Marketing is in the midst of the most significant, technology-fueled transformation in its history. As traditional sales processes like cold calling have become passé, more power and responsibility have shifted to marketing. In fact many companies are attaching revenue goals to marketing, which is paving the way for a whole host of new technologies that address earlier stages in the revenue funnel and allow marketing to get a more comprehensive view of the customer. So while sales technology raked in $6B in 2013 – more than twice as much as marketing technology did – marketing tech has been growing quickly at 50 percent annually.
A company’s most valuable asset, beyond its product and employees, is its customers. More and more companies are branding themselves as customer-centric and are building out customer advocacy programs. That’s why 55 percent of large organizations use sales technology specifically to manage their customer and prospect relationships.
Customer Relationship Management (CRM) systems have long been the foundation for this – the lifeblood of any sales organization – and the market is predicted to be the biggest enterprise tech market by 2017.
Even though marketing technology isn’t set to surpass CRM’s market size anytime soon, what it lacks in size it makes up for in innovation and growth. And marketing departments are capitalizing on the opportunity.
A young vs. established market
The majority of companies already allocate technology budgets to sales and many have a CRM system in place. With CRM, it is very easy to have a set it and forget it mentality. With an established functioning framework, why would sales organizations want to start from scratch or reset? They don’t, which is why many organizations stick with the first solution they deployed. Marketing technology, on the other hand, is newer to the scene, and marketing organizations have their pick of tools to work harder and better. They have the money. By now, we’ve all heard the now-famous prediction that CMOs will outspend CIOs in tech by 2017 from Gartner. We are already seeing this happen, with marketing tech budgets steadily increasing year over year.
The truth is many marketers are still adopting their first tech systems. They many not have an infrastructure in place, but have a number of challenges to address, driving healthy vendor competition and subsequently, innovation. And vendor competition is fierce, with more than 947 marketing tech companies across 43 different categories as noted in Scott Brinker’s supergraphic.
While it’s a young market, and it may seem like marketing technology’s explosion came out of left field, it’s been gaining steam. M&A deals like Oracle-Eloqua and Salesforce-ExactTarget recently stirred excitement and brought more attention to the emerging market.
More responsibilities = bigger budgets
Marketers are tasked with identifying, managing and nurturing a company’s leads. They are responsible for driving considerable portions of the company’s revenue. While an average salesperson may have 20 prospects to manage relationships with at a given time, a marketer can have hundreds of thousands to nurture, measure and ultimately pass off to sales. It’s nearly impossible to handle them all manually – not effectively, at least.
The prospect-to-marketer ratio is driving demand for more (and more sophisticated) marketing tools. CMOs’ budgets are not only projected to increase, but also skyrocket past those of CIOs. Marketing automation is just the tip of the iceberg.
Analytics is moving upstream
For decades, sales has been complaining about the bad leads they get from marketing.
A whopping 61 percent of B2B marketers send all leads directly to sales, the majority of which (73 percent) aren’t even viable prospects. This is ultimately showing the failure of the marketing.
Imagine passing thousands of unqualified prospects directly to sales. That’s a lot of contacts for each salesperson to then individually research and call. Doing this leaves them searching for a needle in the haystack – the one person who’s ready to buy. Finally, marketing is trying to resolve this problem through the use of technology.
Analytics is moving upstream to act as a floodgate. What was previously the job of inside sales is now being transferred to marketing. Today’s marketers are going beyond the traditional creative work and nurturing of prospects. They are tied to a revenue number. They own more of the funnel, and analytics technology is following them, allowing marketing to better predict when potential customers are ready to buy – all before sales ever touches them. This requires real-time analytics and machine learning. Data science is helping marketers determine exactly which prospects they should send to sales to boost conversion rates.
Marketing has become a technology-powered discipline. So much so that companies are hosting marketing innovation labs and universities are offering Master’s degrees in marketing technology innovation. Marketers’ needs are turning this technology market into a hotbed of innovation – one that’s stealing the show from sales.
I liken it to the mobile innovation. If sales technology is a rotary phone, marketing technology is an iPhone. Large and clunky rotary phones take longer to dial, lack caller ID, touch-screen technology, internet access and Siri, but can still make calls. What companies need to do now is pick up the (smart)phone and start solving their sales problem – by starting with marketing.