At the onset of the COVID-19 pandemic, martech was a sector unaffected by the first blow of budgetary restrictions. However, as a consequence of coronavirus-related disruptions, almost 60% of marketing technology professionals foresee moderate to severe cutbacks to their martech budgets, as per Gartner. Despite these cuts, many marketing firms continued to struggle even with their existing martech platform usage.
As marketers spend funds on unused tools and add-on applications, this lack of effective utilization only drains funds – that could have been redirected to other campaigns. Unused Martech can also be due to internal challenges, like a lack of time, effort, or competencies.
As the purse strings tighten, industry professionals need to be able to tackle their underutilized martech budget and maximize their tools.
The State of Martech Utilization Today
The efficient use of existing capacities has decreased since 2020, in spite of substantial investments in marketing technologies. According to Gartner, marketers report using only 42% of the features that are offered in their martech platforms, down from 58% in 2020.
In 2022, CMOs reported allocating 25% of their total marketing budgets to martech. Interestingly, despite volatile spending plans in the past and the present economic challenges, CMOs continue to prioritize technology investments.
A trio of variables accounts for the 16-percentage-point decline in martech utilization over the last two years.
- Significant overlapping between marketing technology solutions
- Difficulty in finding and attracting talent to foster adoption/use
- Marketing technology’s inherent intricacy and extensiveness
Regardless of the causes, unused technology can cost the team and the organization significantly more than just the cost of a subscription.
What Does Martech Underutilization Mean for Companies?
Teams regularly invest in customer relationship management (CRM), automation software, or analytics tools in a bid to boost collaboration, remove divisions, and make themselves more efficient and effective. A few months later, however, this software generally deteriorates into a disappointing mess of unfinished projects and stockpiles of technical debt.
These situations can place organizations at a competitive disadvantage by preventing them from capitalizing on available opportunities. This makes it tough to act fast on leads, create engaging experiences, and facilitate cooperation among marketing, sales, or customer success.
In addition, many martech solutions take pride in their “bells and whistles.” These cloud-based offerings encompass the entirety of digital marketing, but just a tiny percentage of businesses will actually use all of these functionalities. Implementing the solution requires a great deal of planning and expertise. You may lack the data quality needed to launch projects that these tools can effectively leverage.
The above scenario is not what you envision when you invest in a martech stack.
When the martech stack isn’t used properly, it results in poor adoption and, eventually, employees finding alternative methods and workarounds to complete their tasks, creating silos and increasing costs.
When martech adds to costs instead of earning revenues, budgets may shrink.
Marketers Are Struggling with Martech Stack Complexity
Did you know that nearly half of marketers find their marketing technology to be overwhelming? According to research, most B2B professionals at the mid-market level as well as large businesses, believe that their current marketing technology systems are too complex.
When asked which statement best represents the general difficulty of their existing marketing technology system, nearly one-fifth of survey respondents selected “more convoluted than a black hole.”
Unsurprisingly, research reveals that over one-third of B2B marketers use over ten technologies. This is closely followed by content management systems (38%), marketing automation platforms (35%), consumer data platforms (33%), databases for marketing (32%), and data management services (31%).
This complexity can be attributed to a wide range of factors, including the absence of integration that calls for manual processes and inactive or unnecessary functionalities.
How to Improve Martech Budget Utilization
Companies looking to optimize their martech budgets and unlock the most value should:
1. Make the big decisions before investing
Before investing in prohibitively expensive martech solutions, or if you’re in the midst of a renewal, evaluate what you hope to achieve with the tool. Can you use every function? Conversely, does the solution have the capacity to grow with your organization? Collaborate in this process with your sales, marketing, and customer success teams.
2. Strengthen your data foundations
Analyze customer data and marketing functions when examining the various available marketing technologies. Several CMOs who encourage interconnected and highly customized customer experiences across every point of contact look at customer data from an enterprise-wide standpoint. The use of sophisticated analytics, artificial intelligence, and machine learning by the marketing team can be supported by an integrated consumer dataset. Otherwise, such investments might lead to little to zero ROI.
3. Investigate the martech stack even if the outcomes are positive
There is a chance that marketers accustomed to expansion will scrutinize and discover ineffective solutions. Overoptimism is an important risk that might impede crucial business realignments like budgetary realignment. Regular martech audits, regardless of marketing efficacy, are an efficient strategy to assess this. It will also help define the ideal vendor strategy.
4. Spend time on vendor analysis
Marketing executives have to find a balance between the speed of incorporation and the possible complexities that might accompany best-of-breed standalone tools. To do this, you can request every – even the largest – martech vendors submit proposals for your business based on best-in-class capabilities. Thorough vendor assessments will determine which vendor competencies support your organizational goals and targets.
5. Explore possibilities around artificial intelligence
Martech executives can use AI algorithms to scrutinize vast quantities of user data, design personalized experiences, segment and categorize buyers according to their preferences, and forecast future actions, given that artificial intelligence (AI) is now at the center of most conversations.
They may additionally save both money and time by using chatbots powered by AI to react to customer queries while offering support around the clock. AI can significantly boost your returns from martech spends; companies need to partner with industry-leading vendors to take advantage of this.
6. Build internal capabilities
The ultimate objective of a martech platform is to increase efficiency and teamwork, boost the consumer and workforce experience, and streamline essential business processes.
Companies, however, shouldn’t depend on employees to sort things out on their own. Training sessions should instead teach teams how to incorporate the new tool into their current processes. You can encourage everyone to share best practices or “hacks” they’ve devised over time while using the tool. They can also participate in customer events and enroll in product forums.
3 Best Practices to Minimize Martech Underutilization
Underutilized martech budgets and tools pose a major challenge for companies looking to grow after the pandemic. Not only does it lead to a drain on your investment, but it will eventually hold back collaboration, campaign success, and growth. If you intend to control martech sprawl in 2023, here are the best practices to follow:
- Include adoption and utilization goals for marketing technology into team performance criteria. This will encourage the right implementation and minimize investment waste.
- Manage the risk linked to expensive investments in integrated systems. The objective is to prevent vendor lock-in across all martech prerequisites. Establish alternative possibilities to maintain negotiating advantage and consistently check the vendor’s stated competencies.
- Review your strategy for encouraging customer journeys. You have to guarantee that martech and IT work together to achieve strategic goals and keep all channels functioning and optimized.