Measuring the Effectiveness of Marketing Automation: What You Need to Know
Automation – it’s been touted as the future of marketing, particularly given the rise of AI and machine learning. It’s true that automation can provide you with some pretty significant benefits, including time savings. However, without careful oversight, it’s possible that your marketing automation may not be delivering the benefits that you deserve. How do you ensure that you’re getting the ideal ROI from your automation solution? We’ll discuss some of the most important metrics to measure below.
The Challenge with Measuring Automation
Automation is supposed to put many of your marketing activities on autopilot, ensuring that they continue to operate even without direct, constant human supervision or intervention. It’s supposed to help avoid errors that human beings are prone to making, and to improve responsiveness while simultaneously saving you money. However, it can be difficult to determine if marketing automation is actually doing what it’s supposed to do. In fact, the majority of marketers who use automation solutions do not know how to measure its performance or effectiveness.
One challenge here is that issues within your organisation could be part of the problem and may make measuring effectiveness difficult. For instance, poor audience segmentation or not knowing whether your current win rate is acceptable could muddy the waters. If your content marketing collateral is lacking, that could also cause problems. Finally, choosing a less than reliable automation software could also create issues, particularly within the data produced by the software.
The Metrics to Consider
When measuring marketing automation effectiveness, you need to focus on a few core metrics. These include the following:
- Revenue Growth – While revenue change is not the end all be all when it comes to marketing automation effectiveness, it is a good yardstick to start with. Determine your revenue growth prior to implementing the automation software, and then compare that to your revenue growth post-implementation. If you do not see higher growth occurring after implementation, then there is something wrong.
- Segment Activity – Segmentation is a key consideration with marketing automation software. Check the level of activity in each of your segments. If you see low activity, then chances are you’re suffering from poor segmentation (not the software’s fault).
- Overall Activity – Implementing marketing automation software should provide you with a significant increase in overall email sending activity. If you do not see such an increase, then your software is not working as it should.
- Number of Automation Workflows – A workflow is just another name for a segment of a customer’s journey. As your software works on your behalf and more consumers start their journeys, the number of automation workflows should increase. If you do not see such an increase, it is a sign that there’s a breakdown somewhere.
- Open Rate – An increase in your email open rates tells you that your automated emails are doing a good job of not looking like automated emails. Few people bother opening those messages, similar to junk mail in the real world. The better your open rate, the more effective your automation software.
- CTR – Click-through rate, or CTR, tells you how many people click the link(s) within your email to land on the destination page. If you’re seeing low CTRs, then you may need to consider conducting A/B testing to improve your software’s effectiveness.
- Site Traffic – In most cases, your marketing will be designed to increase traffic to a specific site, whether that’s your main site or a microsite. Make sure you have the tools in place to measure site traffic and determine if the levels you’re seeing match what you predicted.
- Conversion Rate – When it is all said and done, marketing automation software should improve your conversion rate over time. However, it could be a slow shift, so you’ll want to check it periodically over a length of time. With that being said, if you’re not seeing any increase in your conversion rate, you’ll need to dig into the situation and find out where the breakdown is occurring.
These are some of the most important metrics to consider. However, there are others that also matter, such as your reconversion rate (existing customers making a repeat purchase), and the like. In most cases, if you’re experiencing a breakdown, it most likely stems from poor audience segmentation.
Even with AI and improved machine learning, segmentation is still something that is best handled by human beings, but many marketers drop the ball here. Therefore, if you’re noticing problems, begin with re-segmenting your audience and then test again. You should also consider A/B testing to make sure that you’re using the right messaging with each segment.
Marketing automation can be a powerful tool, but it is not fool proof, and human oversight is still needed.