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Email Marketing vs. Marketing Automation: What Your Small Business Needs to Know

We delve into what these two practices are, how they differ from each other, and their importance to your organization.

October 23, 2017
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If you run a new small business, then you’re probably still building out your marketing strategy. During your planning and research, you likely came across the term "marketing automation." Think of marketing automation as the smarter and more powerful older sibling of email marketing. Both practices let you reach large audiences with scheduled and automated email messages. Both use information pulled from customer relationship management (CRM) software to send relevant and personalized messages to segmented customer lists. The similarities are plentiful.

“Email marketing is a piece of marketing automation,” explained Jon Dick, VP of Marketing at HubSpot. “Think of a cake. If marketing is a cake, then email marketing is like the flour inside of the cake. Email marketing is one of the ingredients. You could do marketing automation without email marketing but the cake wouldn’t taste as good.”

In other words, email marketing is an excellent tool for giving marketers reach, which is the ability to get promotions in front of as many customers as possible. Marketing automation is about adding relevance to that reach.

“Every marketer wants to have relevance with their audience," said Dick. "Relevance requires marketers to do two things: provide context and act with speed. That’s what marketing automation helps you do.”

1. Automated Campaigns

Automated Campaigns

Marketing automation lets marketers plan extended customer interactions without requiring manual intervention. Most of us read "Choose Your Own Adventure" books when we were kids. Marketing automation provides your customers with a similar experience (but with fewer dragons, wizards, and swords). Here’s how it works.

Marketing automation companies, including our Editors’ Choice nominees HubSpot and Pardot, let you build pre-programmed email sequences by using if/then logic. If your customer opens an email message, then he or she is placed into a sequence that has been customized for email opens. Conversely, if the customer ignores or deletes the message, then he or she is sent to another customized sequence.

In addition to email open, customer actions—such as clicking on a link, going to a webpage, and filling out a lead-generation form—automatically sort customers into sequences that are designed to elicit multi-step interactions. Although email marketing tools are capable of creating that first interaction, they’re typically designed to just funnel people into the customer database rather than funnel them in and continue interacting with them throughout the sales funnel.

“There are two kinds of campaigns: push campaigns and campaigns triggered based on an action,” said Dick. “Marketing automation can do both, but with marketing automation, you can build campaigns that exist indefinitely based on the actions someone’s taken. We look at our email volume every month. We look at one-off sends versus volume from nurturing campaigns. Our goal is always to reduce the volume of one-off emails in favor of nurturing.”

2. Workflow Templates

Workflow Templates

Another difference between the two is in how communications are created. Email marketing software offers templates to help you design and word your communications. Marketing automation tools also provides email creation tools. However, marketing automation tools offer templates that take interactions a step further; those sequences of interactions are called "workflows." Workflows can be custom-designed (that is, you decide who receives which email and when, based off customer actions) or the workflows can be created via pre-designed templates. For example, marketing automation companies will pre-install workflow templates that trace a customer’s actions from their email sign-up to their first email open to their first purchase to a second offer sent. Workflow templates include event invitations and follow-ups, abandoned shopping cart follow-ups, annual birthday wishes, or even customer education sequences that intensify the depth of information provided to customers about a company (especially useful for business-to-business or B2B sales).

“You can pay for developers who will build workflow templates or you can pay a company that has hired developers and built all that for you,” Dick explained. “When you’re working with your own developers, they want a set of requirements, they want to create the template, and move on. But marketers want more. They want to test. They want to try a workflow and build another automation right now. Marketing automation puts that process in the hands of the marketer instead of the technologist.”

3. Lead Scoring and Segmenting

Lead Scoring and Segmenting

Because marketing automation tools track and understand how customers interact with your messaging, they’re also able to do things most (but not all) email marketing tools can’t or don’t do. For example, marketing automation tools assign scores to your contacts to let you know how receptive they are to your email communications. With these scores, you’re able to segment (or have the tool automatically segment) customers into groups. The highest lead score contacts can be grouped into lists that are likely to see more aggressive offers more frequently. The lowest lead score contacts can be grouped into lists that are less likely to receive aggressive offers, and less likely to receive frequent communications. This might sound like an added benefit but, as your overarching email list grows, you’ll rely heavily on automation to sort and send messages to contacts. The smarter and more complex your lead scoring, the more timely and actionable your emails will become.

“The ability to send targeted email content based on what you know about a person is great for customers and prospects as well as the company," said Dick. “Are we doing the right thing for prospects? In the case of lead scoring, if someone has a very low likelihood of purchasing your product because of their company size or budget, the more you can avoid pushing them to the sales conversation, and the better it is for them and for you.”

4. Channel Recommendations

Channel Recommendations

As your marketing automation system learns more about how customers interact with your messaging, it will be able to take that intelligence and offer recommendations on when you should send communications. For example, if John has historically only opened messages at midnight on Thursdays, then your system will recommend that you send him an email message at that specific time. Also, some tools, such as Act-On, will urge you to forego sending an email message entirely; instead, the tool will pull data from CRM records and determine that John prefers a phone call to an email message (even on Thursday at midnight).

“Marketing automation is really about multi-channel communications,” said Dick. “The channels that are available are growing every day. One channel is your website. You can publish smart content on your website for different visitors based on context. On-site chat is another channel. You want to have an omni-channel view of things. Marketing automation helps you do that.”

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