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According to Gartner's 2022 Marketing Budget and Strategy Report, approximat 20% of marketing budgets are allocated to technology spending, a percentage that has steadily increased over recent years.
Martech has become a core component of companies' marketing strategies. In fact, Forrester research shows that over 70% of companies plan to increase their Martech investments in the next two years. However, investment does not guarantee success. Without a strategic evaluation, the potential of your Martech stack might remain untapped, leading to wasted resources or missed market opportunities.
This article will guide you through a five-step process for evaluating your Martech strategy, each step supported by essential frameworks and tools.
Step 1: Define Your Goals and Strategy
No evaluation can be effective without clear goals and strategies. First, you need to define the primary objectives of your Martech stack, such as improving customer acquisition, optimizing customer experience, or enhancing data analytics capabilities. These goals will serve as the foundation for all decisions made during the evaluation process.
Positive Example: Coca-Cola clearly defined its data-driven personalized marketing as a core goal in its Martech strategy. By strengthening its Data Management Platform (DMP), the company achieved a 20% increase in customer conversion rates.
Negative Example: On the other hand, a global FMCG company failed to clearly define its core objectives, leading to inconsistencies in technology use across departments. This disorganized approach not only wasted millions of dollars but also resulted in sluggish market response and declining customer satisfaction.
Step 2: Evaluate Your Current Infrastructure
Before evaluating your Martech strategy, it’s crucial to have a comprehensive understanding of your existing marketing technology stack. Gartner's research indicates that companies typically use only 58% of their technology stack's capabilities, meaning a significant portion of potential value remains untapped.
Positive Example: A financial services company conducted an in-depth analysis of its CRM system and found that only 20% of the system's features were being effectively utilized. By optimizing usage, customer satisfaction improved by 15%.
Negative Example: Conversely, a large retailer continued using an outdated and difficult-to-scale marketing automation platform due to a lack of regular infrastructure evaluation. As a result, the company lost market share to more agile competitors, leading to significant financial losses.
When evaluating, consider the following:
- How the team adapts to technological changes: For example, a multinational retail company introduced new marketing automation tools, leading to a 30% reduction in campaign execution time due to improved team adaptation and efficiency. On the flip side, another company failed to provide adequate training for its employees, resulting in decreased efficiency and project delays.
- Usage and future potential of existing platforms: While one financial services company increased customer satisfaction by 15% through better utilization of its CRM, a telecommunications company saw a decline in customer service quality due to a complex, unsuitable new platform.
- Integration and complexity: A technology firm reduced its customer lifecycle management time by 25% by enhancing the integration of its marketing tools. However, another company suffered data loss and customer experience issues due to poor integration between old and new systems.
- Current investment versus total cost of ownership (TCO): One mid-sized company saved 15% of its annual budget by consolidating redundant tools. In contrast, another company exceeded its budget by investing in multiple new tools without a thorough TCO analysis, ultimately failing to deliver the expected business returns.
By thoroughly understanding these factors, you can identify areas of potential improvement within your technology stack, saving time and costs while laying a solid foundation for future customer experiences.
Step 3: Visualize the MarTech Stack
Visualizing your marketing technology stack is a crucial step in the evaluation process. Gartner research shows that 83% of highly effective Martech teams rely on clear visual tools for strategic communication. Diagrams, flowcharts, and other visual aids make complex information easier to understand, helping teams engage in discussions and make informed decisions.
Positive Example: A large e-commerce company improved cross-departmental communication efficiency by 40% by creating a detailed flowchart of its Martech stack.
Negative Example: A manufacturing company, lacking a clear visualization of its tech stack, allowed different departments to operate independently in technology selection and usage, resulting in severe resource waste and a 20% increase in technology costs.
Step 4: Assess Individual Components
According to RightScale, the average enterprise uses around 1,295 cloud services, which means your Martech stack may contain numerous independent components. Evaluating every platform individually is impractical. Instead, focus on areas with weaknesses or the most potential for improvement, prioritizing those with the greatest impact on your overall strategy.
Positive Example: A consumer goods company discovered that its social media management tool was not effectively integrating data, so they switched to a more comprehensive platform, ultimately increasing social media ad ROI by 25%.
Negative Example: However, an insurance company introduced multiple new components without fully assessing its needs, leading to an overly complex system that was difficult to maintain, significantly lowering customer satisfaction.
Step 5: Create your MarTech Roadmap
Finally, creating a realistic and actionable roadmap is crucial. This roadmap should include a step-by-step plan to turn existing weaknesses into strengths, ensuring your brand remains competitive and meets customer expectations.
Positive Example: Netflix gradually optimized its content recommendation algorithm, significantly improving user retention and becoming a global leader in the streaming market.
Negative Example: A traditional retail brand, lacking a clear roadmap, hastily launched multiple digital projects, ultimately failing to achieve its goals due to dispersed resources and poor execution, leading to a continuous decline in market share.
By following these five steps, you can strategically evaluate and optimize your Martech stack, ensuring your technology investment maximizes its business value. A well-thought-out Martech strategy not only improves operational efficiency but also enhances your brand’s competitiveness, helping you succeed in the digital age. At the same time, be mindful of potential pitfalls and challenges to avoid becoming another Martech failure story.
Allen is an award-winning Global CIO and CTO from China with extensive experience across various industries.
He is skilled in blending IT, R&D, and business.
His belief is: “Contributing makes me feel like I’m being useful to the planet.”