Breaking through the noise requires coordinated communication to attract prospects, turn them into leads and ultimately convert them into buyers. Phil Fernandez, CEO and co-founder of Marketo, likes to think of marketing automation as the orchestra conductor and he firmly believes in that old saying, “It’s cheaper to keep a customer than to acquire a customer.”
In this interview, Phil spoke with Brent Leary about how the sweet music of marketing automation can simplify the process for even the smallest businesses.
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Phil Fernandez: For the last 20 years I have been working on the intersection of technology and marketing. I have seen the need for technology to support modern marketing and the great opportunities to develop products for companies large and small. We started Marketo about four and half years ago with that goal and it’s been a wonderful success story.
Small Business Trends: You started out focusing on marketing automation. Has marketing automation been the focus of a lot of small businesses you have come in contact with? Should it be?
Phil Fernandez: My co-founders and I had been working on marketing for big businesses and the idea of Marketo was that small businesses were being left aside as technologies developed on the higher end. We wanted to take advantage of how accessible technologies are now, [thanks] to the on-demand, Web app model, and build a product for small businesses.
Small Business Trends: What are some of the biggest impact areas marketing automation has on a small business today?
Phil Fernandez: All buying today starts on the Web and on social media. The first thing people do if they are going to buy something is go online, ask their friends on Facebook and read websites. All of those prospective buyers are hanging out in these forums.[For] a small business, how do you find and engage with those buyers? You have to be found by them, which means you have to excel at search engine optimization. Part of the trouble is you have to pay to do those things–you have to pay to advertise on Google. So you need to make sure that every time you pay to find buyers, you convert them into people who actually do business with you. That is where marketing automation comes in.
For example, if you are spending $500 on Google Ads, you need to be sure you convert that click into revenue. Spark by Marketo, our product, helps our customers turn that click into a lead, then into revenue.
Small Business Trends: There are so many different channels of communication between a company and a prospect. How does automation help organize communication and make sense of it?
Phil Fernandez: Customers are inherently multichannel creatures. They go on the Web; they do email; they go to trade shows; they get phone calls. All of that needs to make sense to the customer or it becomes incoherent noise. I like to think of marketing automation as the orchestra conductor.
If somebody comes to your website, how do you follow up with email or a phone call later that shows that customer you know them better because you talked to them on the Web before? We provide that cross-channel communication and coordination, as well as the analytics that help you get to know that customer better.
Small Business Trends: How does automation help marketing connect with sales at the right point with the right person with the right offer?
Phil Fernandez: Marketing tends to meet the prospective buyer first. By understanding which prospective buyers are most active and engaged, they can bubble to the top the people who are most likely to be good candidates for sales. Then if Marketing can hand those names off to their sales team, salespeople can be far more effective.
Small Business Trends: Let’s get down to ROI. How can you measure the impact?
Phil Fernandez: ROI can be really simple. For example, one of our customers is a company called ShipServ that does about $800 a month worth of Google Marketing. They buy AdWords, their prospect customers click on their ads and come to a landing page. If that page is relevant and engaging, it’s much more likely that that prospective buyer will [provide the information] to enable further contact.
We make it really easy so if somebody clicks through on one of your ads, you can send them another message a day later that reinforces that interaction that happened the day before, which can make Google Advertising four times more cost effective for a small business. That can pay for our entire system right there.
Then if you continue to build more relationships and extend to other channels, you keep building upon that initial effect. We have customers that get 20 times more leads and have grown by as much as 40 percent.
Small Business Trends: How does marketing automation help extend the relationships you have with current customers?
Phil Fernandez: Marketing automation is really customer interaction automation. That old saying, “It’s cheaper to keep a customer than to acquire a customer,” is true, and it means you need to keep your customers stay happy. Stay in communication with them and know how to seize the moment when you can present that customer with an offer, an upsell or a cross sell.
We encourage our customers not to think about using Spark by Marketo as just a customer acquisition tool, but as a way to cost effectively stay in touch with their customer base over time and build deep customer relationships.
Small Business Trends: A year or two years from now, how will small businesses be using marketing automation to engage customers?
Phil Fernandez: These tools have historically been the province of the world’s largest companies. But with products like Spark by Marketo, all those powerful tools are simple and cost effective for small businesses because they can be bought and used on the Web without buying software or making a long-term commitment. In one or two years I think hundreds of small businesses will be using very sophisticated marketing automation technologies to grow.
Small Business Trends: Where can people learn more about Spark and Marketo?
Phil Fernandez: You can find out about Spark, our product for small business, at SparkByMarketo.com.
This interview is part of our One on One series of conversations with some of the most thought-provoking entrepreneurs, authors and experts in business today. This interview has been edited for publication. To listen to the full audio of the interview, click the right arrow on the gray player below. You can also see more interviews in our interview series.
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