I’m often asked how big a martech stack should be. Sadly there’s no easy answer other than a trite “as big as it needs to be.”
Martech stacks come in all shapes and sizes. I’ve seen stacks with as few as 25 products and as many as 250. The biggest factors in determining stack size are:
- Size of company. In general, the smaller the company the fewer the products.
- The focus of the stack. If a martech stack is focused on a single objective such as lead generation it’s going to be inherently smaller than one that addresses the entire customer lifecycle.
- How many organizations the stack supports. A company with a siloed organization and distributed purchasing process is going to have a smaller stack than a company with centralized purchasing.
- How broadly products are cataloged. Some companies only reflect the technology products that have been purchased in their stacks. Others include freemium products, internally developed products and integration code, and products managed on their behalf by agencies or consultants.
- How martech is defined. Purists tend to limit the technology reflected in their stacks to products that have been specifically developed for marketing applications. Others include everything marketing uses, whether it’s a marketing product or not, and regardless of whether it was purchased by marketing or another department. A typical example would be a workflow product like Trello — in the stack or not? The answer is whatever works for your organization.
Can a Martech Stack Be Too Small?
Technology enables everything we do today in marketing, so it would be impossible not to have some sort of stack. For any company, regardless of size, the basic building blocks of a stack are the same:
- A CRM to manage customer contacts and relationships.
- Email platforms to manage business and marketing communications.
- An Analytics platform to track key metrics.
- A CMS to enable the easy update and distribution of marketing information.
These could be discrete products or platforms that deliver two or more of these capabilities. Beyond these basics, it becomes a matter of determining the technology needed to support the company’s marketing objectives.
One caution: trying to limit the cost of monthly subscriptions by avoiding technology purchases can result in false economy if driven by the belief that the work can be done manually using a spreadsheet or equivalent. And while sometimes this makes sense, often there's either a productivity or functional limitation tax to be paid which may impact the performance of the marketing team.
Related Article: Does Your Martech Stack Inspire Joy?
When a Martech Stack Is Too Big: The Problem of Stack Bloat
Stacks can absolutely be too big and often are. The problem with having too big of stack is that the cost of technology factors into the cost of customer acquisition and customer lifetime value equations which in turn directly impacts customer and company profitability. When these numbers decline the solution is frequently to reduce the marketing budget; this generally includes people, programs and technology. Unfortunately, when that happens it becomes a numbers game and technology gets slashed indiscriminately which starts a negative cycle of poor marketing performance leading to more cuts.
There are many ways to avoid these problems:
- First and foremost, always know your cost of acquisition and CLTV metrics. These should be your guideposts in managing your technology spend.
- Maintain a complete view of technology across the sales and marketing departments to ensure there are no redundant contracts and products. I’m an advocate for centralized technology purchasing and management, but if that doesn’t suit your organization, create a system that enables departments to share information about technology being evaluated, purchased and retired.
- Along the lines of the previous bullet, watch out for hidden costs by creating rules around signing up for a free trial or new low-cost subscription. Recurring costs from abandoned subscription products quickly add up, particularly in large organizations.
- Continually scrutinize each layer of your stack to ensure there is limited functional overlap. Intentional overlap is fine. For example at CabinetM we use three email platforms: Gmail for general business communications, Hubspot for marketing emails and Sendgrid for site-triggered emails. It is the unintentional overlap that causes problems. Unintentional overlap is created when you purchase new technology without assessing if existing technology can address the defined use case. The easy solution to this is to build a review of existing technology into the technology purchasing process.
- Make sure that your data is clean and complete. Duplicate and poor data can have a dramatic impact on your technology costs.
- Ensure you have a metric for each product to assess the value it brings to the overall marketing program. It doesn’t have to be a quantitative metric, it can be qualitative. What’s important is you have some way of assessing whether something is contributing or not. One way to do this is to label each product as Essential or Beneficial and then rate them on a scale of 1 to 5 in importance. You should also know exactly how each piece of technology supports your marketing objectives.
- Make sure the technology you have is right-sized for your organization. Too often great technology sits dormant in organizations because there aren’t the skills in-house to take advantage of its features. Consider replacing these products with something simpler.
Addressing the above will get you to a good place with regard to optimal stack size. When someone then asks you how big your stack is you can confidently say, “as big as it needs to be.”
Related Article: Why Analytics Solutions Remain Core to the Slimmed Down DX Stack