What are the true AND ongoing total costs of running a Marketing Automation system?

I am not sure that there are any good metrics available, as there are many variables that go into operating a system. For example, my company's marketing efforts focus on a few thousand potential buyers, but we manage client operations where we have 100 million customers and prospects in their database.

Here are a few things that should be measured:

Annual maintenance costs or subscription fees: For installed solutions, maintenance is generally in the range of 15 -22% of the original software expense. The underlying hardware may also require an annual maintenance fee. For SaaS solutions, there is usually a per-seat license, as well as tiered pricing based on functionality/database size, etc.

Campaign and message fees: many vendors charge on a per-message and/or a campaign basis. In my experience, this is generally more than what one would pay, for instance, for simply sending an email. I think you should calculate the difference between the two prices (automated, not automated) in order to calculate the incremental expense.

Labor: Over time, the most expensive item is likely to be labor (although to hear the marketing automation vendors tell it, labor costs are supposed to virtually disappear). There is likely to be extra labor involved in setting up more tailored campaigns, testing, creating tags on your site, analysis, etc, but you may save in other areas.

In calculating these costs, I think it is important to look at the incremental expenses compared to "business as usual." For example, if I were to currently send emails for $0.008 each and a marketing automation solution cost me $0.02, then I am paying $0.012 more per message. Again, if volumes are low, the total expense difference is negligible. Likewise, if we have been doing direct mail at $0.50 per piece, then we have a sharp decrease in this expense if we switch to email/marketing automation.

So I'd suggest putting down all of your current marketing operating expenses, then looking at the comparable costs for the marketing automation solution. The delta, either positive or negative, then provides you with the difference in expense.

Of course, the other side of the coin is the results generated by different approaches. For example, we have clients where direct marketing is still the most important channel to drive sales. If we cut out direct mail, marketing expenses would fall dramatically, but revenue would fall precipitously.

Hope this helped a little.

David King
http://blog.fulcrum-mktg.com