Marketing technology might feel overwhelming to outsiders, but there’s still plenty of room for martech to grow.
The pandemic only accelerated the transition from traditional marketing to digital channels – consuming 80% of marketing budgets in 2020.
Speaking of budgets, a large portion (26.2%) goes straight to martech. Furthermore, a whopping 68% of companies expect their martech budgets to expand in 2021.
But just throwing most of your marketing budget at martech doesn’t equate to tangible results.
For example, did you know most companies only use about 58% of their martech features and capabilities?
If most companies are paying for a ton of features they don’t even use, that tells you they’re overspending without effectively considering each martech tool’s ROI.
Neglecting to strategize and plan each tool’s ROI doesn’t buy you time to make it work. It only delays the inevitable. Fortunately, you can track and prove martech ROI before you ever add it to your stack.
Price is (Almost) Irrelevant: How to Evaluate and Prioritize a Martech Tool’s ROI
Whether you’re under pressure to prove a tool’s value to secure a technology budget or trying to take a proactive approach and prevent cuts down the road, calculating each tool’s ROI is critical.
Following the steps below to strategize ROI shows that you’re mindful about where company money goes, productivity, and actual results. (Meanwhile, neglecting the martech tool ROI does the opposite.)
Identify a Specific Problem and How It’s Holding You Back
If your company is concerned about a bloated martech budget, start with this critical step to avoid buying anything you don’t need – or won’t need. Lots of organizations tend to hoard martech, buying tools with tons of features and assuming they’ll use them later.
As we know, most companies barely use half of their existing stack’s capabilities. That’s why you should always start your martech search with problem identification:
- Poorly integrated marketing channels
- Bad lead scoring
- Low-quality content personalization
- Inefficient engagement practices
- Ineffective ABM implementation
- Lack of communication with sales or customer service
- Poor understanding of audience
Start with just one problem for now. Apply specific metrics to the problem and calculate where you could be if the problem were fixed.
Analyze the Martech Tool ROI for That Specific Problem
Once you have a specific problem ready, choose specific solutions and calculate each martech tool’s potential ROI for solving the problem.
Repeat the process for each martech contender. By now, you’ll have a list of tangible ROI for each tool so you’ll be armed with possible results.
Study the Martech Tool’s Other Features
With your shortlist handy, dig deeper into each martech tool’s full range of capabilities and features. Lay everything out in a spreadsheet, noting the tool’s target vertical.
This will give you a solid understanding of not only how you can use each tool to its fullest right now, but how each tool might grow and expand with new features in the future – and most importantly, whether they’ll apply to your organization.
Map Out How These Features Apply to Your Operations
You now have:
- Specific problems listed and what they’re costing your company
- One major problem you want to solve right now
- A list of contending martech tools and their ROI for solving your big problem
- Additional features for each tool and which verticals the tool targets
Using this knowledge, go back to your list of problems and calculate the costs/potential ROI from solving each problem as it relates to your martech list.
Which tools offer a full suite of features as far as your organization is concerned? At this point, you’re just trying to solve existing problems – not thinking about things you might use one day. This strategy keeps you focused on immediate ROI.
Plan a Martech Tool’s ROI Five or Ten Years Out
By now, you should have shortened your list to just a few applicable tools for your existing problems and vertical.
As you try to decide which martech tool will continue delivering ROI long-term, look at your long-term goals and the martech company’s long-term plans.
For enterprise companies, it’s not uncommon to ask questions about a martech vendor’s financial wellbeing and growth plans. There’s no reason small and mid-size companies shouldn’t prioritize this as well.
What features do you think the tool will offer in five years? Will they go under or get bought out? Will they pivot?
Choose tools that look best equipped to grow alongside your company in your vertical.
Investigate Your Competition’s Martech Tool ROI
Look at your competition as well as any companies in your industry roughly the same size as yours. What martech tools do they use and what does the ROI look like?
It’s easier to figure out than you might imagine. Run a Google search for the company’s name along with terms like “case study.” Do some digging and you’ll probably find case studies from martech tools they not only use but enjoy incredible results.
Of course, you should also search the case studies on your list of martech contenders. This strategy can help you find hidden gems you might have missed in your original search.
Audit Your Existing Martech Tools for ROI
Before investing in any new martech tool, you should always audit your existing stack for ROI. Analyze the features and everything else listed above. Apply metrics and real numbers to every tool.
This will give you leverage for switching to more relevant (yet costly) tools.
Defending Martech Tool ROI is One Thing – Securing Budget is Another Story
Organizations of all sizes have no problem throwing money at martech right now. Higher-ups know technology is a vital component of any successful digital marketing strategy – but that’s it.
Most decision-makers aren’t privy to martech capabilities, why you need them, and how they work – much less how to calculate martech tool ROI. Taking a proactive approach to ROI shows you care about solving existing problems and delivering tangible results with your budget.
Don’t wait for decision-makers to ask. Prioritize martech ROI upfront and you won’t have to focus so much on cost.
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