Marketers today are under more pressure than ever to deliver bottom-line results. This series sponsored by Autopilot explores how essential automation has become in that pursuit and the many ways it’s evolving to shape the customer journey from acquisition through to greater lifetime value. Check out the whole series here.

How do marketers know if their marketing automation investment is paying off? It’s a good question, with a quantifiable answer: you’ll be able to show them the money.

At its core, marketing automation is about attracting, acquiring, and growing customers. But unlike other awareness-generating aspects of brand development, nurturing is a funnel-driven process of education with a purpose.

As a framework, envision ROI as being built on a trio of pillars:

  1. New revenue
  2. Reactivated revenue
  3. Expansion and retention revenue

New revenue ROI

A new revenue scenario applies equally to both B2B and B2C companies. Here’s a way to look at measuring the financial impact of your automated marketing efforts. Let’s say a SaaS business typically gets 1,000 leads a month. If they currently convert 10 percent of these leads into paid accounts, that’s 100 new customers per month.

Through automatic lead nurturing, a 5 percent to 8 percent increase in lead-to-win conversion rate is very possible, and this adds another 25 customers to our hypothetical company with 1,000 leads/month — a significant boost to ROI.

In our example, the company not only increases lead-to-customer conversion rates from 10 percent to 12.5 percent, they also increase average customer value from, say, $150/month to $200/month. Together, the incremental 25 customers and $50 monthly revenue per customer, adds a healthy $10,000 to the monthly revenue stream, or $120,000 each year. That’s a return on investment that pays off extremely quickly.

Reactivated revenue ROI

The second way lead nurturing generates measurable revenue for a company is through reactivation. Every company has leads that have languished and fallen off since their first contact. Systematically nurturing, educating, and essentially harvesting these leads will motivate many contacts that have inquired — but not been ready to purchase upfront.

According to Gleanster, only 25 percent of leads are ready to engage today. However, of the remaining 75 percent in the pipeline, about half will be ready to re-engage within the coming twelve months. This is why it’s so important to stay top-of-mind with those who don’t purchase immediately.

Begin with the leads in your contact database. Suppose you have 100,000 leads. Industry benchmarks show that about 3 percent of leads should reactivate by re-engaging with your sales team or signing up for an account within a given year.

Of these 300 re-engaged leads, typically 15-25 percent will become new customers. Using the figures in the first example, this amounts to 45 new customers, which at an average annual customer value of $2,400 ($200/month x 12 months), is $108,000 reactivated revenue.

Of course, even without nurturing, inactive leads or people who have inquired before will naturally re-engage with a brand or company if they’re interested. But by becoming a trusted resource for a future buyer — offering good value, tips and tricks, industry best practices, and trends — and being consistent in your approach, the likelihood of someone reactivating in response to one of these nurturing emails or pieces of content rises dramatically.

For example, approximately 8 percent of Autopilot’s new monthly leads come from nurturing old leads, including non-converted trials, web inquiries, white paper downloads and webinar attendees, or CRM contacts. This metric is comparable to that of other B2B SaaS businesses, such as Zendesk, that extensively nurture their leads with helpful content designed to educate, not sell.

Expansion revenue ROI

The third pillar for attaining revenue ROI from marketing automation is growing and retaining your existing customers. With SaaS, for example, monthly revenue churn typically ranges from 1 to 4 percent, and expansion revenue from 3 to 6 percent. Increasing revenue retention or expansion rates has a dramatic increase in customer lifetime values (CLV).

So how can you achieve this? Automating the onboarding experience is one way to accelerate the time in which new customers grasp the concepts of a product, achieve results, and stay engaged as a successful, repeat customer. Delivering a series of in-product tips, or offers for a consultation with a customer success manager, or “getting started” guides personalized to the customer’s stage of usage, are examples of how to deliver exceptional experiences at scale.

Wearable camera company Narrative halved their new customer onboarding time through automation, by tailoring their communications based on whether their customers had logged in to their mobile app, uploaded their first batch of photos, or both. This has resulted in competitive satisfaction rates for those customers, who in turn have spread awareness through word of mouth referrals.

It’s axiomatic that people who have a highly satisfying onboarding experience will drive new revenue growth, which can substantially boost your bottom line. According to the White House Office of Consumer Affairs, loyal customers are worth up to as much as 10 times more than their first purchase.

Other ways to grow your customer lifetime value and to increase revenue from existing customers include running nurturing journeys that offer:

  • Product news and updates
  • Training webinars and customer events
  • Thought leadership or best practices content such as reports, guides, white papers
  • Instructional videos
  • Campaigns and promotions associated with the launch of a new product, service or plan (e.g., a new enterprise service or consulting service — or launching a new version of a signature product, such as Narrative’s wearable camera).

Customer care remains king

It’s important to emphasize that while marketing automation itself drives customer acquisition, reactivation, and retention, it also helps by focusing the attention of cross-functional teams to be more customer-centric. The benefits include generating content for sales, employee training, best practices, and company values. Having marketing automation teams intent on training and educating their customers builds a more customer-centric culture. It’s the Golden Rule of smart business.

As best-selling author Gary Vaynerchuk writes in The Thank You Economy, “There is proven ROI in doing whatever you can to turn your customers into advocates for your brand or business. The way to create advocates is to offer superior customer service.”

When you do, your marketing automation will pay off in spades.

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