The accelerating shift to digital marketing, especially website, digital commerce, and digital advertising, is fueling unprecedented demand for upgraded marketing technology. It is increasingly common to see estimates such as “martech spend will exceed CIO spend” or “martech spend equals one-third of the average marketing budget.”
CMOs hope that by spending more on martech they can stay current. But too many martech purchase decisions under-deliver because they were based on discussions about the wrong things: cloud storage versus on premise hardware, Hadoop versus SQL, marketing versus IT ownership, and so on. Such discussions lack context. CMOs must insist that martech conversations put the customer first.
Marketing and MarTech Eras
One way to let the customer drive martech investing is to think in terms of marketing eras or maturity levels. A recent book, Marketing 4.0, convincingly argues that we have entered a fourth era of marketing. First, marketing was product-driven, then it shifted to being customer centric. The third phase was human-centric, where customers were viewed as whole persons with emotions and a need for purpose. Now social media and smart phones have enabled a fourth era: Marketing 4.0. Customers post their purchase assessments for anyone to read, and marketing claims can be checked on social sites in seconds. Marketing effectiveness now encompasses fostering conversations and ultimately brand advocacy not only for individuals but also within and across social communities.
Martech has a different set of support requirements during each era. In MarTech 1.0, the challenge is building customer and prospect lists to help marketers drive awareness of product features and benefits, and then tracking and accessing purchase activities that drive prospects down through the sales funnel. The challenge for MarTech 2.0 is supporting customer segmentation based on demographics, past purchases, and contact histories. MarTech 3.0 requires broader, deeper, and current customer views to support psychographic segmentation and personalized, highly tailored responses driven by interpretations of recent buyer activity.
To support MarTech 4.0, a community view is added on top of requirements from the preceding eras. The challenge at this maturity level is to: Identify ecosystems or communities of influence around key topics of interest to the company, specify the organizations and individuals who are established and emerging leaders in these communities, track popular and trending topics, identify emerging opportunities and impending threats, and assess effectiveness of attempts to influence these communities.
MarTech Effectiveness Drivers
Another way to enhance conversations about martech is to think in terms of martech effectiveness drivers. The first three are classic aspects of effectiveness for any major functional area. You need a Plan for the future that is rooted in a full and accurate assessment of where you are now and how you are going to get to where you need to be. You need People with the right skills or competencies, at the right staffing levels, and organized in a way that enables success. And you need Process to ensure inter-martech coordination and cross-company collaboration.
The next driver of MarTech effectiveness—Deliverables—addresses specific measures of martech output. The metrics align with the company’s marketing or business strategy. The Data component encompasses not only knowing what data is required, but also accessing it in the required timeframe.
Which brings us to Tools, or hardware and software. This area is over-exposed and over-emphasized relative to the other effectiveness drivers. It is a highly complex alphabet soup of acronyms and assertions about business impact. In this area, we ask if you have the requisite hardware and software and whether it delivers a sufficient return on investment.
The last item is well-known but oft-forgotten. Martech staff typically avoid documentation activities, or make it a low priority. But technical staff turnover is a reality, and are hard to replace and onboard. This driver often requires a delicate blend of carrot and stick.
MarTech Maturity Assessment Tool
The previous two concepts, eras of martech maturity and martech effectiveness drivers, can be combined to create a martech assessment tool. The seven drivers are assessed twice: once on Aspiration, and then on Reality. Aspiration reflects business and marketing strategy, or where the company is headed. Reality captures current martech effectiveness. Gaps between Aspiration and Reality must be identified and closed.
In the example, this client aspires to be fully capable in MarTech 3.0. It only recently completed MarTech 2.0 by adding full demographics to its customer view and creating a simple, pleasing digital commerce experience for customers. Now its strategic plan calls for the company to embrace personalization, with the goal of making every customer interaction highly tailored to each customer’s unique needs and preferences.
Some progress has been made toward MarTech 3.0 (represented by the red line). A three-year plan is now in place for making the transition, a few people have been hired with MarTech 3.0 experience, and a recent big data initiative is underway that will incorporate real-time customer activity and enable personalized marketing responses.
Frank Grillo is CMO of Harte Hanks, and Brett Eckrich is Manager of Marketing Technology and Innovation at Harte Hanks.