How to Build a MarTech Stack
- A strategically designed Marketing Technology (MarTech) stack replaces ad hoc and piecemeal systems with a holistic software portfolio. This technology strategy helps buyers buy, drives measurable marketing goals, maximizes investments and future-proofs technology investments.
- A smartly designed marketing technology stack creates a competitive advantage as it defines an overarching architecture that blueprints the applications needed to directly acquire, grow and retain more customers.
- It's not about acquiring more of the latest technology that determines your success. It's about acquiring technology that strengthens your strategic technology stack and drives achievement of your most important marketing objectives. And it can be done in a 3-step process, shown below.
How to Build a MarTech Stack
Marketing technologies are needed to bring process automation, information reporting and scale to the organization.
Selecting the right marketing software is essential to efficiency and an underlying requirement for Marketing Transformation.
But that doesn't make it easy. Most marketers are unsure of how to build a MarTech stack.
Gartner advises that marketing software now accounts for 29% of the marketing budget, making it the single largest expenditure category. However, the Marketing Technology Industry Council advises that "only 12% of marketers are seeing significant value from their technologies."
That's because real challenges stand in the way to success.
The MarTech landscape is complex, and the volume of applications can quickly make it feel overwhelming.
Marketers struggle to align limited budgets with what looks like a sea of unlimited technologies. And unless they demonstrate clear payback or measurable ROI from their investments, they put those budgets at risk.
What's needed to escape marketing mayhem is an approach that separates technology hype from reality, directly aligns technology with measurable business-outcomes and creates a simplified roadmap for technology planning, procurement and payback.
Here's How to Build a MarTech Stack
Use this 3-step blueprint to define the applications that drive operational effectiveness, maximize your ROI and future proof your investments.
The goal for the Technology Strategy is to identify the most effective marketing technologies that drive the most important business outcomes. And because it's not realistic to acquire every helpful technology at once, the strategy should be designed as a roadmap to be navigated over a multi-year period.
That roadmap will plot the specific apps that drive slated marketing objectives and methods.
Those methods may include things like harvesting customer insights for improved target marketing, omni-channel engagement for improved lead acquisitions or mass personalization for improved lead conversions.
For the marketing strategy to be effective, it's critical that these methods be directly linked to the most important outcomes, such as increasing customer acquisitions, customer share and customer retention.
Without a MarTech strategy, most companies acquire piecemeal technologies to solve an urgent problem. That may help with the problem of the day, but quite often contributes to software sprawl, data siloes, integration challenges, and much more IT resourcing. It also fails to contribute to a more strategic technology portfolio.
A MarTech Strategy Design Approach
Starting with strategy may seem like common sense but for leaders unsure of what a strategy should include, how it should accelerate execution and what measurable benefits it should deliver, it's not commonplace.
A marketing technology methodology can help. One we routinely use with clients is called PACE.
PACE is a tech strategy that aligns business benefits with technology capabilities.
More specifically, the PACE model aligns the methods marketing leaders use to create competitive advantage, described in terms of common ideas, different ideas and new ideas, with a technology portfolio that segments the MarTech stack into layers called Systems of Record, Systems of Differentiation and Systems of Innovation.
The benefit of the PACE model is that it allocates more investment to the capabilities that drive the most business value and less investment toward capabilities that don't deliver differentiation or competitive business advantages.
Many people believe PACE was created by Gartner. It wasn't although Gartner's promotion of this method has made it very popular.
One last point when defining your MarTech strategy. Research shows that most marketers use a small fraction of their marketing automation software and other apps. Start your strategy by assessing what you have and how much of it you are using. Using more of what you already have will accelerate progress, reduce the volume of apps needed and decrease costs.
MarTech Stack Architecture
Now its time to identify the marketing software apps needed.
And this is another opportunity to simplify by categorizing software into 3 tiers, as shown below.
Below are key insights for each tier.
A good MarTech stack is built on a solid foundation that starts with Platform Solutions.
The goal here is to use platform solutions that provide the most capabilities from a single application. That results in fewer apps that do more. It also facilitates end to end business process automation, decreases system integration and consolidates data siloes for easier and more effective reporting.
And because platform solutions generally have ecosystems of integrated third-party apps they facilitate extensibility which helps future proof your technology investment.
The three most important platform solutions are the Marketing Automation Platform (MAP), the Customer Relationship Management (CRM) platform and the Customer Data Platform (CDP).
A common mistake is not recognizing how two platform solutions can come together to make each more effective and accommodate more capabilities.
For example, while the MAP is the primary marketing system it does not live in a vacuum. MAP and CRM are symbiotic and mutually contribute to lead acquisitions and conversions.
The MAP must forward sales-ready leads to the CRM system. But most only transfer the leads and their digital footprints. That's because for most MAP software that's all that the packaged integration delivers.
Here is another opportunity to use more of the marketing software you already have.
The default MAP and CRM integration is only the starting point.
As highlighted in the image below, several additional integrations or data exchanges can be configured to drive improved customer intelligence, campaign effectiveness, offer conversions, contextual customer engagement and several other capabilities that increase lead acquisitions and conversions.
There are additional considerations when designing the MAP and CRM integration. For example, when salespeople view lead data in CRM, is the lead history simply a window to the MAP system or are the lead digital footprints and behaviors transferred from the MAP into the CRM?
The first scenario is the most common. But the second scenario contributes to more downstream capabilities, such as using the lead data for CRM workflow processes, to deliver alerts or update CRM dashboards.
The point here is that when designing the MarTech platform you need to think beyond each single solution and consider how they can work together to deliver more significant benefits. And because platform solutions have more breadth and depth than any other tier in your MarTech stack they will offer the most possibilities for these synergies.
While a single platform solution can replace dozens of standalone marketing apps, they can't do it all. A smart selection of best of breed apps is needed to fill the gaps and accelerate certain marketing objectives.
The goal here is to selectively curate best of breed marketing technologies that deliver distinct capabilities needed to achieve unique marketing objectives or business outcomes.
Many point solutions solve a single, particularly difficult and often very important problem. For example, campaign attribution apps correct what is often inaccurate campaign ROI reporting. Or conversational marketing apps increase anemic conversion rates for online lead acquisitions.
Point solutions deliver capabilities not available in the MAP or other platform solution. But they may be part of a platform ecosystem which generally means they will offer a consistent user interface (UI) and packaged integration. That makes them quick to deploy and relatively easy to maintain.
The tradeoff with these best of breed solutions is often risk and impact. Because they are generally delivered by small innovative startups, they come with a much higher risk. Because they solve big problems, they deliver a big impact.
When considering the risk and impact, many evaluators come down to a decision of added value with the point solution versus good enough functionality with a more generic capability built into the MAP.
Another factor that effects point solution planning is the sheer volume of marketing apps to consider.
This is another opportunity to create marketing software categories to filter an overwhelming number of choices into smaller and more manageable segments.
Our experience shows there are two methods to do this. You can create software categories that drive marketing capabilities or marketing capability categories that are empowered with software.
In the first scenario, the 7 tech categories we use include the following:
- Content creation and management apps.
- Marketing Automation Platform (MAP) gap or extension apps
- Campaign management and lead acquisition tools
- Lead management software
- Brand and social software
- Customer data management tools
- Reporting and analytics tools, including AI
With the second method, the categories are more aligned to the customer lifecycle and lead-to-revenue process. The 6 categories we use include the following:
- Customer intelligence technologies, which may include website analytics, identity resolution and tools that capture digital footprints, lead behaviors and customer sentiment.
- Lead acquisition technologies, which may include tools for SEO and SEM, buyer intent signals, A/B or multivariate testing, and support for various campaign types such as Account-based Marketing (ABM).
- Lead conversion technologies, which may include tools for CDP, sales and marketing alignment or eliminating lead leakage.
- Customer growth technologies, which includes apps that promote increased offer and sales effectiveness (i.e., Next Best Offer algorithms, up-sell, cross-sale, bundles and capture management) and customer loyalty programs.
- Customer retention technologies, which include account health score calculations, customer experience (CX) programs, and predictive models that identify at-risk customers or predict customer defections.
- Operational execution, which may include Marketing Resource Management (MRM), content management, or a knowledgebase to make knowledge accessible, repeatable and turn knowledge into a company asset.
Our preference is the second approach as solutions tend to be measured for their business outcomes, not software features or functions. But we have used both methods and either can be successful.
Lastly, recognize that over time the MAP publishers build or acquire point solutions which means many of the innovative startups have relatively short life spans.
Data & Analytics
The goal here is to identify the best marketing technologies to convert raw data into actionable insights and route those insights to the people that can use them to remedy a variance, implement a course correction, make a more timely and informed decision, or take some other informed action.
Data and analytics make marketers smarter. They show how the brand impacts buyer decisions, how campaigns convert, how leads impact the pipeline and why customers churn.
But for data to improve marketing offers, engagement, conversions, customer experiences and decisions you need processes and tools to harvest, convert and forward data to the person or place it can be applied.
This tier in the MarTech stack needs four things.
- Data Transformation Tools
Data is an asset. But to yield value, the data must be converted from a raw material to a finished product of information or insight. That's best done with a data transformation process, or what is sometimes called a data transformation pipeline.
Much of the data will reside in the MAP. But data will also come from additional sources such as the social sphere, data enrichment providers and other company systems such as the accounting or ERP application.
The most successful marketers are defined by their ability to collect and curate the right data, use data to create differentiating customer experiences and apply data analytics to make insights actionable at every customer interaction or customer decision point. That is those points where customers choose whether to engage or do business with the company (what we often call customer moments of truth).
- Marketing Dashboards
Good marketing dashboards deliver the right information to the right person at the right time. They focus on the most essential key performance indicators and prioritize information based on what's most important to each user.
They show what should be done, in a sequenced order. They aid time management, create a work rhythm cadence and maximize productivity.
But most MAP and CRM packaged dashboards display what is easy instead of what is important.
To a first-time observer these dashboards look good. But if good looks were the factors for success my first marriage would have made it, and marketing dashboards would get much more utilization.
Marketing Analytics Research shows that dashboards achieve up to 30 percent utilization immediately following an implementation go-live. But within 3 weeks that utilization falls to 9 percent. Over time it falls further. The decline is due to dashboards not providing real help to users.
The key to analytics is to translate marketing activities into business outcomes and measure what matters. Defining the right metrics to track progress and prompt real-time corrective action is an essential best practice for achieving marketing dashboard success.
- Predictive Analytics
Marketing analytics convert data into trends, patterns and anomalies that support marketing objectives and revenue impact.
Predictive analytics shift information reporting from hindsight to foresight.
For example, they use Ideal Customer Profile characteristics to identify the highest fit prospects and calculate lead scores to prioritize sales-ready leads.
They apply propensity models to show the combination of offers, content, channels and customer types that will optimize lead acquisitions, lead conversions and pipeline growth.
The best marketing analytics demonstrate how marketing activities impact business outcomes.
The below Predictive Pyramid is a Johnny Grow predictive model that shows how lower levels of execution contribute to the company's priorities. And it's not just predictive, it's interactive to support dynamic modeling and What-If scenarios.
The predictive model is helpful because no marketing program or activity operates in a vacuum. Each has cascading effects that impact many areas and those impacts must be understood when making tradeoffs. This visualization is helpful in determining where to invest your limited time to achieve the biggest uplift.
- Artificial Intelligence
Marketing AI tools include conversational marketing bots, reports with Natural Language Processing to interact with staff using speech recognition and robotic process automation (RPA).
AI is no longer futuristic. It's now embedded in the most common marketing systems, such as Adobe Experience Cloud, Salesforce Marketing Cloud and Microsoft Dynamics Marketing.
Adopters are well past their pilot projects and AI is now in the mainstream for process automation and decision support.
AI now detects sources of revenue leakage that have historically been hidden, such as lead leakage, stalled opportunities or customers at risk of churn.
The question for marketing leaders standing on the sidelines is not if AI will impact their business, but how and when.
Data is the fuel, AI is the engine, and marketing insights are the destination.
No MarTech design is complete without planning for the staffing needed to select, implement and operate a sophisticated technology portfolio.
The goal here is to apply the right governance and resourcing to maximize technology adoption, utilization and ROI.
That will require a mix of talent that includes internal resources and possibly some agencies or consultants.
Less mature marketing groups will need to assess their existing staff skills, identify gaps, plan training and even consider modified incentive plans.
More mature marketing groups may consider organizing their technical staff into a Marketing Ops team for increased specialization or possibly a Marketing Center of Excellence (CoE) for increased scale.
It's also important to identify the debarkation line between MarTech staff and IT. There are no fixed rules but there are guidelines.
MarTech staff are needed for close and frequent integration with other marketers. They are responsible for managing the marketing platform apps and best of breed point solutions.
The company’s IT department is responsible for broader requirements such as data management, integrations with legacy systems, license management, vendor management, regulatory and compliance, and information security to name a few.
A cross functional resource matrix or RACI chart is a useful artifact to clarify technology roles across departments.
The Takeaway for How to Build a MarTech Stack
A MarTech strategy designed to achieve the most important objectives and solve the most vexing problems is a focused approach that replaces the all too common alternative of checking out technologies to solve problems you didn't know you had. And that helps cut through the clutter of a confusing MarTech landscape.
But knowing how to build a MarTech stack means knowing that it's not just about software. It's about the alignment of technology with business outcomes.
That means identifying the best technologies that apply data to deliver differentiated customer experiences, or perform personalization at scale, or deliver relevant offers to prospects and customers across channels, devices, and interactions, or deliver insight-driven and contextually relevant customer interactions to name a few.
It's all about curating a set of technologies to help customers buy. They are empowered and they know it. And the combination of more empowered customers, new channels and devices, and non-linear purchase paths requires technology to engage customers on their terms.
So, to serve and solve for them you need the right technologies to understand them, engage them and guide them through their purchase journey.
Only then will you acquire more customers, gain market share and outperform competitors.