Imagine spending one-quarter of your salary on rent or a mortgage, then boarding up two-thirds of your home.
It sounds ridiculous, but that’s essentially what could be happening with your martech.
Gartner reckons most marketers use just 33% of their stack’s capabilities despite one-quarter of the marketing budget going to tech. That utilisation rate has plummeted from 42% last year and 58% in 2020.
What’s going on? Why are marketers throwing away wads of money on martech tools they’re not fully using? How can we put a stop to a problem that’s often too hard to see until it smacks us in the profit margin?
We put these questions to a couple of our business transformation experts, Sam and Dirk, to see if we couldn’t suggest some strategies to stop martech utilisation rates from freefalling any further.
TAP CXM Chief Growth Officer Sam Taverner has guided a significant number of CX transformations in his 20+ years advising on commercial leadership strategies. In that time, he’s seen too many companies trying to spend too much on projects that promise fundamental CXM transformation but only deliver minor efficiency gains.
These so-called ‘transformation’ projects originate from a genuine need, evident in declining marketing performance or widening capability gaps. They gain momentum from a few eager people who want to make a positive change. But despite those good intentions, it happens time and again that a shiny new martech tool becomes the focus, and true transformation gives way to incremental operational improvements.
Pretty soon, the project is a martech implementation mislabelled as organisational transformation.
“It’s not done lightly,” says Sam. “It’s just not done very well. Everything works, but when you take a step back, there’s no real change.”
New martech tools are exciting, and the outcomes are easy to measure. Organisational change is a little more abstract.
Unfortunately, what gets missed in that excitement are the people and process considerations that tend to be at the heart of underlying issues.
Tech is only a small part of any CXM transformation project. Probably around 20%. The remainder is work that’s done to overhaul processes and reorganise people around a customer-centric ecosystem.
“It’s not the software that transforms a business but how it’s used,” says Sam. “That starts with the business case for making the change. Working backwards from that endpoint, we’re often able to get most of the way there without investing in new tech.”
We’re not suggesting that technology vendors are overselling when they explain how software can solve marketing challenges like personalised marketing at scale or better data management and processing.
But tech vendors are experts in their product. They’re unlikely to look at customer engagement challenges with the objectivity of a CXM consultant.
Here’s how Sam recommends building a rock-solid business case before shopping for new martech:
“Before you go down that route, consider all the upheaval required to introduce new martech tools. Are you absolutely sure you can’t get the same value by stitching things together or rethinking your processes?”
Sam recalls a project that had the potential to be truly transformative. A global business with several high-profile lifestyle brands saw that each brand guarded its own marketing. There was little to no collaboration between verticals, which meant there was no understanding of customer touchpoints across offerings and therefore no way for them to know what channel, messaging, or offer should be activated at any given time. They were leaking vital information about customers by not being more joined up.
The parent organisation wanted to re-engineer their approach to market across the customer level. So, they scoped out a tech solution to unite the brands and forged ahead with the implementation. But they forgot to make one big change: moving marketing capabilities out from the industry verticals. All the new tech did was replicate their old ways of working instead of re-imagining the customer experience and building a team and technology to revolve around that.
For all the money and effort, the only result was an incremental uptick in campaign efficiency.
A better approach, says Sam, would have been to define a business case based on customer centricity and build the project out from that. Instead of undertaking a major martech project, the business could have:
The result could have been dynamic, relevant and real-time customer journey optimisation rather than incremental efficiency gains contained to the different verticals.
TAP CXM Adobe Solutions Director Dirk Wybe De Jong reckons any martech project should be split into two tracks. One track deals with the processes, and the other with technology.
Separating the tracks ensures the business case considerations Sam identified are impossible to ignore. The two tracks don’t need to happen in parallel – but they do both need to happen.
“If you’re changing technology, you need to make sure you’re getting the most out of the tool,” says Dirk. “Otherwise, it’s a case of same nail, new hammer.”
So, in which order should things happen?
Best practice says to prioritise organisational change that benefits customers and use martech tools as an enabler.
Dirk says: “Configuring new tools to allow for legacy structures isn’t efficient. You might need to create new forms for non-standard data, or build custom integrations to mimic features that were out-of-the-box in the previous tool. That means missing out on opportunities by not using the tech to its full potential”.
Unfortunately, it rarely happens this way.
TAP CXM’s technical consultants are used to being dropped in the middle of thorny implementations. They’re often massive tasks with a lot of complexity.
“Changing processes is harder because you have to change people,” says Dirk. “There might be new skills, new requirements, restructures – it’s often more of a pain than changing technology, which is why companies don’t do it.”
However, Sam and Dirk agree that not all hope is lost if you put the cart (martech tools) before the horse (business case).
“After implementation, you have to migrate into the technology while also keeping campaigns running,” says Sam. “Ideally, somewhere in there, you want to be re-engineering how customer communications are seen by the business and how campaigns are built as a result.”
In other words, it is possible to rework processes to access the latent capacity in existing technology. Which again, we’re sorry to say, raises the issue of whether the new martech tool was really necessary to begin with.
Dirk remembers one project where the client was migrating from Unica to Adobe Campaign. The platforms aren’t analogous, especially not at the scale and complexity we’re talking about, so the changeover required a lot of custom configuration and adaptation.
“They spent four years and close to $20 million [USD] trying to fit a square peg in a round hole. Eventually, they realised it wasn’t working, so we were called back to re-engineer the underlying processes and square off the hole.”
In another instance, Dirk was tapped to provide business consulting support for a smaller-scale swapover that was well advanced but not quite clicking into place. That project only blew out by about $1 million and one year.
In an ideal world, businesses would call in CXM consultants to advise on the business problem rather than lend a hand to martech implementation. Our recommendations might seem more challenging on the surface, but the long-term benefits are worth a tough conversation. It’s certainly better than reworking processes after spending four years and $20 million on a solution that doesn’t fit.
Using tech to avoid dealing with structural issues creates a paradox whereby the elephant in the room – a lack of organisational alignment – is both acknowledged and ignored. A lot of money is spent patching over a structural problem just to do it all again in less than five years.
Instead, take lessons from Sam and Dirk.
If you follow these guidelines, you can stop wasting money on martech your organisation doesn’t need.
TAP CXM provides practical and pragmatic business consulting that finds the most efficient and effective path to solving business problems, whether reworking processes, streamlining systems or configuring underutilised martech tools. We help companies put customers first and deliver exceptional experiences.