Why Marketing Automation is Growing Stagnant and 5 Ways to Boost It


The marketing automation software industry is entering its 13th year. The industry really hit its stride in the early 2000s with the introduction of the SaaS model. Today, there are many vendors – sometimes a new one every week – competing for a piece of the market.

Currently, the industry has a combined annual revenue of under $150 million dollars. To put this in perspective, let’s look at some of the other verticals. Sales Performance Management has over $1B, and Customer Relationship Management (CRM) is a $10B+ industry. In comparison, it seems that marketing automation solutions are struggling to gain broad acceptance and appeal.

Jeff Pedowitz, President and CEO of the Pedowitz Group, contributed an article to Marketing Automation Softare Guide where he discusses why this market is underperforming and 5 ways to ramp it up. You can read it in its entirety here, but the main points are outlined below.

The reasons he lists for the floundering marketing automation market are as follows:

  • Marketing automation seeks to empower the marketing executive, the member of the management team with the least power to buy.
  • There is a lack of penetration into vertical markets and the B2C space.
  • There are a ton of vendors in the space, but not enough collective education.
  • The systems are typically too complicated, going beyond the skill set of the average daily user of the software.
  • The pricing model is based on contact database size, rather than user licenses.

In order for this market to see some serious growth, Pedowitz suggests the following solutions:

  • It’s time to start selling to executives outside of the marketing department.
  • Vendors need to work with partners and value-added resellers (VARs) to expand their vertical offerings.
  • Vendors need to work together to improve education on the software and best practices.
  • The software needs to be simpler – best practice templates, one-click activation – to drive adoption by the masses.
  • The pricing model needs to be more varied, with options such as free trials and use now, pay later models that will get the software into the hands of the customer.

This market is still relatively nascent. It will be interesting to watch it develop, particularly if vendors heed this advice.

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One Response to “Why Marketing Automation is Growing Stagnant and 5 Ways to Boost It”

  1. jodie_microsoft_smb says:

    The Microsoft Dynamics Marketplace can help you find specific enhancements to go with the Microsoft CRM solutions. You can do a keyword search to bring up the options that are available. This link will get you started with “marketing automations”: http://smb.ms/OutreachhnB7gW

    Regards,
    Jodi E.
    Microsoft SMB Outreach Team
    msftoft@microsoft.com

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