Why 2021 is the right year for a martech audit
The complex array of martech solutions can make it challenging for marketers to determine what’s providing the best return on investment. And with budgets constrained because of the COVID-19 pandemic, now is the right time for a martech audit to assess what’s working effectively, writes Fabian Di Marco.
Many marketing budgets have been reduced as the lingering impact of the coronavirus is felt, yet the martech stack still needs to deliver growth even in a global downturn. Now is the time for marketers to start the process of overhauling their marketing technology, turning their attention to usage and effectiveness.
The ballooning martech stack
Increasingly sophisticated martech stacks cover everything from advertising, social media and content to sales, data and project management. Just look at the most recent martech lumascape that has ballooned to include some 8,000 solutions in 2020. Almost 10 years ago, there were around 150 martech solutions. That’s a whopping 5,233 percent growth since 2011. The market for technology solutions now includes a dizzying array of choices for marketers to track and measure their endeavours.
Martech vendors are just following the needs of marketers who are, in turn, responding to the business demands for profitability and growth year-on-year. Many marketers are searching for the ‘Holy Grail’ of personalised marketing at scale. While some large vendors sell the dream of the complete end-to-end solution, it’s rarely as simple as this.
The enterprise martech platforms may not function in the way it is sold or it may require customisation or further add-ons to utilise all the promised features. Some solutions create new problems, like data silos, which need new, bolted-on tools that add to the complexity of the set-up. It can eventually become a convaluted web of tools, hard to manage and even harder to unpick when looking to measure effectiveness.
The right ingredients for your martech decisions
There are six key considerations that should factor into any decision to adopt a new martech solution. Collectively, they will ensure new tool selection delivers measurable improvements to the business and is feasible to support and manage.
Here are six key things marketers should consider before adopting new martech:
1. What customer problem are you trying to solve?
Always start with the problem you want to address and have the customer at the centre of any solution. Review the customer decision and experience journey, both at a behavioural and at a tech stack level, so that you’re clear on friction areas and gaps. This should help define your brief and the business case for the new solution.
2. How does this help meet your ‘North Star’?
Just because you can do it, doesn’t mean you should. It’s vital to have clear marketing goals and to understand how achieving these goals will have a quantifiable impact on the business. Each decision and investment needs to support the North Star that focuses on the product or service and the core value it brings to the customer.
3. Involve your stakeholders
Every team in the business connects with the customer, so it’s only right that engaging the stakeholders – customer service, technology, data and engineering teams – can bring valuable insight and experience to martech investment decisions. This will help reduce any unnecessary costs and integration challenges of a new solution.
4. What are the current obstacles?
It’s no use adopting a new tech tool if you’re not clear about the obstacle it’s intended to solve or if you haven’t got the fundamentals right. Start with an audit of your processes, people and platforms. The goal is to understand why the current offering hasn’t been able to solve these problems and achieve your marketing goals. Define any dependencies in the current ecosystem and look to stakeholders, such as the CTO, for valuable input on this question. You may find an untapped capability you haven’t deployed or a data element that hasn’t been considered until now.
5. Have a proof of concept
Develop a proof of concept (POC) and define the minimum effective dosage to first test a new tool before committing money and time on it. What’s the minimum task or result that is needed to qualify for investing is it? Being clear on this will help build a business case based on measurable results.
6. Seek independent recommendations
Look to independent advice to help select the right provider. A lack of knowledge of the market or a solution bias can lead to poor investment decisions. It’s still the case that most marketers don’t have a strong technology background and most technologists don’t have a strong marketing background.
To help overcome this imbalance, find a consultancy or agency that is solution-agnostic and has expertise in both marketing and technology that will pre-qualify vendors. And ensure that each new solution has a clear and quantifiable KPI and set of requirements.
How to answer the CEOs and CFOs asking more of martech
Martech is big business, just look at the numbers. According to Gartner, in 2019 Australian companies spent A$2.3 billion on CRM technologies – a jump of 20 percent on the previous year. However, budget cuts are on the horizon, coming at a time when marketers report significant under-utilised martech.
The Gartner Marketing Technology Survey 2020 reveals that nearly 60 percent of martech leaders expect moderate to severe cuts to their budgets as a result of coronavirus-related disruptions. And yet Gartner reports that marketing leaders only utilise 58 percent of their martech stacks’ full suite of capabilities. And by 2025, 80 percent of marketers will abandon their efforts due to lack of ROI.
CEOs and CFOs are looking for the measurable results these marketing investments are returning. CMOs have to answer to the C-suite and quantify the value this technology is returning. Solutions that are underutilised or that require further investment to implement and run will soon show up as under-performing.
Why driving returns starts with a martech audit
Marketers looking to drive returns from their current platforms and find growth in a time of economic pressure should first look to audit their existing martech stack. Be prepared to work with the business on rolling back, or out of, existing technology that isn’t delivering the results that are needed. And don’t be afraid to admit to the business what’s working and what’s not working, it’s an integral part of the review process.
Calculate the percentage of utilisation and the cost of acquisition against the business value return it provides. It’s a process of comparing outcomes to requirements, overarching marketing goals and quantified KPI’s of each solution. And to do this effectively, it’s important to have an independent review of the entire stack to see what can be retained and what can be discarded.
Keep an agile approach in the audit process and use the POC model to manage risk and avoid any over-investment in the future. If implementing a new solution, adopt a ‘lite’ version that demonstrates a measurable return, before investing further. Don’t be attracted to the shiny new thing. Through this process, be prepared to be vulnerable – if existing tools or solutions aren’t fit for purpose, avoid the temptation to add more complexity and cost in the hope of improving things.
Finally keep in mind that with an independent audit, it’s possible to find more value out of the existing investment by improving how tools are utilised and finding any skill-gaps or adoption pain points.
Fabian Di Marco is the MD and head of strategy at Tzu and Co.