The Marketing Automation category has been simmering to a boiling point for at least the last three years.
Vendors are heavily focused on the land grab for market share and investors. Unfortunately this is a traditional point in a cycle where customer focus often falls to the wayside. The pace of innovation can slow down when investment funds are primarily directed towards sales and marketing efforts.
What drives this? Investors primarily.
- Investors want maximum equity the least amount invested. The more cash raised the more equity they want.
- Investors want their portfolio companies to increase market share as rapidly as possible.
- Investors want a short path to an equity event – IPO or acquisition. However with each new round, dilution occurs and that builds huge pressure for an exit.
- Investors push their portfolio companies hard to become cashflow-positive.
Through all this the customers are following The Light.
The Peak of Inflated Expectations has been reached.
Gartner has a Hype Cycle model for emerging technologies. Using their model I firmly believe the Marketing Automation category is moving from the “Peak of Inflated Expectations” to the “Trough of Disillusionment”. This is normal and healthy.
Here is a 2010 Gartner Hype Lifecycle model that shows where various emerging technologies fit. This model can easily be applied to marketing automation.
Here are observations we have seen first hand with B2B organizations who have subscribed to various marketing automation services.
- Key vendors are focusing more effort on their big enterprise customers – The Whales.
- In the PacNW we have seen many companies who buy the multi-year subscriptions but even after 2 or even 3 years they can’t effectively use their solution beyond rudimentary email blasts.
- Customer Success Managers at multiple MA vendors are overstretched. (Since December I have spoken with 4 different companies each with $75M in revs and they are stuck and haven’t engaged with their CSMs for at least 6 months.)
- Customers are defecting from vendors because of self-inflicted wounds and poor vendor support.
- Service provider partners networks are often called in on 911 situations when the vendors can’t, won’t, or don’t help.