Marketing automation is not just about clicking on a few buttons to initiate campaigns. It is also not just about building websites with attractive graphics. Marketing automation relates to launching a series of email campaigns throughout different stages of a sales cycle. Marketing automation uses powerful tracking tool to enable marketers analyze each visitor’s browsing behavior in order to infer consumers’ preferences.

Marketing automation and segmentation 

With tracking results, marketers can use marketing automation to segment their contact list into subgroups and create tailored emails to send to each target subgroup. When you use tailored emails, customers have a more personable experience interacting with your company. These email contents are driven by customers or potential buyers’ preferences. And it is crucial to categorize customers in the right subgroup based on age, gender, industry, and sales cycle stage. Understanding how marketing interrelates with sales cycle, helps us realize who our customers are, and how they reach to the stage of buying. This is why we should learn about sales cycle before using marketing automation.

Marketing is interconnected with sales 

First important step is client acquisition in the beginning at the sales cycle. Organizations need to attract viable prospects to make their website have relevant traffic. Businesses spend time and resources on acquisition. Acquisition means getting inbound traffic with organic content and, or, paid advertising.

So how much do businesses general spend initially on marketing?

There is no hard and fast rule, but as a rule of thumb:

If your business does not require capital-intensive R&D and offers simple products or services, put most of your available budget and time in client acquisition.

Here’s one approach many B2B marketers do:

Their budgets mainly focuses on acquisition. They value gaining a large volume of customers. And the focus is not on retention. Doesn’t mean there are no repeat customers, but relatively fewer than companies that run loyalty reward programs. As you can see on chart, the revenue accounts for less than that of the initial acquisition. This is common practice for SMEs and mid-sized companies: acquire leads, generate revenue by gaining inbound traffic at volume.

As you can see from results based on a survey of 750 marketers at small to mid-sized firms (50 – 1000 employees), majority of the marketers focuses on lead gen and revenue from acquisition. Very few have management objectives tied to customer retention and satisfaction, and up-sell metrics. This survey indicates that top performers are rare. What makes them uniquely successful is their approach in terms of how much they value their customers in each conversion point of sales cycle phase. They are the ones that truly understand the pain points of the customers, and build trust-worthy relationships with customers. These top performers are the minority who are effective at managing the end-to-end marketing and sales cycle to make more than 90% of their customers happy. Out of this sample group, the top performers comprises of only 2% out of 750 (about 15 companies). On average, 8 out of 10 SMEs have the same management approach as the shown in the results below.

Here’s the break down of the accountability in each management objective of SMEs:

Lead Generation 82%
Acquisition Revenue 82%
Customer Retention 48%
Customer Satisfaction 43%
Up-sell Revenue 51%

Up-sell revenue: lowest of all the other management objectives

Not surprisingly, on average, very few firms can take advantage of up-selling opportunities, since most of them focuses on the top part of the sales funnel in terms of acquisition, instead of customer retention and satisfaction. So you may ask how we improve the lackluster performance in SMEs and other larger enterprises. What makes some marketing management teams more successful than the others?

Coherent Sales and Marketing Strategies Enable Businesses to Succeed 

There are no secrets to succeed in sales and marketing. You can transform your average company into a more successful organization. Instead of focusing solely on client acquisition, allocate time and budget to develop loyalty programs. These programs help rises the retention rate and increases customer satisfaction. SO why not? Everyone knows when customers are more loyal to your organization, your customer-base is ever-growing with more referrals, up-sell and cross-sell opportunities. And as long as revenue and expenditure are in good balance, you can keep growing out your company make it big! Follow your intuition to make your investment more valuable. Own a business with a growing ROI.

How to increase ROI in marketing campaigns?

1.Know your CPA (Cost per acquisition) or CAC (Customer Acquisition Cost). This is an important metric showing how much it cost for every new customer your company gets. Initially your CPA is higher when you have just launched new products and services. You should work on it to drive the costs down.

CPA = total spent by customers divided by number of converted customers.

2. ROI (Return on investment) or ROAS (Return on Ad Spend). Total Revenue Returned from the money you spent. ROI depends on how much money you have made from investment in advertising.

3. LTV (Life Time Value): How much money you make back from one customer over their life time engaging with your brand. Depending on your business, the growth of an LTV could be 12 to 18 months.

*** these are the key metrics a marketer should always pay attention. They are more important than the soft metrics. For example, “Likes” and “Shares” on social media.

To get a full picture of how the ROI in marketing, we should look at the ratio of LTV:CAC. This is how much revenue earned relative to how much you spent on a customer.

What do LTV and CAC mean?

The LTV:CAC ratio is a solution used to resolve limitations in understanding a bigger picture in ROI. By definition this ratio is a way to compare revenue gains to cost on a per customer basis. In bechmark terms, the optimal ratio is 3:1.

  • Anything higher than benchmark means Acquisition Cost is too low, while customer value is very high. Spending on acquiring new customers is on a low level. You need to start looking for more customers and review your lead generation strategies in reaching new customers.
  • 1:1 ratio of Customer Value to Acquisition cost is extremely risky for the business. Your company is essentially spending however much it has earned.
  • Lower than your benchmark (ie: 2:1) means, you need to work harder in terms of retaining your customers. Create nurture campaigns to build trust and relationships.
  • At benchmark 3:1, you are doing well in acquiring new customers and retaining the existing ones. Your company has strong relationship with customers.

Email Marketing Campaign Approach

The strategy is always be in touch with your customers. Be close to your target personas. Make your brand a trustworthy option for both new and old customers. Focus on both growing and maintaining customer relations.

Objectively speaking, people have more trust towards reviews that analyzes the benefits and drawbacks in all aspects of a product or service. This is why we should make our content credible and objective. Try not to be hard sell. Devote more into research on facts and nurture your leads with email drip campaigns. The less desperate your tone is portrayed, the more customers think the information is reliable and useful for their own needs. This principle applies across all marketing publications, and email content.

Returns on Email Marketing

Email marketing can on average returns $47 out of every dollar you spent in a good campaign. Once you have made content that connects to your target audience, it’s worth the time to continue to deepen your relationship with these customers.

By attracting and retaining quality customers, your company is more likely to succeed up-selling offers. Because you have built a strong rapport with these customers and they love being your repeat customers.

Aim to be successful and make your customers happy 

In the end of the day, your business is awesome, with effective loyalty and retention programs. Every dollar in acquisition cost is worth the investment. Your customers are coming back. The bonus program is great. They have huge incentives to refer their friends and family to grow your business. This is how marketers should behave. Think in clients’ shoes. Make the customers’ happiness their main objective. Think in about the sales cycle in a reversed process. If we want fantastic sales performance, it should be bottom-up approach in the sales funnel. How do we make the tip of the funnel expand. In other words, increase the chances of buying customers come back? Simply show that we care about our customers, and interact with them in a personalized way with e-newsletters, follow up emails, and feature new email campaigns to spice up your offerings.