A CMO at an enterprise ended up purchasing a Marketing Automation tool, as he was offered a huge discount on the list price. What he failed to do was to consider the tool’s integration with other technologies in the organization. Also, the tool wasn’t completely aligned with the marketing/sales tactics used by their internal teams. Eventually, the purchase was a waste of time. Though the CMO bought it at a discounted price, the time and efforts he invested in the tool ended up getting wasted. The opportunity cost wasted was way higher than the discount. Thus, to avoid it buying the right marketing tech is important for businesses to succeed.
An investor and CEO, impressed with the CMS capabilities of an automation tool and the dashboard/report it generated, purchased the tool and invested with a third-party vendor to implement the same. He later realised that it did not provide any insights to help the sales and marketing leaders in making better choices. Over time, the tool was of no use and the opportunity cost associated with it was immense.
A report supported by the University of Bristol, BDO, and WARC confirmed that in 2020, Martech was valued as a $121.5 billion industry and represented year-on-year growth of 22%.
According to the CMO Council report, 70% of its members are expected to boost their investment in 2021, mostly focused on Martech.
While the Martech industry is growing fast, there are a number of tools being added to the tech stack every year. With so many options, it becomes difficult for companies to opt for the right marketing automation platform or tool for their teams.
A senior manager in a banking and financial company spent three months shortlisting and selecting a Marketing Automation tool. He came to know just before the purchase that the automation tool did not fit in as per the Reserve Bank Of India (RBI) guidelines and cannot be used, as the company falls under the RBI guidelines.
Selecting the wrong tool may be the seed to failure. In the above case, the senior manager was fortunate that he did not sign an agreement, but he wasted the opportunity and management’s motivation to implement the new automation tool.
Most of the time the decision-makers end up purchasing the tool based on options available in their knowledge or sold by the vendor to the company. The chances are that this approach may cause the tool to misalign with the company’s objective or does little to help in business growth. The above move is called the bottom-up approach.
The bottom-up approach forces the company's processes to adopt the tool instead of the tool adopting the company’s processes.
Contrary to this approach is the top-down approach, where companies first list down the use cases they want to solve and match those with the marketing and sales tactics derived from their strategy. They then match the tool, which is aligned with the tactics and channels.
The top-down approach helps companies to stick to their matured processes and let the tool enable and automate those processes thereby increasing productivity and efficiency.
Companies must always follow the top-down approach to shortlist a tool. The steps must include shortlisting a few options, filter out one based on the budget, look into the available talent internally, check the tool’s integration capabilities with the existing tech stack in the company, check compatibility with legal compliances like GDPR, CCPA, and future scalability/flexibility of the tool.