One of the most important metrics in evaluating the ultimate value of any cloud software product is the customer retention rate, a number that encapsulates the value obtained versus client expectations. Retention rate takes into account usability, support, expectations set, and impact on marketing and/or revenue goals. Companies that receive value in excess of expectations generally renew; those that don't opt out.
Though a valuable indicator for customers considering an investment in marketing automation, don't expect marketing automation vendors to divulge much about retention. They sometimes publish the number and growth rate of their customer base but not a single one lets on to retention rate, or its inverse-churn.
Not to worry. Another class of marketing technology companies can shed light on the magic retention metric.
Download my just revised Marketing Automation Industry Report Covering Marketo, Eloqua, Pardot Act-On, Infusionsoft, Salesfusion and many others, with with user adoption rates, features guide, and industry forecasts.
Note that websites do not equate with customers as a single customer may use marketing automation software on dozens or even hundreds of websites. Nevertheless, website count is a good indicator of success.
But not so fast...
It's not just absolute website count but rather the changes-the additions and loses over time-that are the strongest indication of platform success in the marketplace. I analyzed the top 20 firms for which we have data-and which fall roughly into the marketing automation space-and calculated the percent change in websites using their software since January 1, 2014.
Change happens quickly in dynamic markets. Demand for marketing automation software is growing overall but aggregates mask marketplace turbulence. According to the data, only two of the 20 firms-Pardot and Act-On-have increased their website count by more than ten percent since the beginning of 2014. Seven of the 20 platforms have actually lost websites, a few by over 20 percent.
The data also implies that churn is higher than many would believe. For the 20 marketing automation platforms, the aggregate ratio of websites adds to drops for the first eight months of 2014 was 1.08, meaning that for every 100 websites that added a marketing automation platform, 92 websites dropped one.
Note that the Datanyze metrics are an indication only and are by no means a definitive measure of software presence. A few caveats of this data are in order and can be found here.
Great marketing can generate a steady stream of new customers in a growing market, but only positive customer experiences will result in high retention rates. Caveats aside, one thing is clear; rapid change is ahead in the marketing automation sector.
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Marketing Growth Strategies LLC has been engaged in research, analysis, lead generation, and client implementation in the Marketing Automation sector since 2009 and has recently revised its highly successful 2014 Marketing Automation eBook.
Considering implementing marketing automation? Download the 2014 Marketing Automation eBook.