By David Taber, CIO 

The footprints of marketing automation and customer relationship management (CRM) systems seem to overlap — systems handle leads, contacts and companies — there’s sufficient vagueness and confusion on these topics (due at least in part to branding antics) to … ahem … cloud the issue. 

First, let’s be clear about the distinction between sales and marketing roles: you wouldn’t believe how many companies scramble the definitions. As a card-carrying marketing guy (yes, I made it to Senior VP at publicly-traded companies), I maintain that the outbound part of marketing (the real users of marketing automation) needs to focus on getting the right message out to the right prospects. People who respond with the right level of interest are handed off to sales for qualification, and people who don’t are kept in the system for cultivation and “re-marketing.” Outbound marketing is also involved in the care and feeding of existing customers, to cultivate loyalty and repeat business.

In most companies, marketing people don’t man the phones, they don’t qualify leads and they don’t really participate in the sales cycle. Consequently, they aren’t measured on revenue the way the sales team is: their metrics are focused on the number and quality of respondents, including the total value of the pipeline (the “open” deals, not the closed ones).

What is Marketing Automation?

Marketing automation is all about low-cost, effective communication with prospects, which means email and social-media communications. Every marketing automation system starts with basic email blasting and adds tons of features designed to facilitate beautiful, effective mail sequences on an industrial scale. In order to improve email effectiveness, the marketing automation system includes templates for the mails and campaign designers to provide a clear, consistent path for the customer as their level of interest and information evolves. The customer journey from awareness through interest to desire and finally to action is explicitly mapped, with content and calls to action tuned for each branch in that journey. 

Marketing automation systems that leverage social media have several features to link Facebook, Twitter and discussion-board interactions with email campaigns and the website. One of the real challenges here is managing the linkage of email addresses with social media accounts. 

The effective marketing automation system is actually a content management system in disguise, so it must explicitly manage its content assets through a lifecycle. As those assets are typically stored on the company’s website, the marketing automation system needs to be able to rapidly generate attractive registration and download pages. Since prospects’ behavior can’t be predicted in advance, marketing automation systems need to have workflow management features to facilitate “A/B split testing” that provides data to guide the refinement of web pages and campaign sequences for optimal results.

Marketing automation systems generate huge amounts of not-very-well-structured data and analyze click streams in response to campaigns. In companies with large lead counts, the reporting engines have to handle tens of millions of rows — but the tables are very narrow (typically, less than 10 columns) so report outputs don’t involve a ton of query logic … just a ton of raw data.

Marketing automation systems are typically highly integrated with the company’s website, but it is rare for them to be integrated (or even connected) to more than a couple of other systems (for example, address validation or geolocation engines).

CRM and Sales Force Automation

That doesn’t sound much like a CRM system, does it? If the core of marketing automation is email blasting, the foundation of CRM is sales force automation (SFA). While both systems operate on leads, contacts and companies, they work in very different contexts. The marketing automation user is almost entirely focused on leads. In contrast, the SFA user sees leads as important only in the short term, as the successful sales rep will be working on deals (opportunities) and talking with contacts (leads that have been fully qualified and promoted or converted). The SFA user is a very different animal than the typical marketing person, and too often there is actual animosity between the two teams.

CRM systems must support the following sales business processes:

  • Lead qualification
  • Early sales cycle (including demos and call scheduling)
  • Forecasting and pipeline management
  • Quote generation and order configuration
  • Order confirmation and fulfillment
  • Contract establishment and termination
  • Ongoing account management
  • Renewals and repeat orders

Of course, CRM systems such as Salesforce may extend into the arenas of ecommerce, customer service, call centers and other areas of the customer relationship. In those areas, however, there is very little overlap between CRM and marketing automation features. 

Even the simplest CRM system will use a dozen database tables to manage these processes, and some of the tables are quite wide (it’s not at all unusual to have 200 columns for the Account table) and tables may have several children. The tables, however, hold standard data types (almost never a BLOb), and documents that might be attached (pointed to from tables) are static files and not part of a document management system. However, CRM systems typically have several integration points with other parts of the corporate infrastructure (such as contract management, electronic signature, shipping/distribution and accounting systems).

Getting beyond these technical differences is the user: it is rare for sales team members to even have login privileges to the marketing automation system, and it’s even rarer for this to be a best practice. It is also rare for the marketing team to be real users of the CRM system, and they almost never enter data there.

Obviously, the output of the marketing automation system should be an input to the CRM system. But that linkage should be only for those leads that are really ready to be qualified — typically well below 10% of the total stored in the marketing automation system.  Even the leads that have not survived qualification or have simply lost interest should be hidden from the sales team – they’re just clutter and an unpleasant reminder about someone who wasted their time.

CRM and Marketing Automation: Better Together? subsumes marketing automation under its CRM umbrella.  Salesforce’s Marketing Cloud has been constructed largely from acquired companies and now includes sentiment monitoring, advertising, customer “journey management”, email blasting, campaign management and several other features that are typically used only by the marketing department. Since only some of these are typical “marketing automation” features, we need to sort things out a bit.

The very name customer relationship management implies that CRM systems should include deep marketing automation functionality. But many CRM systems do not, and Salesforce itself disavowed responsibility for email blasting until it bought ExactTarget and Pardot a while ago.

At small companies, a surprisingly small proportion even have marketing automation. Many rely on mail merges or simple email blasting services coordinated via spreadsheet files, even though they have a CRM system.

The situation at many large companies is much more chaotic. I know of one technology company that had 84 different marketing systems along with dozens of CRM instances. So the idea that CRM is going to take over the territory of marketing automation is a reach for the Fortune 500, particularly those companies that grew through acquisition. For them, the key success factor is integration and database synchronization among their marketing automation and CRM systems. No amount of “best of breed” features will make a difference if their data is an uncoordinated mess.

For true Greenfield installations, however, it is actually best to have the CRM system perform the marketing automation functions. While buying best of breed for each system has advantages, if a feature really is valuable the CRM vendor will eventually implement it. So in the medium to long term, the costs of integration and database synchronization for separate best of breed systems is typically more trouble than it’s worth.