David Raab and Atri Chatterjee Talk About Marketing Automation, Part I: What Do You Need in a Core System?

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Marketing Automation

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Act-On Sales & Marketing ConversationsEditor’s Note: David Raab has thirty years’ experience as a marketer, consultant, speaker, and analyst. He’s the author of The Marketing Performance Measurement Toolkit, and the Raab Association’s reports and guides, including the B2B marketing automation vendor selection tool, the VEST report. You can keep up with David at his blog, Customer Experience Matrix. Atri Chatterjee is Chief Marketing Officer for Zcaler.* This is an edited  transcript of the Conversation they held, which you can listen to on the audio player below.




ATRI:            There’s been so much information about new marketing techniques and technologies. It’s really easy for a marketer today to get utterly confused and overwhelmed. What advice can you give a digital marketer today about how to approach the market, and what are the key things that they should think about as they’re getting started with this?

DAVID:         It’s an overwhelming landscape with overwhelming numbers of options and choices that marketers have to make when it comes to technology. Let’s never forget that we became marketers because we didn’t want to be technologists. But it’s chasing after us and catching up – even if we wanted to be poets.


The core system could be hub-and-spoke

Raab headshotDAVID:       As a marketer you have to try to simplify these things. You can’t follow 1,000 different products. Honestly it’s hard for me to keep up with the couple dozen in the spaces I track personally. You have to try to pare things down and think about what really matters. I see a hub and spoke model with a core product or core platform, or a couple of core systems that you’re going to run your marketing through primarily. Then you surround them, like spokes radiating out from those hubs, with other systems that might do more specialized things: an SEO tool, a content recommendation tool, a video engine, or a survey tool, and so on. That’s where all the different vendors are, in those little supplemental tools.

And you can’t use all of them; you wouldn’t want to use all of them, you don’t need to use all of them. What you do need though is to have a basic core that does the important things that you can then plug other things into. So what’s in that core is the next question.


Data is the hub

DAVID:       The foundation of it all is your data. You need something that maintains a good database, and that’s not a trivial requirement. A lot of systems that are designed for marketing were really designed not to be a core database, but to do a specific thing – to be an email system, to be a website management system, to be a social media management system. They were designed to hold only the data that particular application required.

If you decide to use a platform for multiple applications, then you need a database that’s a little more flexible than that. It needs to be able to store data that some other application needs – and wasn’t part of the original application the platform was designed to support. It’s a critical foundation. Look at that database and make sure that it can support your needs today and what’ll probably be your needs tomorrow. And since you don’t actually know what your needs tomorrow will be, it’s just got to be flexible.

ATRI:            That data store needs to be able to integrate well with other sources of data, because data comes from multiple places in a marketer’s life. All these different sources of data need to be able to integrated and brought into that data store.

DAVID:         Yes, absolutely. Great point. The platform is not going to use only data that the system generates for itself. Let’s say it does email, it’s obviously going to send email and keep a history of what it sends out, and it’ll get back things like click throughs. But it also should be capable of importing data (if we’re talking B2B) from a CRM system, or from a web system, or from any number of other systems, social tracking systems, all those kinds of systems.

So you need a system that has those data import capabilities usually through an API at this point, as opposed to just batch, but really you need both. It’s also got to be able to let other systems access the data, again through either an API or file transfers or queries. The goal is simply to make sure that you can get all the different kinds of data into the system, and all the different kinds of data out of the system for all those different sources, so that it can be available to use as a central platform.


About those spokes…

DAVID:       Now we move a little away from the hub out to the spokes. Some of the spokes will be built into the system. You’re really not going to find a marketing automation system today that doesn’t do email. Some do it better than others, but they all do it. So that’s going to be baked in, even though from a structural or architectural standpoint that’s an application.

There may be other things. The typical marketing automation system has email, landing pages, behavior tracking, and a couple of other standard features. Now, not everybody needs all those features. It’s hard to imagine somebody doesn’t do email, but there may be other things that are built into the system – let’s say social – that your particular company isn’t all that interested in, for whatever reason.

So you have to look at the combination of features in the single system, including the central data management platform and at least a few core applications that you’re going to want to run. Then look for the openness that you were just talking about: connecting with other things that you might find down the road that you want to do, or you know you want to do today. They won’t necessarily be built into the product, but you want to be able to connect to them.


Make technology decisions that support the business strategy

Atri ChatterjeeATRI:            It seems, David, that in order to be able to figure out what that core set of things is, you start by asking “What’s my strategy, how am I going to get started, and how am I going to go from there?” It’s almost like step zero.

DAVID:         Absolutely. Any major business decision needs to be aligned with the company’s high level business strategy. It’s not something that you think about on a day-to-day basis, but at any good company, at least the senior folks have a very conscious articulation of what their strategy is. The three core strategies classically are high quality, high customer service, or low price.

You need to have an understanding of what kind of a strategy your company is following, so then you can then acquire marketing technologies that are consistent with that. So if you are a very high quality operation, you want to have systems that support very, very sophisticated customer contact. If people are really buying from you for low price, you still have to give them good service and deliver good products. But, if you’re an airline, they’re not going to expect the same things that they get on British Air or Singapore Air, the flagship quality airlines, that they get on Southwest. They know there’s a tradeoff.

“Strategy tells you what not to do. That’s really what strategy is about, it’s about resource allocation. As marketers we like to do everything. You need the discipline to say, This is what I’m going to focus on, these are the things I’m going to do really well, and these are the things that I’m just not going to do.”

—David Raab

ATRI:            It’s interesting you put it that way because oftentimes as marketers we don’t necessarily bubble up all the way to the top level of the company’s strategy, and then take it down from there to the marketing strategy that supports the company’s strategy. We don’t necessarily think how that translates into, say, the type of audience that I’m going after and (therefore) what sort of mechanism do I need to be able to interact with that audience? Oftentimes a lot of us marketers just jump right into tactics.


Tactics, and shiny objects, and what not to do

DAVID:         Right. It’s easy to jump into tactics. And don’t misunderstand: the strategy discussion is only about the first five minutes of the hour. It’s a fun discussion to have, but it’s just a starting point. Make sure you get past that first stage to the more practical things. But strategy does tell you a lot. If you start with strategy, there are a great many things that you can infer from your strategy that answer a lot of questions.

Okay, now we know our strategy. Now how do we build the technology and infrastructure that’s consistent with that strategy? So again, what are the customer expectations that I’m trying to meet? Do I have to be in all channels? As marketers we like our bright and shiny things. “Oh, Pinterest. Everybody’s in Pinterest.” Well, maybe Pinterest doesn’t make any sense for you and your strategy. Don’t just do it because it’s cool. Do it because it makes sense.

And how do you know if it makes sense? This brings us back to strategy: strategy tells you what not to do. That’s really what strategy is about, it’s about resource allocation. As marketers we like to do everything. You need the discipline to say, “This is what I’m going to focus on, these are the things I’m going to do really well, and these are the things that I’m just not going to do.”

ATRI:           There are some key things that I need in my foundation, as I’m looking at my digital marketing strategy. I need a platform, I need a database; I need those names and to have a good way to manage them. And then I need one or more ways to communicate with those folks and track those communications. These seem to be the core things.

Beyond those, you had mentioned a couple of things maybe I need to be able to do, things like nurturing and scoring. Can you talk a little bit about that, and at what stage marketers are thinking about things like that, and what should they have done before they get to that next level of capability.

DAVID:         You can think of it as a hierarchy of needs. The first thing is to get the messages out there, and to track the messages. To target the message is very, very important. The next thing probably is a feedback loop so you can see how the messages are working, how they’re getting responded to, because you can’t learn if you just push messages out and don’t have some way of tracking response. Now again, the issue today is that we have so much data and so many options that it’s easy to be swamped by data. Think of it in terms of marketing automation, email, landing pages, response tracking, database itself, maybe ad buying.

Advertising as part of the core mission, if not the core system

DAVID:         Ad buying is a critical requirement for most marketers. It’s not necessarily done within a marketing automation platform, at least today, the way marketing automation systems work. But we’re seeing an increasing convergence between the more traditional outbound marketing automation style of marketing and ad buying, which has traditionally been done separately. Because we can track who’s seeing our ads and we can target our ads so much more closely, ad buying and ad management begins to look more and more like traditional direct marketing to identify customers. That has to be part of the marketing department’s core mission – whether it’s part of their core system or not. So you want to be able to integrate that as well as possible.


Customer relationship management systems

DAVID:         Once you get beyond that, then you do things like CRM integration. Maybe you need it, maybe you don’t. If you need it, you really need it. But not everybody needs it and not everybody has a CRM system. Sometimes CRM and marketing automation are the same system to the very small companies. More often they’re separate systems because there are separate users and separate sets of needs.


Lead scoring and lead nurturing

DAVID:         Lead scoring is another thing that not everybody does or needs. Maybe you don’t do it at first if you’re trying to get the system up and running effectively. But again, if you need it, you really need it.

Lead nurturing to me is a core function. I wouldn’t imagine that there’s a marketing department that doesn’t need it. But that goes back to your strategy. If you’re in a business where people buy right away, then you don’t have to do lead nurturing. So it just depends again on what your business needs are.



DAVID:         And then there are things that not everybody does, or that you can get perfectly get good standalone solutions for and don’t necessarily need to integrate with marketing automation all that closely. SEO is a good example. There are lots of good SEO tools. It’s nice to have it integrated with your core marketing system; there are some advantages. But honestly, if you use a separate SEO system, in most cases that’s just perfectly fine and doesn’t really hurt you that much.


Useful capabilities often outside the core

DAVID:         Lead distribution is another thing that’s on the border between marketing and sales. One or the other can do it. Simple content management is useful; obviously marketing has to manage its own content, create its own emails and such. But if you wanted to do more advanced content management, that usually is done outside of the marketing system. And that can work out just fine.

There are also different kinds of marketing administration, including budgeting, scheduling, project management, task reporting, staffing, and so on. Again, some people really need them. If you’re a giant company, you need them desperately. Little companies often don’t need them. Or if they do, they might use a separate system that’s just barely linked to marketing. There are a number of things like that, that are definitely not core.

ATRI:           Right. That goes back to your hierarchy of needs, which is: At the core level you have the basic needs, and then you can go beyond that, with more and more things that are nice to have. You mentioned CRM systems as not in that core set, but in the next level, because not every company needs CRM, especially if they’re not a big company. It goes back to that interesting point that you make which is: start with a database, and if you’ve got a good marketing database system in place, that could double as a CRM system – at least for smaller companies.

And then the other interesting thing is the tertiary stuff that you mentioned, such as budget management, and whether you put that into the system. Our customers have often thought of those capabilities as being more enterprise-oriented, with centralized control and a single system to manage it all. But oftentimes in small and mid-size businesses, that’s not needed at all, at least to start off with. They’re quite happy doing it with an Excel spreadsheet and then reconciling things later.

DAVID:         Well, I don’t know if “happy” will be the word for doing it in Excel, but they’re willing to reconcile.

ATRI:           They’re willing to do it in Excel.

DAVID:          Probably that’s the right word. [LAUGHTER]


Counting the things that count

ATRI:            What are your recommendations to marketers for how they measure and continue to improve?

DAVID:         Measurement is so important and it’s so easy to forget to talk about it. (This from a person who wrote a book about marketing measurement …) It’s figuratively the tail that should wag the dog, because the measurement should tell you what to do. But it often just gets forgotten about and tacked on, which it shouldn’t. [LAUGHTER]

ATRI:            My theory on metrics is start small, start doing some measurements; that’ll give you insight into how to do it better and what else you need to measure.

DAVID:         If you can ease into it starting small, that’s terrific. But the real challenge – and the mistake that most people make – is that they look at tactical metrics like response rates and click through rates, which are easy to measure. It’s like the guy who loses his keys in the alley, but looks under the lamppost … because that’s where the light is better. So they measure the things that are easy to measure, not the things that really matter. And you could say, well that’s good practice [LAUGHTER] because at least you’re looking at something. But often those metrics are not really telling you what you need to know.

So you have to have a little bit of discipline and at least think in terms of measuring things that actually relate to the value that you’re creating as a marketer, which can be as simple as number of new customers. It doesn’t have to be complex metrics. It doesn’t have to be some sophisticated lifetime value projection, or even incremental return on investment. That’s what it should be. As a metrics guru that’s what I want people to do and that’s what I want to do. But I know it’s hard.

Measurement is so important and it’s so easy to forget to talk about it. (This from a person who wrote a book about marketing measurement …) It’s figuratively the tail that should wag the dog because the measurement should tell you what to do.

—David Raab

Find something that at least will correlate effectively with long term value, which could be customers, or the value of the customers. I’ve seen people – this came up in a survey we just did – looking at marketing to sales conversion rates, which is a pretty good measure of the quality of the leads that marketing is handing off to sales.

Things like that are going push you in generally the right direction, give you sort of the right signals. They may not tell you exactly where you want to be, but at least you’ll be heading east when you should be heading east, not heading south. So I would say, yeah, start simple, but start simple with value measures and refine those. Then expand to other metrics that maybe are measuring behavior at different stages in the life cycle, not just conversion from marketing to sales. This means defining the stages in your funnel while the lead is still within marketing. Things like that which you want to be able to measure because they’re directionally correct. And that’s what’s really important.

ATRI:            As you point out that’s a starting point, and if you can get that going, you get the directional data there. Then, I think what ends up happening is that you start finding out about what more you need to get better and better insight. That sounds like a great start.

Read Part II of this transcript: “David Raab and Atri Chatterjee Talk About Marketing Automation, Part II: How to Acquire and Succeed with It.

*At the time of this conversation, Atri was Act-On’s CMO.