Adobe’s recent acquisition of Marketo had the blogosphere abuzz on what the acquisition means to the martech industry (read here, here, here). Marketo is another in a long list of marketing automation platforms devoured by larger players (e.g. Eloqua, Aprimo, Silverpop, ExactTarget, Pardot to name a few). All this talk about winners-versus-losers, the latest unicorn app, network power, market consolidation or some enterprise player’s creation of a “seamless end-to-end-customer-experience” tool is a huge distraction. The hype is for investors, not marketers.
It’s important for marketing and leaders in professional services firms to not get caught up in the euphoria or fall into analysis paralysis determining winners in order to make the “perfect” buying decision.
These technologies are valuable and make Marketing’s job easier (most days). They have improved Marketing’s strategic contribution to the business and enhance a firm’s ability to deliver client-centricity at scale. No matter how hard Marketo, Salesforce, HubSpot, et al try to turn their tools and companies into religious cults, in the end, they are just tools.
Never be deluded into thinking that the primary concern of these companies is creating value for you, the customer. The game is value creation, but its primary focus is value is for shareholders. That value is realized only at a liquidity event like Marketo’s acquisition by Adobe (or Eloqua, ExactTarget, Pardot, et al) or HubSpot’s IPO. The only relevant metric that has any relationship to you as a buyer is theSaaS company’s churn rate. The churn rate determines how fast a SaaS company can acquire and “monetize” its client acquisition and get to a liquidity event. Period.
Keep these 4 things in mind and you‘ll survive the market euphoria and make smart technology investments that create value for your firm:
- Be very clear on the problem/potential to be addressed
- Outline and assess the software’s capabilities in solving that problem right NOW
- Determine how fast you can achieve a positive ROI
- Assess how quickly, cheaply, and effectively you can get YOUR data out of it and into another platform
1. Clearly defined the problem/potential to be addressed by your martech solution
If you have not clearly defined the problem to be solved, built consensus on the need to solve it, don’t buy anything. If you are buying a technology because your competitor has it or it’s the latest internet phenom, stop. Process and people proceed technology. Be very clear on the problem you are solving and your firm’s level of sophistication for said technology. Just because you want to market like Apple, doesn’t mean you’re ready to do so. I could write a book on failed CRM and marketing automation implementations that were unwanted, unneeded, and ill-considered.
2. Outline and assess the marketing software’s capabilities in meeting your needs right NOW
If you need your marketing software to do X, Y, and Z to accomplish your goals today, but it only does X and Y well at the moment, don’t buy it because Z is coming in the next year or development cycle. Be very clear on what you TRULY need to get the job done TODAY and don’t get caught up on some cool functionality that won’t be used. Cost cutting, competitive threats, shifting priorities, technical hurdles, AND investor demands often redirect martech company development efforts. Don’t bet your success on a timely promise.
Pie in the sky promises of future functionality serve the VCs and technology companies’ storyline–not a business leader’s need to satisfy a client’s or practice’s need today. I suspect that far more future integrations, expanded capabilities, improved UIs, and deeper data sets have closed a lot more business for software companies than those promises have delivered timely ROI to customers.
3.Determine how fast you can achieve a positive martech ROI
Software is a tool and its real cost is never the purchase price. The cost lays in the time and resources getting it up and running and keeping it running. If you cannot have your software up and running within a week (You read that right–one week), you should consider another alternative.
By running, I mean data imported (or not, if starting from scratch) and a handful of basic functionality like email templates, lists, conversion paths, tags, tracking, and dashboards up and producing a feedback loop. If the system is so complex or your vision so grand that you cannot start demonstrating a return via market learning/understanding, you’ve chosen a system that is a bad fit for your needs and/or level of sophistication.
4. Assess how quickly, cheaply, and effectively you can get YOUR data out of it and into another martech platform
You will change systems. Your requirements will change; the market will change; your provider will go another “strategic direction.” Keep in mind that martech simply automates a process; it is NOT the process! Your platform should empower your learning–not learning about the software itself, but a better understanding of your prospects, clients, and processes. If all your learning is about a hyper-specialized proprietary piece of software, you’re in a prison. Most of what you should be learning should be the knowledge that transcends platforms. That learning transfers A LOT faster when you are able to retain and exploit historical data.
Your provider should ensure that you can get YOUR data–ALL OF IT–at a moment’s notice and in a user-friendly form. That means access to foundational data in CSV files, raw image files, HTML, custom code, and analytics. This allows you to easily and quickly transfer to another platform if and when it’s time. If your system does not allow you to do this, your firm has to painfully reinvest in these rudiments all over again on the next platform–and that costs money, time, AND your reputation.
The world of startups and venture capitalists is fun and exciting. I spent years in that space when I worked with Andersen and came to appreciate the very important role entrepreneurs and VCs play in our economy. Entrepreneurs live to solve client problems and VCs live to make money. Make no mistake about who sets the priorities. VCs set them and the priority is getting to a liquidity event ASAP–regardless if that impacts your firm’s priorities. All the market euphoria and earlier examples demonstrate this fact.
Don’t obsess over who winners and losers will be in the industry. Instead, buy software that can
- Clearly defined the problem/potential to be addressed
- Outline and assess the software’s capabilities in meeting your needs right NOW
- Determine how fast you can achieve a positive ROI
- Assess how quickly, cheaply, and effectively you can get YOUR data out of it and into another platform, when necessary
Save your euphoria for something more important.
Founder & CEO
Jeff’s teams and strategies have helped the world’s top professional services firms achieve industry-leading growth rates, optimize marketing investment and maximize brand value. He was the SVP of Marketing at Genworth Financial, the Global Marketing Leader at Hewitt Associates, and held senior roles at Towers Perrin and Andersen.
Professional services marketers fight hard to achieve their titles. Newbies start out as coordinators, move to managers, if they prove themselves, become directors, if they stick around long enough, and often become CMOs when they jump ship and negotiate the title...
Technology is dramatically shifting marketing, and most professional service firms are being left behind just as the broader market—both B2B and B2C—are applying decades-old professional services marketing tactics to their own. If your understanding of marketing...
What is the "optimal" marketing organization? is a question that I get asked very often. It is a great question, but it misses a bigger issue. Marketing in professional service firms can be MESSY. Marketing departments are tossed hither and yon as firms wrestle with...