Editorial
In 2015, I was playing lacrosse in the Wisconsin Dells, unaware that I had pushed my body beyond its physical limits. It was game three on a hot day. I was tired and dehydrated. While I was standing on the field in a defensive position, my right Achilles tendon ruptured. That injury and its two-year recovery taught me many lessons, including one about the value of marketing technology.
If you’ve had two Achilles tendons all your life, you can appreciate how valuable they are — especially after you lose one. But, if you never had something, how do you know the cost of not having it?
This question messes with martech buyers and sellers because technology is an odd bird. If a technology is cutting edge, or new to your team, you have no reference point. If it was the Achilles tendon of your operation, how would you know?
Let’s run that thought experiment. In it, we may find a better way to discuss and evaluate martech.
The Costs You Know About
When marketing departments decide how to spend their budgets, they emphasize the cost of the software and its potential ROI. Instead, they should start with the cost of their existing people, processes and technology.
Let’s say your content team has 28 employees who earn an average of $60,000 per year. They cost $1.68 million and depend on outside partners, like freelancers and agencies, who cost $410,000 annually. Then you have 30 salespeople at $1.8 million. Your creative stack, which includes creative tools, project management and stock photos, costs $160,000. Finally, your customer experience (CX) stack consisting of marketing automation, web content management and social media management is another $290,00.
All in, marketing costs $4.34 million. What is your return on investment?
Most marketers aren’t sure! Many tools calculate the ROI on a marketing campaign, but it’s hard to attribute that ROI to all $4.34 million. Surely there’s dead weight.
That is why virtually no vendor can say, if you buy X platform, you’ll get Y return. Being realistic, they’d have to say, if you don’t have X platform, you might suffer cost Z.
Related Article: What Do I Spend on MarTech This Year?
The Invisible Costs
When I imagine the above marketing organization not using digital asset management (DAM) (the technology my company sells), I can anticipate some costs. The costs start concrete then get circumstantial and hazier as we progress.
The team above probably creates assets that can’t be searched via metadata and deployed later. Maybe that adds up to $60,000 in wasted creative spending. Put differently, losing these assets costs as much as hiring an additional employee.
If the company isn’t managing image rights with DAM and accidentally violates a model’s release terms, that could cost a few hours of a lawyer’s time — or trigger a multimillion-dollar lawsuit.
As for the salespeople, if they are using outdated marketing collateral, email signatures and slide deck templates, how do you calculate that cost?! What about the blog post or white paper the salesperson couldn’t find and use? Could we really attribute a missed sale to the missing content?
Related Article: How to Future-Proof Your MarTech Stack
It’s About What We’ve Spent Already
The answer to that last question is a definitive no. Causal chains are way too complex for us to attribute a missed sale to a single piece of content or, more broadly, the lack of a system to distribute that content.
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That brings us back to the original question: if you’ve never had something, how do you know the cost of not having it?
Let’s do some math.
If your employees work 40 hours per week for 50 weeks per year, you get 2,000 hours per person. Let’s say that without a DAM system, each employee wastes 10 minutes per day.
If you have 58 full-time employees, as I calculated above, that 10 minutes is worth 48 hours per week. That’s 2,400 hours per year: 400 more hours than you’d get from one extra employee. The company is leaving more than $60,000 on the table without DAM.
Or, think about it this way: what if one of your designers had become accountable for those 2,400 hours per year? No one could find images without a DAM, so they asked the designer to track them down. That designer either can’t do her work or is working insane hours and liable to burn out. Not having DAM wastes $60,000 in that case.
And yet another way to think about it: if your best, most creative employees each lose 2,500 minutes (almost 42 hours) per year without DAM, what might they create if they got those minutes back? Something potentially worth far more than $60,000.
You can test this approach out for yourself with this free calculations spreadsheet.
Related Article: The Freemium Model Only Goes So Far With Your MarTech Stack
The Tendons of Business
MarTech platforms don’t operate in isolation. They can optimize (or throttle) a cocktail of people, processes and technology. Often the cost of not having technology is easier to put in numbers than the benefit of having it.
It’s a strange mental exercise — as strange as imaging your leg without an Achilles tendon. But this exercise can help us deal with the uncertainty of buying new technology. I hope you try it.
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