The Colossal Mistake Many Brands Are About To Make
According to recent research from Garter, nearly 60% of marketing leaders are going to make a decision that could prove to be fatal for their long-term health of their brand.
The pandemic has affected every single human on the planet. That is hardly breaking news. All of our collective lives have been impacted in one way or another. The effect the pandemic has had on business and brands — depending on the industry — ranges from severe to catastrophic.
There have been many, many pieces written about this, how some brands will not and have not survived and even how some entire industries may not survive. Moreover there have been articles ad nauseam about the effect the pandemic has had on budgets. From employees to insurance to technology — no one or nothing is safe.
Think Before You Slash
Here’s the opening paragraph from a recent press release from Gartner:
“Despite surviving the first round of COVID-19 related budget cuts, nearly 60% of marketing technology leaders now say they expect moderate to severe cuts to their martech budgets, according to Gartner, Inc. These highly protected martech investments are now under the microscope, with 35% of marketing technology leaders initiating a process to overhaul their martech stack.”
It is not hyperbole to say the nearly 60% of martech leaders considering making moderate to severe cuts to martech budgets would be an epic mistake. Yes, epic.
Because it’s too damn easy that’s why. It’s too easy to just point your finger at a high-ticket cost and automatically look to cut there first. The ramifications are just too vital to not think before you slash.
Ben Bloom, senior director analyst in Gartner’s Marketing practice absolutely nails it:
“Low levels of utilization present a real risk for marketing organizations, particularly in light of looming budget cuts or ones that have already hit. Three quarters of marketing organizations that are facing budget cuts also struggle with utilization. That’s a real gut punch – one that demands attention to streamlining technology acquisition and improving usage.”
The KEY WORD here boys and girls is utilization or lack thereof i.e. “low levels of utilization.”
A year ago, the same research firm Gartner, revealed findings which I would say are pretty germane to this topic. The headline of that release:
“Gartner Says Marketers Utilize Only 58% of Their Martech Stack’s Potential”
Wow are we seeing a trend here or is it just me?
FADE IN on Zoom call which includes a brand’s CEO, CFO, CIO and CMO circa October 2020.
CEO: Ok, we need to slash budgets and fast. What are our biggest expenses?
CFO: Well we spend upwards of 30% of the entire marketing budget on martech.
CEO: What’s martech?
CIO: It’s short for marketing technology.
CEO: Is that important?
CMO: Yes, it is VERY important.
CIO: I agree, it is vitally important.
CFO: Well, maybe. But do we really need to be allocating that much money to it?
CEO: The answer is NO! Slash the – what is it called again? the mark-tech budget immediately!
Patrick Adams — Forbes Top 50 CMO’s | GM I Chief Marketing Officer |Ex PayPal, Victoria’s Secret, Bertelsmann, Citi, Chase — told me something that is very germane to this topic. Earlier this year we were discussing the reasons CMOs have the shortest life span in the entire c-suite and said he believes the main culprit here is a pervasive lack of understanding of marketing amongst our CEOs, CFOs, COOs (the C level hiring managers) in corporate America.
You can absolutely apply the same logic when it comes to martech and the operative word above when it comes to hiring is without question the operative word here: pervasive.
I was of course being sarcastic re: the make-pretend conversation that surely never happens between a CEO and others in the c-suite as it relates to martech. Of course I was being sarcastic! 😉
The bottom line is I get it. I understand these are trying times and financial belts need to be tightened. All am I recommending is before anyone moves that belt up a notch you stop and think: Think then find out what exactly is being utilized when it comes to a given martech solution. Are you getting maximum ROI? Is your staff squeezing every ounce of that martech for what it’s worth?
If they are and you STILL need to cut, just be prudent and consider the long-term ramifications. How, if at all, will this affect your customers? Is there anywhere else you can cut?
Just think before slashing.