“The marketing technology budget in the United States is expected to top $20 billion in 2022, a 14.3% rise from 2021”. – Constantine von Hoffman, martech.
Both big and small businesses are making significant investments in marketing technologies. The martech sector as a whole has grown into a sizable industry. A wide range of tools and technology, including analytics, data management, automation and CRM, are being adopted by many businesses. With the combination of all these technologies, the ecosystem of marketing technology is significantly impacted.
Moreover, the increased expectations of customers today necessitate a tailored digital experience, which is the answer to the rising competition between businesses. In order to provide the best service possible, businesses are increasingly turning to digital strategies that can be tailored to meet customers' needs at scale and integrated into various stages of the customer journey. Ultimately, the goal of composable digital experience platforms (DXPs) is to unify the customer and employee digital technology experiences that lead to impact.
Composable DX is a novel idea that bridges the divides in digital experiences with unified, consistent solutions that are modular and adapted to microservices. This method is cohesive and streamlined, doing away with disconnected user experiences and comprehensive answers.
Apart from customer experience, martech has eased employee experience, too. Today's modern workplace is being reshaped by the rise of remote work made possible by technological advancements and shifting attitudes toward time and place of work.
However, companies and organizations need to know what kind of return they're getting on their investments (ROI), and while there is a huge amount of data available, it is crucial to know precisely how to use it to measure martech performance in order to ascertain whether their efforts and strategies in this area are successful — and successful financially.
Challenges Toward Optimum Martech Infrastructure
What challenges exist in managing marketing technology?
1. Complexity in Data Management
There isn't a single standard method for gauging the success of marketing technologies today. So many, in fact. The sheer volume of possibilities might leave businesses dizzy. While businesses may recognize the huge potential in analyzing the data they have collected through a variety of methods, they aren't yet using this information to their full advantage.
2. Financial KPIs for Marketing Technology
Before implementing any new martech strategy, businesses have to assess their current state to ensure success with account-based management. This information serves as a benchmark for the business. Once it is organized into a baseline, it will serve as a standard against which future information on individual accounts can be compared. In this case, pseudo metrics have a strong tendency to sway decision making.
3. Calculating ROI
Assessing ROI is crucial for organizations worried about their bottom line. Though it's not hard to do the arithmetic and come up with a return on investment score, there are numerous factors that go into that number. Like, what evidence is there that the company's marketing efforts actually resulted in higher sales? What if the company's biggest rival encountered a PR problem or went out of business?
However, marketing experts working for high-performing companies are more open than ever before to incorporating new data, tools and technologies into their strategies. Digital marketers all around the world are finding success with their campaigns and increasing their number of leads due to the most recent martech developments.
4. Martech Debt
Many services and tools are underutilized, and when a new business case arises, the tech stack expands to include even more services without first assessing the value of the ones that aren't being used. This is also known as martech debt.
As a result, plenty of resources are squandered on unnecessary duplication of features and services. One of the top three shortcomings among chief marketing officers (CMOs), as revealed by Gartner, is the adoption and utilization of marketing technology across marketing and sales teams. Despite allocating over 25% of their budgets to the martech stack, approximately 40% of that investment is wasted. It turns out that one of the major obstacles for CMOs is making the most of the resources at their disposal.
Related Article: Defining Your Marketing Technology Philosophy
Due to martech's independence, we are able to dispel common misconceptions about the ever-changing world of marketing technology.
1. Marketing Technology Cannot Be Affordable.
A variety of tools and budgets can be found in the martech space. In other words, you need to understand that software is merely a piece of the puzzle. A successful marketing team will have the necessary resources and personnel in place. The usefulness of these tools can be maximized after the procedure for using them has been established.
2. Employ a Group to Oversee Your Marketing Technology Stack.
The truth lies in the context. The martech landscape is vast, just as the typical martech stack. Not having a stack is fine. There may be a designated individual on the marketing team whose sole responsibility is to use the free or low-cost tools available when first dipping your toes into the waters of digital advertising. It doesn't necessitate a high level of technical expertise to operate.
3. The 'Art' of Marketing Is Being Squished by the Rise of Big Data, Analytics and AI.
Absolutely not. The trend toward "scientific" marketing makes it increasingly probable that originality and innovation will be the deciding factors in providing memorable and exciting service to customers.
4. CMOs Need Technical Expertise to Succeed.
No, but the team must have strong technical leadership. Listen to martech experts how the world is leading CMOs, and senior marketing technologists are transforming their organizations through agile marketing, collaborative efforts, and innovative thinking.
5. The Most Challenging Aspect of Modern Marketing Is Undoubtedly the Process of ‘Actually’ Using the Technology.
Compared to the necessary cultural shift, implementing new technology is usually a piece of cake. Gaining new perspectives on how martech leaders are structuring their marketing departments and staffing (and restaffing) their teams at martech can open the truth.
Common Martech Performance Metrics
Few common KPIs that are applicable for most businesses but regardless of whatever the KPIs you’re measuring you want to make sure there’s a logical alignment between investment, results and most importantly, the business outcome, otherwise you’re only looking at pseudo metrics:
1. Cost of Customer Acquisition
The amount spent to obtain a new client is known as the "customer acquisition cost" (CAC), which is the sum of all the upfront costs associated with doing business. Because it informs crucial financial decisions, this indicator can be utilized to enhance marketing efforts.
The cost of obtaining a customer, for instance, should be balanced against the potential return. For the most part, this is useful in determining how much money should be invested in marketing campaigns.
2. Return on Investment (ROI)
Subtracting marketing costs from sales growth, and then dividing the result by marketing cost can help determine return on investment. Understand that it may be tricky to pin an uptick in sales on a specific marketing effort. To do this, divide your marketing expense by the difference between your sales growth and your organic sales increase over the same time-period.
3. Marketing Quality Lead
A marketing qualified lead (MQL) is a lead who has shown interest in your business and has the potential to develop into a high-value customer if the relationship is nurtured properly. Because it shows how many leads your marketing team is generating, this is an excellent key performance indicator to track. Your marketing team can track the percentage of MQLs that turn into SQLs and ultimately customers by comparing them to sales-qualified leads.
Related Article: Why Is Marketing Technology Often Discarded and Replaced?
Conclusion: Martech, Aligned With Business Objectives, Can Provide Value
To sum up, your martech with the recent set of technologies out there is more capable than ever to deliver an awesome customer and employee experience. Well-coordinated execution and ability to digitally orchestrate the automation of services is required; it needs to be aligned to business outcome.
Moreover, the duplication of services and features frequently results in significant financial losses. That's something else to consider while trying to maximize investment returns. Deduping your tech stack can be an integral aspect of an orchestration strategy for cutting costs.
Attributing your tech stack to business outcomes is realistic only when your martech roadmap is aligned with CX strategy to leave the business impact. The right prioritization for investment, data management strategy, CX programs and Operational Excellence (OpEx) are no longer executed in silos.
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