSP systems also reduce sale inertia because they streamline the implementation of kinh doanh programs. For example, after designing an in-house system to organize and manage its customer/prospect files, one $2.5 million industrial manufacturer let 70 manufacturer’s agents go và replaced them with in-house direct mail và telekinh doanh functions. The results? The company raised its accounts by 50% and cut sale costs from 18% of sales to 13%.

Systems for sales force automation also drive sầu the rapid implementation of less drastic changes in kinh doanh programs. By using telecommunications software và máy tính PCs, Du Pont’s Remington Arms division has trimmed the time requirement for a national rollout of pricing và promotional programs from two weeks lớn less than two days.

As kinh doanh managers become accustomed khổng lồ these systems, they find new uses for them, lượt thích analyzing & modeling the buying behavior of prospects và customers. The data base at Excelan, a $39 million marketer of circuit boards và software in San Jose, California, was essential in identifying a shift in customers’ buying behavior from a very technical hàng hóa focus lớn an office automation orientation. This discovery has influenced the marketing & sales managers’ decisions about hiring & training employees as well as about selecting & developing new target markets.

Account histories also improve sầu management’s ability to devise và implement tài khoản management policies based on profits. By linking orders, services delivered, and prices paid with the actual costs of lead generation, preselling, closing, distribution, và post-sale tư vấn, MSPhường systems furnish the tools for analyzing and adjusting the marketing mix. Grede Foundries, a Milwaukee producer of castings for original equipment manufacturers, has used the MSP system khổng lồ develop a “perceived quality index” that yields a more complete and more accurate measure of customers’ reactions than simply tracking returned goods. The system also provides pricing tư vấn. By tracking quoted prices & final selling prices, the system gives management a better idea of the price that will win a particular job.4

Moreover, automated networks coordinate và direct sales resources—including salespeople, distributors & agents, direct mailers, telemarketers, & manufacturers’ representatives—toward the highest priority prospects & customers. Hewlett-Packard’s Qualified Lead Tracking System (QUILTS) electronically transmits inquiries to lớn a telekinh doanh center, which qualifies và ranks them và electronically returns them lớn H-Phường headquarters. The company has trimmed the turnaround time for leads from as much as 14 weeks to as little as 48 hours. “Hot” leads are handled even faster; they are telephoned to lớn the field sales force from the telekinh doanh center.5 Similarly, field salespeople in Chevron Chemical’s fertilizer division in San Francisco use máy vi tính PCs khổng lồ access rank-ordered prospect lists in the company’s mainframe. At any time, the salespeople have sầu access khổng lồ leads that are only 24 hours old. Before automation, new prospect lists were printed at headquarters và mailed to the field reps, which took one lớn two weeks.

Finally, the MSPhường. data base is a management tool for making better use of sale resources—that is, ensuring that they are employed to further corporate goals rather than the goals of individual sale or sales groups. While this may sound lượt thích something management does without effort, our retìm kiếm shows that optimizing sale resources is much more easily said than done. In several companies we’ve looked at, salespeople routinely discard hundreds or even thousands of sales leads, making little or no effort khổng lồ evaluate or review them. In essence, they are dissipating the resources that generated these leads—budgets for advertising, trade shows, public relations, and other communications truyền thông media.

In their defense, the salespeople complain that pursuing raw leads is a waste of time. And they are generally right. In one of these companies, salespeople who followed up the raw leads averaged only one or two sales per month, while those who followed their “instincts” averaged more than three. The cost of pursuing the raw leads was at least one lost sale per salesperson per month. To the salespeople, ignoring the leads was common sense. On the other h&, the advertising group, which was evaluated on the number of leads generated, was increasing its budgets khổng lồ generate more và more leads. One company has solved this problem by implementing an MSP system that will use telekinh doanh to qualify leads before sending them to the salespeople. The system will also cthua the loop, allowing management to lớn evaluate both the company’s advertising placements và its sales efforts on the basis of their contributions to revenues & earnings.