As COVID-19 scrambles companies’ sales and marketing plans, leaders are rediscovering a principle they learned in business school: caveat emptor.
Although it is, in fact, the buyer’s duty to know what he’s buying, marketing leaders know vendors are making exceptions. To save money, they’re looking for ways out of software contracts. Martech stacks, which only 58% of leaders use to their full potential, are popular targets.
But caveat emptor is a double-edged sword, and companies can’t make decisions on price alone. By heading for the exits, leaders who bought into martech before truly understanding it may make a devil’s bargain: “saving money” by giving up a tool they actually need.
Buyer, beware: Dumping martech at a time like this, or turning to less expensive options, is dangerous.
Martech’s Role Right Now
As sales slump due to social distancing’s economic effects, companies need digital marketing more than ever. Marketing, particularly scalable solutions like martech, drives revenue efficiency without putting people at risk.
By cutting martech now, companies risk constricting themselves in the long term in exchange for small short-term savings. The economy will go on, even if revenues dip for a time.
That’s exactly the point Mark Stuart, CEO of stealth startup DEN, makes: “Our contemporary society is built upon brands,” he said. “We drive a brand, watch a brand, eat a brand, sleep on a brand and call our family on a brand. COVID-19 hasn’t changed that one degree.”
If anything, now is the time for brands to stand out online. Because they can’t go out, consumers are spending more time on social media and in their inboxes. Martech is what makes outreach on those channels so cost-effective.
Realizing that, some leaders are taking the middle road on martech. But here, too, their “bargain” approach is unlikely to pay off.
To see why, let’s visit one of my favorite places: the snack aisle.
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The Lesson of Oreos
If you’ve ever tried to satisfy an Oreo craving with anything other than milk’s favorite cookie, you probably know the truth about generics: They never quite measure up.
According to Hope Frank, CMO of water conservation startup Brave Blue World, the same is true of martech tools like data visualizers: “Tableau was developed at Stanford University and is designed to help us tap into another side of our brains. It’s akin to having the power of an extra Pentium process working in parallel.”
Is Tableau the cheapest data visualization tool around? Of course not. But it’s one of the market leaders for a reason: It is user-friendly, rich in features, and accessible on many different devices.
That isn’t to say the best solution is always the most expensive or most recognizable one. The right martech investment is the one that keeps your company healthy.
A Healthy Helping of Martech
Here’s another lesson you might have learned from Oreos: Eat too much junk food, and you’re probably not going to feel great afterward.
Like bodies, companies need nourishment. Stock up on low-quality martech, and you won’t just waste money, former Cision CEO Kevin Akeroyd warns: you’ll also start to see sales and marketing tools break down.
“A lot of leaders spent excessively because business was booming and they could afford to, frankly,” Akeroyd said. “If your marketing budget is full of excess calories and junk — non-nourishing spend — focus on trimming back down to the healthy stuff.”
Akeroyd’s prescription? “Being data-driven, automating and constantly optimizing is important for success in every business climate. It’s simply mandatory in the one we’re facing now.”
How can leaders spot unhealthy spend in their martech stacks? For that, Julie Lyle, former CMO of Walmart and Barnes & Noble, has a few suggestions.
Finding Martech Efficiencies
Data-driven companies look for every opportunity to cut costs, including their martech spend. Lyle says three signs can help them do so:
When companies reorganize or eliminate staff, they may undercut mandates to deliver certain metrics or insights from martech software. If a tool isn’t used and doesn’t fulfill a current business need, consider cutting it.
You can see it already, Lyle said: The pandemic is reshaping consumers’ expectations. “This will shine a light on martech capabilities that are no longer relevant in delivering what customers expect under the ‘new normal.’”
Some companies, for example, have decided to shut their brick-and-mortar storefronts for good. For them, tools that associate online activity with in-store purchases may no longer be relevant.
“The need for SaaS companies to jump-start their sales engines and deliver on stakeholder revenue expectations quickly is very real,” Lyle explained.
Because B2B SaaS is now a buyer’s market, marketers have a chance to renegotiate agreements on the tools they need. On those they don’t, it’s an opportunity to secure favorable exit terms.
Might leaders' martech needs change again once the pandemic is over? Perhaps, but not in most cases. A McKinsey study suggests that 79% of business leaders plan to stick with their new sales and marketing models for at least the next year.
However long the pandemic lasts, brands and consumers will continue to connect online. Using martech to maximize your visibility will make sense well after the penny-pinching ends.
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