Capturing the European SME Marketing Automation Opportunity

Project Director: Kaspar Roos, Associate Director

Stephanie Pieruccini, Consultant

Senior Advisors: Barbara Pellow, Group Leader

Bryan Yeager, Associate Director

Megan McCarthy, Market Research Analyst

Creative Services: Chris Pesko, Desktop Publisher

Editorial/Proofreading: Mark DiMattei, Corporate Editor & Content Developer

Eve Padula, Corporate Writer

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November 2012 Capturing the European SME Marketing Automation Opportunity

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Table of Contents

Executive Summary ............................................................................................................................................. 7

Key Findings .................................................................................................................................................... 8

Recommendations ......................................................................................................................................... 10

Introduction ....................................................................................................................................................... 13

Project Objectives .............................................................................................................................................. 14

Methodology ...................................................................................................................................................... 15

Project Deliverables ........................................................................................................................................... 16

Data Tabulations ........................................................................................................................................... 16

Survey Respondents Profile .............................................................................................................................. 17

Research Findings ............................................................................................................................................. 22

SME Defined .................................................................................................................................................. 22

Economic Optimism Varies by Country ...................................................................................................... 24

Key Business Priorities ................................................................................................................................. 32

Advertising and Marketing Spend ............................................................................................................... 33

Marketing Mix Diversification Accelerates ................................................................................................. 35

Marketing Challenges ................................................................................................................................... 53

Reconciling Inbound and Outbound Marketing ......................................................................................... 56

Media for Awareness and Growth ............................................................................................................... 57

Media Buying and Production ..................................................................................................................... 58

Ordering Media Online ................................................................................................................................. 64

Customer Data Management and Analytics .............................................................................................. 68

Personalisation .............................................................................................................................................. 71

Marketing Automation: The Next Big Thing ................................................................................................... 73

Adoption of Marketing Automation ............................................................................................................ 74

Enabling Sales through Marketing .............................................................................................................. 78

Capturing the SME ............................................................................................................................................83

Service Provider or Solution: The SME Choice ...........................................................................................83

Automating SME Marketing: Examples of Solution Packages ................................................................ 84

Learning from the Agencies: the MSP Evolution ...................................................................................... 86

Reaching the SME Audience ......................................................................................................................... 87

Critical Success Factors ............................................................................................................................... 89

November 2012 Capturing the European SME Marketing Automation Opportunity

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Addressing SMEs on a Country Level .............................................................................................................. 92

Number of Firms and Employees ................................................................................................................ 92

Revenue Growth and Marketing Spend ...................................................................................................... 93

Mass Marketing Channels ............................................................................................................................ 94

Direct Marketing Channels .......................................................................................................................... 94

Internet Marketing ........................................................................................................................................ 95

Personalisation .............................................................................................................................................. 96

Budget Allocations ........................................................................................................................................ 96

External Providers & Solutions .................................................................................................................... 97

Vertical Industry .......................................................................................................................................... 98

Conclusion.......................................................................................................................................................... 99

Appendix A: Brief Industry Profiles ............................................................................................................... 100

Accommodations & Food Service Activities .............................................................................................. 100

Construction ................................................................................................................................................ 104

Financial Services & Insurance .................................................................................................................. 108

Manufacturing ............................................................................................................................................. 111

Non-profits .................................................................................................................................................... 115

Personal Services ......................................................................................................................................... 118

Professional & Technical Services ...............................................................................................................121

Real Estate ................................................................................................................................................... 125

Trade ............................................................................................................................................................ 129

Transportation & Storage .......................................................................................................................... 133

Appendix B – SME Interview Summaries ..................................................................................................... 137

Interview 1: France, Healthcare Supplies Distributor ............................................................................. 137

Interview 2: France, Print Consultancy Firm .......................................................................................... 138

Interview 3 – France, Healthcare Clinic ................................................................................................... 139

Interview 4: Germany, Transport and Logistics Company .................................................................... 140

Interview 5: Italy, Pharmaceutical Company .......................................................................................... 141

Interview 6: Italy, Train Mechanic ........................................................................................................... 143

Interview 7: Italy, Solutions Company (Healthcare) ............................................................................... 143

Interview 8: Netherlands, Research & Consultancy Firm ....................................................................... 145

Interview 9: United Kingdom, Private Healthcare Firm ......................................................................... 146

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List of Tables Table 1: Business Types ..................................................................................................................................... 21

Table 2: Number of SMEs by Country and Company Size .............................................................................. 22

Table 3: SMEs in France, Basic Figures (2011 Estimates) .............................................................................. 27

Table 4: SMEs in Germany, Basic Figures (2011 Estimates) ..........................................................................28

Table 5: SMEs in Italy, Basic Figures (2011 Estimates) .................................................................................. 29

Table 6: SMEs in the Netherlands, Basic Figures (2011 Estimates) .............................................................. 30

Table 7: SMEs in United Kingdom, Basic Figures (2011 Estimates) .............................................................. 31

Table 8: Number of Firms and Employment Size (by Country) ..................................................................... 92

Table 9: Marketing Spend (by Country) ........................................................................................................... 93

Table 10: Mass Marketing Channels (by Country) .......................................................................................... 94

Table 11: Direct Marketing Channels (by Country) ......................................................................................... 94

Table 12: Internet Marketing (by Country) ...................................................................................................... 95

Table 13: Personalisation (by Country) ............................................................................................................ 96

Table 14: Marketing Budget Allocations (by Country) .................................................................................... 96

Table 15: Use of External Providers or Solutions (by Industry) ..................................................................... 97

Table 16: Vertical Industry (by Country)......................................................................................................... 98

List of Figures Figure 1: Year-over-Year Business Outlook 2011-2013 ..................................................................................... 8

Figure 2: Marketing Automation Adoption and Outlook ................................................................................ 10

Figure 3: Number of Employees ....................................................................................................................... 17

Figure 4: Company Size by Industry ................................................................................................................ 18

Figure 5: Company Size by Country ................................................................................................................. 19

Figure 6: Major Industry Mix .......................................................................................................................... 20

Figure 7: SME Industries by Number of Employees ....................................................................................... 23

Figure 8: European Union Recession Map (05/15/12) ................................................................................... 24

Figure 9: Number of SMEs, employment in SMEs, and value added of SMEs (2005=100) ........................ 25

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Figure 10: Year-over-Year Business Outlook 2011-2013 ................................................................................. 26

Figure 11: Top Business Priorities – Next 12 Months ...................................................................................... 32

Figure 12: Mean Marketing Spend (by Country) ............................................................................................. 33

Figure 13: Mean Marketing/Advertising Spend, by Vertical .......................................................................... 34

Figure 14: Marketing/Advertising Spend Change in 2011-2013 ..................................................................... 35

Figure 15: Marketing Budget Allocations ......................................................................................................... 36

Figure 16: Use of Mass and Direct Marketing for Business Promotion ......................................................... 37

Figure 17: Use of e-Mail for Marketing (by Vertical) .......................................................................................38

Figure 18: Use of Direct Mail for Marketing (by Vertical) .............................................................................. 39

Figure 19: Percentage of Marketing Materials Printed in Full-colour ............................................................ 41

Figure 20: Agreement with Increase in Colour Print Volume ........................................................................ 42

Figure 21: Use of Wireless/Mobile for Marketing (by Country) ..................................................................... 43

Figure 22: Familiarity with Mobile Barcode Technologies ............................................................................. 44

Figure 23: Use of Digital Marketing Channels ................................................................................................. 47

Figure 24: Digital Marketing Channels by Country ........................................................................................ 48

Figure 25: Use of Social Media for Marketing (by Vertical) ............................................................................ 51

Figure 26: Social Media Network Presence versus Advertising (Top 5 Networks) ....................................... 53

Figure 27: SMEs Face a Resource Struggle ...................................................................................................... 54

Figure 28: Top Challenges when Marketing to Existing Customers .............................................................. 56

Figure 29: Media Responsible for Business Awareness and Customer Acquisition...................................... 58

Figure 30: Types of Service Providers Used – Last 12 Months ....................................................................... 59

Figure 31: Average Number of Service Providers Used – Last 12 Months ..................................................... 61

Figure 32: Print Media Production ................................................................................................................... 62

Figure 33: Digital Media Production ................................................................................................................ 63

Figure 34: Use of Creative and Layout Software ............................................................................................. 64

Figure 35: Percentage of Total Print Volume Ordered Online – Last 12 Months, by Vertical ...................... 65

Figure 36: Service Providers Used for Internet Print Order ........................................................................... 66

Figure 37: Service Providers Used for Ordering Digital Marketing – Top 15 ................................................ 67

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Figure 38: Reasons for Not Ordering Print Online ........................................................................................ 68

Figure 39: Brand of CRM Ownership ............................................................................................................... 69

Figure 40: Type of Information Stored in Customer Database(s) or CRM .................................................... 70

Figure 41: Percentage of Promotional Materials that are Personalised ......................................................... 71

Figure 42: Top Reasons for NOT Using More Personalisation ....................................................................... 72

Figure 43: Use of Marketing Automation Solution ......................................................................................... 75

Figure 44: Marketing Automation Solution Provided by Franchisor ............................................................. 76

Figure 45: Marketing Automation Satisfaction ............................................................................................... 77

Figure 46: Top Marketing Automation Providers Used .................................................................................. 78

Figure 47: Marketo’s Integration with salesforce.com .................................................................................... 79

Figure 48: Use of Marketing Automation Solution Features ......................................................................... 80

Figure 49: Reasons for NOT Investing in a Marketing Automation Solution ............................................... 81

Figure 50: Motivating Reasons to Invest in Marketing Automation ..............................................................82

Figure 51: Preference for Managing Marketing across Multiple Channels ....................................................83

Figure 52: SME Approach to Software-as-a-Service ...................................................................................... 84

Figure 53: Marketo’s Marketing Automation Package Options...................................................................... 85

Figure 54: Hubspot’s Package Options ........................................................................................................... 86

Figure 55: PSP to MSP to Agency; an Evolution .............................................................................................. 87

Figure 56: How SMEs Find Online Service and Marketing Automation Providers ..................................... 88

Figure 57: SME Preference for Being Marketed To ........................................................................................ 89

Figure 58: Number of Accommodations & Food Services Firms by Company Size .................................... 101

Figure 59: Number of Construction Firms by Company Size ....................................................................... 105

Figure 60: Number of Manufacturing Firms by Company Size .....................................................................112

Figure 61: Number of Professional Services Firms by Company Size .......................................................... 122

Figure 62: Number of Real Estate Firms by Company Size .......................................................................... 126

Figure 63: Number of Retail Firms by Company Size ................................................................................... 130

Figure 64: Number of Transportation & Storage Firms by Company Size .................................................. 134