How to recoup the ROI of your Marketing Automation investment


Table of contents:

In our previous post, we discussed three ways to estimate ROI from your CRM and Marketing Automation investment.

This time, we’re going to delve deep into the numbers and actually calculate the return you can get from your Marketing Automation investment.

After reading this article, you’ll know whether the costs are worth it or not, and which tactics you can use to get the biggest return.

From Universe to Maximized Customers: Your basic sales process

At which steps can a Marketing Automation solution help you increase your revenue?

A basic sales process consists of three steps:

  1. Find new leads
  2. Convert those leads to sales
  3. Keep or increase customer revenue

Here’s how it looks:

marketing automation ROI

However, not all leads will be sales leads. And Customers can provide more value than just additional revenue. Do you know what we’re talking about?

We’re talking about referrals!

In fact, you’ll have three types of leads, and they should not all be sold to:

  1. Promoter leads: These are all the leads that are not potential buyers. They are your brand builders. And they are plentiful. So don’t discard them! In our clients’ experience, around 70% of all leads you get will be promoters, and your job is to nurture them, so they talk about you with others.
  2. Early leads: These are potential buyers who have not yet started a buying process. They are interested in the topics or may be interested in solving problems you solve, just not yet. Typically, around 20% of all leads will be early. Here, your job is to keep them out of sales’ way, and instead nurture them until they become qualified.
  3. Qualified leads: These are the leads that did or may start an active buying process and should be actively chased. Around 10% of all leads, our typical clients get, are qualified. Here, your job is, of course, to close them.

With all of these stages in place, we can look at metrics. Here’s the ROI metrics a Marketing Automation solution can help you improve in each step:

Stage Metric to improve
Universe to Lead (market size) No. of leads
Promoter Lead to Early Lead (70% of leads) % referral rate
Early Lead to Qualified Lead (20% of leads) % qualification rate
Qualified Lead to Customer (10% of leads) % close rate
More Customer (customers) % referral rate
$ revenue per client
-% churn rate

Here’s how our model looks after adding these substeps and KPIs:

marketing automation ROI

So how do we improve these metrics? Let’s look at one step at a time.

How to improve ROI: Tactics for each stage

To maximize the return of your Marketing Automation investment, you need to improve the key metrics we defined at each stage. Below, we’ll go through how.

First, a couple of general pointers:

A) Focus on the point of most significant impact: For example, if you have a conversion bottleneck in lead to sale, then getting more leads will not yield big results. On the other hand, improving conversion rates is useless if you’re not getting many leads. So you need to focus on where you can make the biggest impact.

B) Subordinate stage-specific metrics to the end goal: The stages are interrelated, so optimizing one stage might hurt another, and ultimately hurt your end goal. For example, if you increase the number of leads by targeting the wrong market segment, you may get a lot of leads, but your lead to customer rate will suffer. If you increase the close rate by overpromising, your clients will be dissatisfied and hurt all the previous steps (from negative brand reputation). Therefore, always remember and incentivise for the big picture. If you’re a business leader, tie each role’s incentives to the big picture, not just their isolated metric.

With that, let’s look at each step in our model and how to improve your ROI:

Stage 1 – Reaching out to the Universe: How to get more leads

Getting more leads is probably the most talked-about aspect of Inbound Marketing. But that misses half the picture!


Consider all the revenue you’ve made in the last year. How many of those came from Inbound Marketing? Probably very little.

In a typical B2B business, most leads come from non-inbound sources, such as referrals, relationships, partners, outbound, events, and a host of other means.

To get more leads, don’t just focus on Inbound. Rather, focus on all lead generation methods, both inbound and outbound.

marketing automation ROI

Example Inbound tactics:

Example Outbound tactics:

  • Cold outreach: Create a digital warming up process on multiple channels (email, targeted ads, account-based marketing) followed by traditional cold calling.
  • Partners and relationships: Use your CRM to inspire and educate your partner network and incentivize referrals.

Events, trade shows, etc. Create an automated events process that invites, reminds, and follows up attendance with inspiring and qualifying material.

You may have more leads than you realize: If you don’t have a well structured CRM, most of these leads are likely residing in salespeople’s heads or in their Outlooks. Those leads are invisible to you and therefore you cannot improve their conversion rates! In addition to using the tactics above to get more leads, we also need to simply log more leads into the system, so the system can help you take care of them. Surprisingly for many, simply logging more leads into the system will improve your referral and conversion rates.

Whether inbound or outbound tactics will work best for you depends on two things: The size and the structure of your potential market.

If your market is large, producing and spreading content will yield a large ROI. If it is small, you may instead find that a personal approach (such as relationships and partners) may be a more effective way to generate leads.

If your market is structured (i.e. you can easily create lists of the people you need to reach), an outbound approach such as targeted ads or outreach can yield great results.

Here’s how our Marketing Automation ROI model looks after adding lead generation tactics:

marketing automation ROI

Stage 2 – Leveraging Promoters: Building a brand to get referrals

Many marketers get annoyed at all the “unqualified” leads. Typically, around 70% of your leads will fall into this category (based on our own B2B clients’ experience).

Marketers often feel that these “clutter” the system. Such leads also annoy salespeople, who stop trusting leads marketing generates.

Don’t fall into the trap of deleting these leads! In fact, these are what we call “Promoters” and you can use these to promote your brand and get referrals with little effort.

A small fraction of these leads may be competitors and other types of leads that you truly do not want to communicate with. But the vast majority of them are interested in your brand and message for a positive reason. Many of them will be non-decision maker employees (peripheral influencers or future referrers), industry experts or enthusiasts (PR), people searching for jobs in the area you talk about (future clients) and such. But they all have one thing in common: For some reason or another, they’re interested in your company, your information, or your services! They’re also plentiful. As such, this is potential high leverage that should not be wasted!

Here’s what you need to do:

A) Avoid sending these to your sales team. That way, you avoid lowering the perceived value of all leads.

B) Inspire these leads with newsletters and simple drip sequences. That way, you fulfil their desire to be educated and inspired, while staying top of mind and maximizing the chances of being referred.

marketing automation ROI

Example Promoter tactics:

  • Segment free email service providers: Create a rule that automatically tags any person with a free email service provider as “Promoter”. Add them to low-intensity, long-form drips designed to inspire and keep you top-of-mind.
  • Nurture with long-form drips: Create 12 emails, sent one month at a time, with inspirational and educational content. This will keep you on top-of-their-mind and increase chances of getting referred. Create an automation that adds anybody tagged as “Promoter” to this drip.
  • Segment competitor domains: Create a list of your top 30 competitors’ domains and a rule that automatically tags any person with that domain as “Competitor”.
  • Unsubscribe competitors: Automatically unsubscribe anybody tagged as “Competitor”.
  • Redirect competitors: Create a dynamic website rule that automatically redirects anybody who is known to be a competitor to a special page with different content. This page can contain content designed to discourage potential competitors from entering your market, or to partner with you instead of competing with you.

Let’s add Promoter Leads to our model:

marketing automation ROI

Stage 3 – Qualifying Early Leads: How to create sales-ready leads

Here’s where the brunt of your automation engine will do its magic.

These are potential buyers, and therefore high value – they just happen to not be ready to buy right now. As such, they’re not ripe for sales just yet.
Your job is to use your entire Marketing Automation toolbox to nurture them and inspire them. Then, implement a rule set to detect buying signals and send them to sales along with valuable sales intelligence.

marketing automation ROI

Example Early Lead tactics:

  • Personalized nurturing drips: For each lead capture point (for example if you have a landing page where they can download a PDF), create a nurturing drip that sends them related inspiration and link to other material they can download.
  • Use dynamic content to personalize further: Use dynamic content in your emails to show different content to different personas, or based on which product pages they’ve visited previously.
  • Use social media retargeting: Connect your marketing automation system with social media to show related content and remain top-of-mind.
  • Implement a “Hot Lead” detection ruleset: Use lead scoring and tracking triggers to detect leads that signal a buying intent, such as visiting pricing pages or product pages.
  • Automate hot leads follow up: Create a personal email sent to hot leads automatically with a non-intrusive meeting request, along the lines of: “I noticed you’ve checked out some of our material and I’d like to see if you’d be interested in a call?”.
  • Create an inbound sales role: Assign a dedicated inbound sales role who is responsible for manually checking all high score leads, adding additional info and following up manually based on ready-made templates they can customize.

With the above info added, our model now looks like this:

marketing automation ROI

Case: How simple marketing drips provides as much value as having a full-time inside sales person

San Sac, a company producing environmentally friendly waste management products, implemented a content portal and a content strategy with our partner Crescando. This has resulted in on average 48 new leads per month at the time of writing this.

After analysis, we concluded that roughly 10 of those per month are keyword based leads that were not familiar with this company before becoming leads.

These leads are nurtured by one of several nurturing sequences consisting of 6 personalized emails. Emails have over 20% click rate.

While this company has a different CRM which prevents us from measuring ROI directly (yet another reason to have an all-in-one sales and marketing system), we calculated ROI in two ways:

A) Estimating close rates: We assume that at least 5% of these leads close (a reasonable assumption in this industry), and average deal size is $5,000. Thus, these leads generate 5% x $5,000 x 10 leads per month = $2,500 per month in additional sales. (Note that this is only from keywords-based search and nurturing, not all the ways sales are increased.)

B) Alternative cost avoided: To generate 10 interested new companies per month, San Sac would need to employ at least a full-time junior sales person, which would cost roughly $6,000 per month.

Stage 4 – Closing Qualified Leads: How to improve your win rate

One big and common mistake marketers and sales do is this: They see qualified leads as “handed over” to sales, and then decouple the sales process from marketing.

Please don’t do that!

In fact, one of the biggest returns you may get from your Marketing Automation investment is in assisting sales to close deals. This is why an all-in-one marketing and sales system can be so impactful.

Marketing does this by providing intelligence, tools and assistance to sales, which makes sales more efficient and more effective: They work on the right deals, in a more time-efficient way and with increased quality.

marketing automation ROI

Example Qualified Lead tactics:

  • Provide lead intelligence: Using lead tracking, you can pass along information about what leads are interested in, so sales can follow up with relevant messages.
  • Check your active leads regularly: If you’re in sales, start your morning by checking which of your active contacts who have recently checked out various pages, clicked emails, etc. so you can follow up with impeccable timing.
  • Let nurturing handle stalled deals: Instead of annoying stalled deals with repetitive “just checking in” messages, use high quality and inspirational follow-up templates to nurture them, or automated marketing sequences that take care of them for you until they’re ready and show buying intent again.
  • Create a sales process that guides your reps: Instead of building a CRM that sales detest, build relevant tips, checklists and resources into each step that trains salespeople on the job.
  • Build retargeting right into your CRM: Trigger personalized retargeting campaigns on social media based on which sales stage an opportunity is in and which products are being sold.

It is intuitively easy to understand the ROI a tool like this can provide, especially the larger your sales force is. Consider this: A tool like this costs around 10% of a salesperson (check out our pricing page). If you were to pay a person the same amount, you’d get someone working half a day per week. Would you rather have a tool like this that assists all your salespeople improve the quality and follow up of their work, or hire an additional salesperson half a day per week? For a deeper comparison of the two, check out the first chapter of this blog post where we do a side-by-side comparison.

With this, our model now looks like this:

marketing automation ROI

Case: How one client increased their total sales by $42,000 per year

One client estimates an average deal value of $15,000 per deal. They were getting 5 leads per week (260 per year). Of these, they were estimating that they closed 14 deals per year (i.e. 5.38% total close rate).

By increasing the number of leads by just 10% (i.e. 286 leads per year instead of 260) and close rate by another 10% (i.e. closing 5.92% instead of 5.38%), they close 16.8 clients per year instead of 14 (i.e. 2.8 more deals per year).

2.8 more deals per year might seem like a small number, but it equates to $42,000 more in sales per year. There’s a clear ROI compared to the marketing automation cost, which is $7,800/year ($650/m). (Again, this doesn’t include improved brand value, more satisfied clients, and all the other ROI-improving factors we didn’t include.)

Stage 5 – Maximizing Customers: Discovering and expanding customer ROI

The problem of marketing and sales splitting up work and each doing their own thing usually continues at the Customer stage. In fact, here, we’ll usually also have the delivery team, who also does their own thing separately.

This is highly ineffective and doesn’t utilize the full capability of an integrated marketing and sales solution.

What if you could get all of your different teams to work together?

Leveraging the tracking, personalization and targeting features of a Marketing Automation software, along with CRM integration, you can maximize a win-win relationship with your customers:

marketing automation ROI

Example Customer tactics:

  • Send personalized newsletters and follow up clicks: Send regular newsletters, preferably personalized based on products or services they use, NPS score, and other factors. Create a rule that notifies the Key Account Manager (KAM) when a customer clicks interesting links that might indicate upselling possibilities.
  • Follow up with customers who visit the pricing page: When an existing client visits your pricing page, notify the KAM to prevent possible churn.
  • Increase upsales by detecting possibilities and promoting: Using tracking, detect potential upselling possibilities and follow up, or proactively promote relevant additional services by tagging the customer with potential upselling possibilities in your CRM or based on their behavior.
  • Promote to other units with Account-Based Marketing: When your NPS survey indicates a satisfied customer, create a case study, then use targeted ads and an account-specific landing page to expand into other units. After a few weeks of showing ads, let your salespeople follow up with key people using pre-made email templates in the CRM.

With this, we now have our full model:

marketing automation ROI

Case Studies: How much is the actual Marketing Automation ROI?

We’ll start by making some general conversion rate assumptions which we believe apply to most B2B companies. We base this on the many clients that we’ve worked with.

In the end, we’ll provide an ROI calculator so you can try with your own figures/numbers.

Before we start, please keep two things in mind:

A) We’re only looking at smaller companies: If you’re a larger company, you’ll likely to get much more leads than in our example, have larger deal values, many more repeat customers, and more salespeople than in our examples. All of this will make ROI a no-brainer for most large companies. The reason we decided to look at small companies only is that they’re the ones struggling most with whether they should invest in Marketing Automation.

B) We’re only looking at new client acquisition: To make our model simpler, we’ll exclude the Maximizing Customers stage from our model. There’s a lot more ROI to reap there which is not covered in our model.

General conversion rate assumptions

Universe to Lead: This one is the most variable of our assumptions. You can increase the number of leads by a lot – especially if you haven’t focused on this before. But for our baseline, we’ll assume that most B2B companies can increase their number of leads by 10%

Promoter to Early: Our model will assume that 5% of your Promoter leads today are referring other Early leads. By following the tactics above (mainly simple nurturing), you’ll be top of mind and provide great content and increase your brand strength and can boost that rate to 7%.

Early to Qualified: Our model will assume that 15% of your early leads today are converting to Qualified. Using the tactics above (mainly advanced nurturing with personalizations and retargeting), you can increase this to 18%.

Lead to sale: 20% is a common close rate of qualified B2B leads. By helping sales focus on the right leads at the right time, automating tedious tasks, reminding them to follow up, creating a better process and assisting them with marketing, you can boost this to 22%.

Case A: Startup with few leads selling to enterprise

If you’re a startup, it’s likely that your main problem will be to get leads.

In our case, we’ll assume a startup which sells products to the enterprise segment, with an average deal size of $15,000.

In this case, ROI will be impacted most by increasing the number of leads, so what’s what you’ll focus on.

If we assume that you double the number of leads while improving the other numbers based on the general assumptions, this is the ROI you’ll get:

marketing automation ROI

Case B: Company that closes many small deals

If you’re getting many small deals frequently, the biggest impact will typically come from automating Promoter and early-stage lead steps, while allowing sales to focus on later-stage deals. So that’s what we’re going to focus on here, for a company with an average deal value of $5K, and roughly a lead per day.

So our calculations will assume that your referral rate goes from 5% to 8%, and your qualification rate from 15% to 19.5%. The other numbers increase based on the general baseline assumptions.

Here’s the ROI you can expect:

marketing automation ROI

Case C: Long and complex sales process to a few high-value deals

If you have a long sales cycle and sell high-value deals, most of your costs will be in the latter stages of the sales process. In this case, we’ll see how much ROI can be impacted by even modest improvements in your close rate.

As our example, we’ll use a company getting 2 leads per week and average deal value of $20K. We’ll assume that your close rate goes from 20% to 23%, and standard improvements for the other stages. Here’s the ROI you can expect:

marketing automation ROI

The magic of small conversion rate improvements

You might have noticed that the improvements in conversion rates are pretty small. Can’t anyone improve their conversion rates by 2-3 percentage points in each step?

In our experience, yes – most marketing automation systems can help you realize results like this with standard processes. You might need a partner helping you implement the technology, that’s all.

Yet, even small improvements like that compound and result in significant returns on your marketing automation investment.

For a small B2B company, a few extra deals per year makes a big impact. And for a B2C company, small conversion improvements can carry big results because they have so many leads.

How much is your total lead to sale conversion? To calculate this, we can’t use the simplified formula most people promote, i.e. number of leads x % of each conversion step. Instead, we have to keep in mind that not all leads will go through all stages, since most of your leads will be promoters, some early and few qualified.

With that in mind, plugging our general B2B assumptions from above in our our ROI calculator, we get that a typical company closes 2.7% of all their leads. With the assumed improvement rates, this would go up to 3.2%.

With these total conversion rates, a small B2B company generating one lead per day would go from 10 new clients per year to 12. If a client is worth $15,000, those two additional clients are worth $30,000.

What’s your ROI?

How many leads are you getting today, and what are your conversion rates?

If you’re not getting many leads today, and your potential market size is too large to handle manually, simply focusing on generating more leads via inbound and outbound marketing can have a huge bottom-line impact.

If you are already getting many leads, improving your conversion rates by structuring your sales and marketing process is very high leverage.

Either case, any company with a large potential market (in terms of the number of people to influence) can get high-impact ROI with Marketing Automation.

To start, try plugging in your own numbers into our ROI calculator, or request a demo so we can show you the features discussed in this post!


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About the Author

Yusuf Young

Yusuf helps companies use Marketing Automation to grow B2B sales. In his role as a Marketing Automation consultant implementing systems such as HubSpot and Salesforce, he discovered the need for better services at a lower cost. Today, he runs FunnelBud to make the fruits of sales and marketing technology available to businesses worldwide.