With host Darrell Alfonso
This blog was adapted from BrandMaker’s: “Marketing Ops Now” podcast. Each installment discusses valuable ideas for both management and marketing executives. You can listen to this 20-minute podcast here.
When selecting solutions or managing an entire Martech stack, there is always this notion of having too many solutions in place. Our first instinct is to get rid of duplicate solutions and consolidate the stack. Even better, we should go for that one solution that covers all our needs. And we have to get it right the first time.
Unfortunately, the reality is quite different. Data from hundreds of real-life stacks shows it is time to debunk that notion. In recent research, a link was made between Martech stack maturity and Martech stack size. There is a relationship between the number of solutions in a stack and the Martech maturity as perceived by its users.
The maturity is based on the 5 levels as defined by Carnegie Mellon University. The maturity levels are covered in an earlier article and podcast. To give you the short version, level one is called Initial. Software is selected and used in an ad hoc fashion. level three is where we have standardized and consolidated processes and systems. At level 5 companies are in a continuous optimizing state, automatically responding to changes in the markets.
Source: https://www.linkedin.com/posts/fransriemersma_marketingautomation-digitalmarketing-martech-activity-6834001082839044097-Ycmq/Many believe that “the simplest stack with the fewest possible products is best”. One could state the hypothesis that more mature stacks have fewer duplicate solutions because administrators get rid of redundant solutions. In essence, more mature stacks have fewer solutions. The graph shows the opposite: the more mature, the more solutions. But there is a limit to that number of solutions. That limit is at around 50 Martech solutions. Once companies surpass the threshold of 1.000 staff members or $100.000.000 yearly revenue, the number of Martech solutions stabilizes at around 50 solutions.
Another trend we see is that companies that surpass the threshold of $100.000.000 revenue have lower marketing to marketing operations staff ratio.
DemandSpring 2021
Team versus technology maturity
So if marketers consistently rate their stack higher with more solutions, then a lower ratio might also indicate a higher maturity. Now we have brought in the second type of maturity, that one of marketing operations skills and experiences.
Recently a client started a software selection for a B2B eCommerce platform for their four business units. The question was if they should go for one solution for all business units, or one solution for every business unit? Surely, having one system in place is more economical. But the requirements of each business unit were very different. One system that covered all requirements did simply not exist. It turned out that their marketing operations team was non-existent and their requirements list was immature. They needed more time to understand which requirements really had a business impact and which ones did not. The answer to the question was simple. Select one solution for all four business units when the maturity of your team and requirements is high. Select one solution for every business unit when your maturity is still low.
It looks like teams need to go through different learning curve stages. That makes Martech’s maturity less about the maturity of the tools and much more about the actual maturity of the team. Martech maturity is perhaps less about particular solutions and how long it’s been present in the stack, and more about practice-based maturity.
“Your platform is only as advanced as the person operating it.”
Survey respondent – DemandSpring 2021
Micro-consolidations
Where we have been expecting consolidation in the Martech market for the past decade but not seeing one, we actually do see many micro-consolidations in stacks. If you take a closer look at the first graph, you’ll notice that every 5 to 10 new solutions are followed by a small dip. As if a sequence of micro consolidations takes place as we grow our stack.
“You can’t make a baby in one month with nine women”
Warren Buffet
It is almost a cyclical way of expanding our stack. We start using new solutions and then almost through the process of using some of these tools and realize what really brings the business forward. We learn about the benefits and limitations of the tools we picked. So instead of not having enough experience, we now have a really clear view and judgment on what value a solution brings. We are able to articulate this to the team and organization.
When your team is below maturity level three, trying out several different tools for while might not be a bad idea. Once the team reaches level three, they’ll be able to clearly articulate to the management why that one tool brings value and makes those other two solutions redundant.
Between levels three and five, marketing operations teams keep adding solutions up to around 50 solutions in total. What probably happens is that a consolidation of systems of records has already taken place (a few times) and now we have the opportunity to broaden and deepen the Martech capabilities of our stack with more niche solutions.
Boost your Martech learning curve
All the commonly heard statements we quoted in the first paragraph are level three statements. But we cannot start at level three if we haven’t gone through the learnings of level one. So getting it right from the start is like starting in the middle of the learning curve. It is normally setting ourselves up for (the wrong type of) failure. That most probably will go wrong and create avoidable disappointments with new solutions, regardless if the solutions are a fit or not.
Having duplicate solutions is not always a bad thing, as long as your translate the learnings into the requirements for the next solution. All too often we hear requirements summarized in software selections: “anything is better than what we have now”. When requirements are not based on insights from retrospectives they will not bring the company forward.
To learn what business units actually need we can actually give them the freedom to use some of the technologies that are really right for their purpose. Maybe they do get to duplicate their own tech stack, but only on the condition that the interface of how they share that data and adhere to the governance model of the organization as a whole.
This is where marketing operations comes into play. In an earlier podcast, we talked about marketing operations providing the guardrails for marketing for the use of Martech the right way and when and how we should be allowed to duplicate. There is another reason to bring in marketing operations specialists. They are the best way to speed the company’s learning curve up.
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BrandMaker’s “Marketing Ops Now” podcast series has officially started. In each podcast industry luminaries and deep thinkers share valuable marketing ops ideas for both management and marketing executives (some worth stealing).
For every podcast in the series we’ll do a blog post to share the highlights with you. You can listen to this 20-minute podcast here.