Marketing automation refers to a type of software that helps large, medium, and small businesses streamline their marketing efforts. It accomplishes this by combining a number of separate tools under one roof. Some of these tools include website builders, mass mailers, and CRMs. It is always tied to a sophisticated software platform that does the heavy lifting of analyzing, tagging, grouping, and number crunching behind the scenes.
For a small business, marketing automation is a game-changer. A well-executed campaign can help a company get organized, increase sales, and save a tremendous amount of time.
In this article, we want to clearly show how this type of software can help a small business succeed.
So, what is marketing automation and more importantly, how does it help? For the sake of example, check out this story about a hypothetical personal training small business that illustrates the incredible power of marketing automation.
Protein & Pushups - a marketing automation story
Picture a personal training business… we’ll call it Protein & Pushups (P&P). After five years of blood, sweat, and tears, owners Sally and Dave built a thriving small business that is experiencing solid annual growth. P&P currently employs four other trainers and a personal assistant. Over the years, they have accumulated about 1,500 contacts through social media sign ups, landing pages, business cards and their website. On average, P&P makes $300,000 per year in revenue.
Unfortunately, Sally and Dave are no longer doing what they love. What started as a passion for helping others live healthier, more fulfilling lives has turned into a daily grind to keep things afloat. Sally and Dave are excellent personal trainers, but have little experience in marketing and running a business. It seems that every year that passes, they spend less time doing what they love and more time buried in daily business concerns, like managing customer support, taxes, insurance, employees, equipment and more.
Additionally, Sally and Dave devote no time to nurturing potential customers and up-selling existing customers. They want to implement referral programs and provide additional resources for their current clients, but simply don’t have the time. Because of this, they fear that they are losing business.
Sally and Dave are stuck.
They wonder where the passion has gone and are debating whether it is even worth it. They are a prime candidate for a robust marketing automation program.
So how can marketing automation help?
Like the majority of small business owners, P&P is losing about 80% of their potential customers due to indifference. Sally and Dave know that they are leaving significant referral and follow-up revenue on the table, and potential customers are slipping through the cracks.
Sound familiar? Many small businesses are stuck in a similar situation. Let’s take a deeper look to figure out what is going on.
Stick with us on this, we promise it’s worth it!
Sally and Dave are not new to marketing. In fact, one of their most successful marketing campaigns is their monthly mailer. Every month, they mail 6,000 fliers to potential customers. Let’s estimate Sally and Dave pay about $1.00 for each flier. This means, every month they are paying $6,000 to reach new customers.
Over the years, they’ve honed the messaging on their fliers and have increased the call-back rate to about 2%. When they first started, it was around 1%. So, every month they can expect about 120 incoming calls (2% of 6000 fliers) from people who are potentially interested in personal training. If Sally and Dave are naturally gifted at sales, they’ll turn about 20% of those 120 inbound calls into actual clients. This means that they can expect to gain about 24 new clients every month from the flier.
Still with us?
So, how much does each one of these customers cost Sally and Dave? To keep it simple, we will assume that the $6,000 is the only cost for this campaign. Let’s take $6,000 and divide that by 24 customers. That means they are paying $250 per new customer.
That’s expensive! They better hope those customers stick around for a while.
But what happens to the remaining 96 customers who called but didn’t immediately purchase a personal training package? For P&P, the answer is: tragically, nothing. Sally and Dave are too busy to even think about following up with these 96 potential customers.
Most small businesses would also let these 96 interested customers slip through the cracks to never return and never purchase. These people expressed a tremendous amount of intent to purchase. But, like most shoppers, they want to purchase when they are ready, not when P&P is ready to sell to them.
TYPICALLY, POTENTIAL CUSTOMERS ARE NOT READY TO PURCHASE ON THE FIRST INTERACTION WITH YOUR COMPANY. THEY NEED TO BE “NURTURED” AND THEY NEED TO GET TO KNOW YOU. THEY NEED TO TRUST YOU.
Without marketing automation Sally and Dave have no means to stay connected to these 96 people so that when they are ready to purchase, they choose P&P.
What would happen if Sally and Dave collected the contact information of these 96 people to stay in touch? Perhaps every two weeks they send each potential buyer a helpful workout tip, a video, or a healthy recipe. Then, after one month, Sally or Dave give each of these 96 potentials a call.
It's simple: What happens is that a percentage of these 96 people become paying customers.
So, what is marketing automation and what can it ultimately do?
Out of these 96 interested people who didn’t purchase up front, let’s say that 10% purchase the next month due to the weekly email newsletter. That’s about 9 additional paying customers! The following month, they continue sending the newsletter to the remaining 87 people and obtain 8 new customers. And the following month, they bring in 7 additional customers. So, over the course of three months, they sold an additional 24 customers.
That’s a significant amount of new paying customers!
What’s the cost of acquiring these additional customers? $0.00 dollars. And how much time did they put into acquiring these customers? Beyond the initial software setup and a few quick phone calls, no time at all.
Marketing automation software help Sally and Dave increase sales and save time.
Additionally, P&P can now use the automated system to help strengthen and deepen their existing customer base by implementing automated referrals, upsells, and more.
Marketing automation helps small businesses succeed
What traditionally took an entire marketing department can now be completed with the use of sophisticated marketing automation software. Sally and Dave have more money, more time, more freedom and more impact.
Most importantly, however, Sally and Dave are back doing what they love!