As a marketing leader, I’ve personally used, shopped for, or migrated between marketing automation platforms nearly every year during the last decade of my career.  If like me, you’ve been in the marketplace for these packages, or have implemented them, you’ve asked yourself these same questions:

“Before we introduce this advanced tool, how solid is the understanding of our buyer, their behavior and our marketing and sales process?”

“Once we deploy, do I have the right skills on staff to keep this baby rolling?”

“Which one do I go with?  I’ve heard Platform X is better than Platform Y for social media? Also, they say Platform Z has better usability?”

But maybe the question asked more earnestly when buying, and again every year or two when it is time to renew: “Why is this so damned expensive?!”

I know that for many teams, the investment in their marketing automation platform is nothing to take lightly.  I’m sure you find yourself looking both ways before committing to another multi-thousand dollar contract.

 

Is it really expensive (or are you just cheap)?

Yes, it’s expensive (and yes, ask my teams, I’m cheap).  The question is, of course, relative.  In my last role, our automation solution was responsible for about ~7% of our total marketing costs and increasing year-over-year.

Depending on your organization size and a ton of other factors, marketing automation platforms typically cost anywhere from 3-7% of your marketing program budget.  If you start taking into account the things beyond just the subscription, these costs can become greater.  Software upgrades, maintenance, planned subscription increases and add-ons pile on.  And don’t forget the staff required to operate it. Adding all of these factors and push costs up to 40% of your marketing budget.

No matter the percentage of your budget marketing automation might gobble up, it’s more a matter of ensuring you are getting real value from the investment.  Who cares what it costs if it’s paying for itself many times over?

So bottom line – if you don’t build your processes and systems in way to be able answer the single focused question of “what ROI are we getting from our marketing automation?”, then don’t bother.  It will be hard to fight for renewal of this tool with your fellow organizational leaders in tough times if it’s not directly driving business, or at least tracking the results of your marketing.

 

What are the big costs outside of the software?

As I mentioned above, it’s not just the subscription, but the add-ons, renewals, etc. that will increase your cost.  Make no mistake, a greater cost will probably come from operating the software.

No matter which platform you choose, whether $250,000 or free, you will have to configure the software, integrate it with your website and CRM, migrate contacts and content, build programs and logic – the list goes on and on.

 

You should plan on having at least one headcount, it not a few: 

A marketing operations manager is a must-have, no doubt. They will be the guru ensuring content is being sent out, things stay organized, and building the logic to keep programs running and the data clean inside of the marketing automation platform.  They should be the local expert on best practices and be solid at properly tending the marketing automation garden.

An analyst might be a great added role, and in a small team, perhaps a headcount that you can “share” with Sales.  This role can support the marketing and sales process and get a handle on the data as it flows through from the website, to the marketing automation platform, to the CRM, and through the entire sales process.  This is the backbone that allows for real efficacy in reporting in a sales and marketing organization. We lost our analyst once and was unable to backfill the position and it was quite painful watching our data cleanliness and process hygiene slowly break down.

And don’t forget the content people.  It’s assumed you have the creative staff in your shop or outsourced that can crank out compelling premium assets, emails, landing pages, blogs, and other content that it will take to keep your audience fed.  If you don’t have content to do content marketing, then yeah, consider marketing automation a non-starter.

Is it worth it?

People wouldn't be throwing big bucks at this technology every year if it’s not worth it.  If you are not engaging your customers and prospects across multiple channels and methods, and are unable to track what it is you are doing, then you are marketing on hope.  You may be clever and have great materials, but how can you ensure it’s getting into the right hands, driving the desired behavior, and PROOF that your marketing efforts are driving revenue?

The tool itself does nothing, though. You’d better approach the initiative with a clear set of goals and a deep understanding of your buyer and their buying behavior.  Without these key inputs, you may find yourself swimming with a very expensive anchor.

What can be done to mitigate the cost?

Have a plan that includes a growth strategy. Whether you start - big or small, you need to know what growth will mean for you.  Platforms charge for a mixture of database size, emails sent, depth of functionality and other factors.  You should play some hypotheticals as you price these systems out with the sales folks – you’d be surprised what things like DECENT reporting will set you back when you start talking add-ons.

Shop around. There are lots of these providers and they are cannibalizing each other to a certain degree.  That being said, they are professional salespeople, and have good ways to distract you and ensure it is hard to compare apples to oranges.  

Consider open-source technology.  There are a few hot, up-and-coming automation platforms that are completely free and open source.  This doesn’t reduce costs in configuration, migration, or ongoing daily costs of managing the platform – but to eliminate massive licensing costs can help to support those other areas – freeing up resources for other items in the marketing budget.

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