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We Have Lift Off: Marketing Automation is Taking Off!

Houston, Houston, we have lift off!!! Marketing automation is taking off. David Cummings wrote a nice article on his blog the other day about the coming wave of marketing automation adoption. The post clearly lays out the opportunity for marketing automation vendors like Lead Liaison. More importantly, businesses have a great opportunity to bring new technology in house to improve efficiency and drive revenue, faster. David identifies the gap in companies using CRM systems but not marketing automation systems. He references the following figures for CRM usage:

  • Salesforce.com: ~140,000
  • SugarCRM: ~10,000
  • Microsoft Dynamics CRM: ~40,000
  • Netsuite: ~13,000
  • Total: ~200,000 companies
David points out that 9,000 of these companies also use a marketing automation system. That’s a 4.5% penetration rate, leaving 95.% of companies not using marketing automation. In David Cummings post he only considers the opportunity for companies using a CRM. Believe it or not, but many of Lead Liaison’s customers don’t use a CRM at all. Looking at some numbers provided by a leading analyst in the space, David Raab, we see these figures are consistent with those reported by David Cummings; however, David Raab uses a broader scope to segment all businesses in the US with more than $5M in revenue into three categories, small to mid-size, large and enterprise companies and look at installs/adoption across each segment:


By looking at this data we see only 6% of all businesses more than $5M in revenue use marketing automation. The lowest penetrated space is the $5M to $20M range. Only 9% of all companies $20M to $500M use marketing automation. About one out of every three enterprises use marketing automation. Assuming an average selling price (ASP) of $10K for small to mid-size companies and $30K for large businesses, that leaves $4.4B in total available market (TAM) for marketing automation vendors. We’re excited about the growth opportunity here at Lead Liaison and look forward to having all of our new customers take our marketing automation platform to the next level.

If you’d like to see a demo of Lead Liaison’s marketing automation system for your business contact us!

 

Marketing Automation Market

Marketing Automation MarketLast month we wrote an article on the size of the marketing automation market. A couple weeks after writing the article we picked up David Raab’s article on “B2B Marketing Automation Industry Size and Segments”. David’s post presented some interesting data on the marketing automation market worth summarizing as a follow up to our last post on the industry.

The report shed some light on how many clients per company type are using marketing automation. Company type was split up into four categories using revenue ranges, defined below:

  • Micro business: Under $5M in revenue
  • Small business: $5M – $20M in revenue
  • Mid-size business: $20M – $500M in revenue
  • Large business: $500M+ in revenue

The report then estimates annual revenue of the marketing automation market for each segment, yielding $257.5M in annual revenue, which comes very close to our estimate of $200M in last month’s post. David’s estimate does not include smaller marketing automation vendors as well as B2C marketing automation vendors. When these vendors are included, the marketing automation market is around $325M in annual revenue.

Here’s a breakdown of estimated revenue per company type:

Company Type Customers Revenue/Client/Yr Annual Revenue % Total
Micro business 11,917 $3,600 $42.9M 17%
Small business 2,848 $12,000 $34.2M 13%
Mid-size business 3,609 $30,000 $108.3M 42%
Large business 1,203 $60,000 $72.2M 28%
Total 19,557 $26,400 (Average) $257.5M 100%

Experts typically estimate about 2% to 5% of all businesses use marketing automation technology. Interestingly, actual penetration may be lower than that – particularly very small businesses (<$20M in revenue). It’s estimated that less than 1% of all micro and small businesses use marketing automation technology, which presents a huge opportunity for these businesses to grow and gain a competitive advantage in the market place. Using data from Manta about the number of companies in each revenue range we can estimate approximately half of all businesses are a candidate/fit for marketing automation. Based on this data we can estimate the footprint of the marketing automation market relative to the TAM (total available market).

Segment Companies TAM Customers % Total
Micro business 2,991,627 1,500,000 11,917 0.8%
Small business 645,121 320,000 2,848 0.9%
Mid-size business 237,130 120,000 3,609 3.0%
Large business 9,245 4,500 1,203 26.7%

Growth potential in the marketing automation market is huge. Micro and small businesses outside the manufacturing and high tech industries (current adopters) stand to gain the most.  Lead Liaison uses marketing automation technology as part of our Revenue Generation Software. If you’re a business looking to adopt marketing automation below are a few additional resources to help:

  • Risk of not using revenue generation software
  • Revenue generation for marketers
  • Revenue generation for sales

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