Critical martech conversations every CMO should be having
4 key ways to improve ROI on your martech investments
Jan. 15, 2020 | By: Scott Beach, TEKsystems and Kalev Peekna, One North
It’s budget season (isn’t it always?), and the three letters that can strike fear in the hearts of any modern-day marketer are top of mind: ROI. In a day and age where seemingly every minute detail is being tracked, recorded and measured, why is capturing return on investment for marketing still so difficult, even common? Value realization on martech investments remains a top challenge we hear from customers’ marketing and digital leaders. What follows are a few common barriers we discuss with clients when helping enhance and report on the value their martech investments are making for their organizations.
1. Know what’s in your martech stack
Martech platforms are complex and far-reaching. As a result, CMOs are challenged with understanding the full extent of the systems that comprise their marketing ecosystem. And that could be for many different reasons. The average tenure of a CMO is around four years, so they could come into an organization that has disparate teams managing systems or lack visibility into the full capabilities of those systems and how they’re integrated with each other. As these technology platforms evolve and consolidate, you’re likely carrying tools in your stack that possess redundant capabilities, and thus, provide redundant value.
For many organizations, a digital marketing ecosystem could be made up of 10 to 20 different tools or platforms. For larger enterprises, that number could double when considering product, line of business, regional systems or marketing channel.
A critical first step we suggest is an inventory and audit of a client’s complete digital marketing ecosystem. This includes a current state architecture to inform decision-making, a value analysis of existing martech products, and recommendations for how the martech ecosystem may be streamlined to reduce cost, support future business initiatives and increase martech ROI. Clients consistently are surprised by how much they learn from this review and how valuable it is to have a holistic perspective to work from.
2. Define what you’re measuring
It sounds simple, right? Yet, another reason it’s difficult to get ROI is that the metrics are both ill-defined and completely independent of each other. Every element within a marketing ecosystem produces its own data, but rarely do they connect to provide a single view of the customer (i.e., the Holy Grail), particularly at enterprise scale. With fragmented data, customer insights and value are missed.
Ask yourself, “How would we have measured this KPI before having XYZ tool?” Tools alone can’t substitute for strategy, purpose and vision. When not defined from the outset, teams are left unsure what the tool is supposed to be doing, and therefore the tool is only meeting the bare minimum of its functional capabilities.
If you’re using a CMS to manage your website, what is the goal of your website: Sales? Support? Brand? Recruitment? Commerce? It’s odd how many marketers have difficulty answering that question. If the website’s primary goal is unclear, it then becomes extremely challenging to measure its success; the metrics and the business quickly become misaligned. (And if the response is, ”It’s everything to everybody,” …it’s actually nothing to anyone.)
And remember, think holistically. The reality is that the end user doesn’t know they’re interacting with a multitude of orchestrated systems. When you complete a purchase on an e-commerce site or book a flight, you’re working with a number of systems—some marketing, some business, some financial. And while the user experience may span 20 different systems, the goal needs to be defined across the experience. You can help prevent disconnection from the onset by doing background work before implementing a new tool. Identify and map the specific platform features that align to the customer journey you’re seeking to create and the business goals you’re trying to achieve.
3. Focus on KPIs that make sense for your business
While some industries may share similar digital KPIs (e.g., e-commerce tracks), the particular customer journeys and metrics will be different for each organization; there isn’t a one-size-fits-all set of measurements. By understanding the role your digital platform plays in customer goal attainment, the organization can establish a targeted set of KPIs to measure performance and alignment.
One of our clients, a leading hospitality brand, is a great example of a taking a business value approach to their digital experience by focusing on targeted enterprise key performance indicators: one leading example is “revenue per available room.” They can look at growth on particular brands or traffic for direct bookings to provide data for measuring progress on that KPI. Organizations that operate with a central definition, particularly in their approach to digital, have a significant competitive advantage in achieving and reporting on ROI.
4. Test, learn and improve
Once you’ve established a baseline set of measurements for success, the real fun begins. Testing and personalization offer marketing leaders the opportunity to analyze customer behavior, identify patterns and create differentiated experiences within the channel. By testing the performance of different messages, offers and experiences against your KPIs, the business is able to continually refine and optimize performance.
Testing and personalization capabilities are sadly often the first items cut from site implementations when schedules get tight, and yet offer the most direct means to grow customer revenue, engagement and satisfaction. Fortunately, most enterprises are already licensed with tools to enable testing and personalization capability. It’s a direct way to improve the ROI from existing martech investments.
Bonus: Remember, just because you have a tool doesn’t mean you have a strategy
Purchasing and implementing a content management, digital asset management, customer relationship management system or digital experience platform alone is not a digital strategy. You need the strategy to define the system you choose and how you choose to implement that system into your business. It’s just a platform—there are no magic beans or silver bullets; it all takes work and a plan.
It’s safe to say that most companies already have much of the technology they need to create incredible digital experiences. If they’re not seeing that return on investment, if the platform is perceived as a cost versus a value, it’s likely they’re only using a small percentage of the capabilities they have or using them in a way that doesn’t tie back to KPIs that impact the business. And while most marketers expect some custom work with any platform, when faced with a full scope of what they may need, it’s tempting to look for an easier, quicker solution—i.e., buying more software as an answer, further exacerbating the problem. It is worth the time (and financial investment) to dig into your martech stack to see what you already have and do the work to make it work for your business.
Kalev Peekna is the chief strategist at One North, leading the Digital Strategy team. He brings a cross-platform, user-focused approach to innovations in brand development, design, data analysis and technology, and helps clients apply those innovations to their strategic aims. One North is part of TEKsystems Global Services.
Scott Beach is the solution director for TEKsystems Digital. He has spent the last 20 years designing customer experiences, developing platforms and leading technology transformation for Fortune 500 companies. He resides in Austin, Texas (when he’s not on a plane).