For Capital Efficiency, Put your Martech Stack on a Diet
Why put the martech stack on a diet?
Martech tooling can be extremely powerful, but many companies pay big monthly or annual bills without actually getting significant ROI from the software. How does this happen?
Oftentimes, martech tools feel like a necessary infrastructure cost and, to some extent, they are. But that sense of necessity, combined with the potential future you’re told the tools will enable, makes it easy to deploy headcount-level spend on fancy tools that don’t add as much value as their cost would suggest.
In the mid-market, here are common symptoms we see that indicate potential expense bloat in the martech stack:
- A tool is useful for a certain part of the customer journey, but teams drastically underutilize the feature set attached to the price tag (in some cases they only leverage 1 or 2 features).
- Expensive tools simply haven’t helped drive revenue, but because they feel like necessary infrastructure, they fly under the radar and don’t undergo the scrutiny of a cost/benefit analysis.
- A prior sales or marketing leader in the company pushed hard to get a tool they used successfully in a previous role at a different company, but that leader is gone and the tool is never fully utilized by teams doing the actual work.
- Over the years a tool, most often Salesforce, has undergone extreme customization and requires multiple people with tribal knowledge to manage the fragile system, making change extremely painful and expensive.
- Dirty and inconsistent customer data mean that any tool in the martech stack can only be so useful. The potential is there, but every new campaign or acquisition effort means teams spend time on painful cleanup, not actually leveraging features for more efficiency and impact.
The goal: get back one headcount by cutting costs in the stack
Depending on the size of the company and complexity of the tech stack, it’s reasonable to have a goal of cutting martech costs to the tune of a junior or mid-level headcount. That may be a stretch for many, but the act of going through the exercise is revealing.
Material cost savings, especially at salary-level quantities, will not only be praised by the board during these uncertain times (increased runway), but the margin also increases optionality, which can be a significant competitive advantage when unique opportunities arise.
Five steps for putting your martech stack on a diet
How do you actually put your martech stack on a diet, though? Facing a tangle of tools that span teams and business processes can be daunting. In reality, scrutiny of utilization and forced cost-cutting drive simplicity and creativity, which are two major catalysts for growth teams.
There’s never been a better time to do needed surgery on your martech stack, especially if you’re experiencing a slowdown. Even if you haven’t, though, having a clean, capital-efficient stack will only better prepare you for growth in 2021 and beyond.
Here are 5 practical steps to take to put your martech stack on a diet, starting today:
1. Be honest about utilization VS cost
If you’re paying tens of thousands of dollars for a marketing automation tool (like Pardot, Marketo, etc.), but you primarily use it for one function, like sending outbound email, you’ve essentially purchased a Ferrari to drive to the grocery store.
There’s never been a better time to carefully review every feature you’re paying for and honestly evaluate whether the business is using it or even needs it. If there’s an imbalance, check out Step 5 below and replace it with a cheaper, single-purpose alternative, then work your way into the need for more features.
If you’re under an annual, or worse, multi-annual contract, fight it. Depending on the cost, it can be worth paying to break the contract. Every dollar spent on unused features are either dollars you can save, or pay someone to leverage a cheaper tool that will do the same thing.
If you’re worried about Salesforce sync, step back and think about the utility of sync if you’re only using one feature. In our experience, syncing is problematic no matter the tool.
Also, on a tactical level, this is a great time to review how many seats you’re paying for (for tools with seat-based pricing) and remove anything you don’t need. Better yet, set the budget for the number of seats you want and force your team to get creative about how seats are used. You’d be surprised at how productive a marketing team can be with a single log-in.
2. If it’s not helping drive revenue, cut it or find a free/cheap alternative
Has that chat tool you’re paying $1500 or more for consistently resulted in leads that turn into real revenue? If not, stop paying for it as soon as possible. If it hasn’t worked by now, either because it’s not a good fit for the customer journey or you simply haven’t had the bandwidth to fully leverage it, there’s no sense in paying for potential future utility.
Odds are that if you simply get rid of it, you won’t miss it and will actually become more productive by removing the distraction of managing another tool. If you want to keep the functionality, there’s a 100% chance you can find a much cheaper (or even free) alternative. It might not be as fully-featured, but you weren’t using those features anyways.
We encourage companies to adopt new software with a simple paradigm:
Pay as little as possible until the tool’s function proves itself out as a valuable piece of the customer journey.
See Step 5 for specific ideas on replacing expensive tools.
3. Clean up your data
Once you’ve cut the obvious (and not-so-obvious) fat from the stack in steps 1 and 2, you can focus on the most important piece of the entire puzzle: your customer data (which we mentioned before as the primary component of a capital-efficient revenue engine).
Feeding expensive tools bad customer data is like putting dinky spare tires on a Ferrari—you’re placing a systemic limitation on what would otherwise be incredible potential. Without clean data, systems are fundamentally hobbled: building lists is hard, building automations requires a ridiculous number of rules or edge cases and integration is tricky. The entire system is harder to use.
In order to fully utilize any martech tool in a capital efficient way, you’re going to have to clean your customer data—and there’s never been a better time. If you’re in a slow period, bite the bullet and execute an all-hands effort to clean every corner of the customer data house. If you’re growing like crazy, assign an internal SWAT team to build a process that cleanses customer data as it’s touched by various teams—that will slow everyone’s work down in the short-term, but pay massive dividends later.
If there’s one thing you take away from this post, let it be the fact that there’s no better investment you could make for 2021 and beyond than cleaning up your customer data, now. Not only will clean data help you utilize your martech tools to their full potential, but the gains in efficiency and capability will open up doors for supercharging other parts of the business (like leveraging data enrichment to improve qualification insight for the sales team).
4. Rip out costly customization and start simple
One of the most common hidden costs for mid-market companies is the maintenance of highly customized systems, especially Salesforce. Customization isn’t bad, per se, but heavy augmentation over several years often results in a Frankenstein system that has done just enough to reflect the latest change to business processes, but not enough to make the entire system flexible for future business adaptations.
Because customization is expensive, the thought of ‘throwing away’ so much work can be painful. The reality for most companies, though, is that starting over with a ‘standard’ Salesforce install, clean customer data and only the minimum number of 100%-necessary custom fields would drastically simplify people’s jobs across sales and marketing and lead to more throughput. Doing your job without concern about the fragile nature of your toolset or process frees up significant mindshare.
Removing customization also eliminates much of the man-power required to maintain a fragile system and opens up options for the future, like moving automations to other tools or even evaluating entirely new systems for your stack.
5. Get creative with automation, single-purpose tools and open-source
With clean customer data and only the necessary, value-driving martech tools, today’s world is your low-cost martech oyster.
It’s important to note that we have no economic relationship with any software provider - we are completely tool agnostic. The tools mentioned below are examples, not necessarily endorsements.
Here are a few ideas to get the wheels turning:
While we wouldn’t recommend Zapier for core business functions at scale, it’s an amazing tool for experimentation and building proof-of-concepts to test things like sending triggered emails, updating contact records, pinging APIs, etc. We love using Zapier to prove out the value of ideas as a precursor to tools that would eventually do something similar as part of the stack.
It’s never been cheaper or easier to connect data sources. Using a service like Stitch Data (there are hundreds) you can go through valuable exercises like combining paid data with CRM data.
Martech tools all eventually follow the path of combining multiple functions, which makes sense, but also often means bloated costs. Today there are hundreds of powerful, affordable tools that perform one two functions really well. Tools like Autopilot are incredible for marketing automation. SendX and ConvertKit are great for email nurturing. Small Chat is a free, direct-to-Slack website chat tool. And the list goes on.
If the tool doesn’t integrate with a key piece of your stack, use Zapier as a proof-of-concept, or deal with the lack of integration until you see (or don’t see) traction.
Remember, the goal is to prove the value of a tool or functionality as part of your customer journey. Figure out if it works first, then you’ll be able to justify the cost of a more robust tool. We will say, though, that many new players in the martech space will actually integrate and scale, which will increasingly give the heavyweights a run for their money—which means more money in your pocket.
For more technical teams, there are a growing number of tools that can be run as self-hosted apps at zero cost (other than the server space you buy to run them, which you’re probably already paying for). Check out the list on Open Source Builders for options to replace pricey tools like Intercom and more (opensource.builders).
Clean and efficient is the new enterprise feature set
A clean and capital-efficient martech stack is quickly becoming the new standard, replacing bloated, enterprise tools. There’s never been a better time to bite the bullet, take an honest look at your software costs and customer data, then build an engine that will run long and hard and, most importantly, earn every dollar it costs and then some.
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