Why Martech Alignment Matters More Than Features

Sean Nolan: Hello and welcome to CX Today. I’m Sean Nolan. Today, we’re discussing why martech investment can sometimes underperform, the subject of a recent report from the CMO Council. Here to discuss why that is and how to prevent it is Tom Kaneshige, Chief Content Officer at the CMO Council. Hi Tom, thank you for joining me on CX Today. To start, I want to dive into the Apex Martech Matrix report you recently published. Can you tell me about the report and its big takeaway? Tom Kaneshige: It’s a report, but it’s also a new way to look at martech investments. It is exciting because it fills a blind spot in martech evaluation. That blind spot is a data-based view of what practitioners are doing with technology, what they are choosing, and their maturity level in terms of getting value from those investments. Sean Nolan: Through the model you have created, one thing that stands out is that more features within a martech stack do not automatically mean a more successful deployment or significantly better results for the marketing team. Why did that come through in the report? Tom Kaneshige: Before we get there, let’s describe what we are actually doing. MartechTribe is our partner. Over the past decade, it has used publicly available data to conduct deep dives into martech stacks. It knows what companies are using down to the tool level. Using that same public data, it has also built a sense of companies’ organizational maturity in terms of getting value from martech investments. That maturity-level data comes from sources such as case studies and job openings. What it found was that buying “best in class” is not really what the top performers are doing. The top performers are being much more intentional. They are aligning their purchases with the capabilities that they have. It is a movement from best in class to best alignment. Sean Nolan: Would you say the highest-performing marketing teams were those that demonstrated that high level of alignment? It was not so much about the amount of money spent on the tool, or necessarily buying best in class, but the intentionality and alignment that unlocked the next level of performance? Tom Kaneshige: That’s right. If you look at the two factors, technology capabilities and organizational maturity, which is the ability to drive value from that technology, you have to decide which one to lift to create that alignment. That depends on different marketing technology categories. In one category, you may want to invest more in the technology. In another, you may want to invest in organizational maturity, training, people, and workflows. Take marketing automation platforms. The technology available has a wide variation in capabilities. You need skills to drive value from a marketing automation platform, but more as a baseline. The real difference in your ability to get more value depends on the technology you choose to invest in. High performers understand that and will put more money into the technology. The flip side is email marketing. The technology is relatively mature, so there is not a big variation in capabilities. The real value is in how well you use the tool. That includes deliverability, handling bouncebacks, staying off blacklists, and maintaining list hygiene. Those areas lean more towards skills and organizational maturity as the route to getting more value from the technology. That is a case where you would want to invest in organizational maturity. These are two extremes, of course. The report covers thousands of tools and features. Sean Nolan: I want to explore skills and training further. Depending on the tool, extra spending cannot always outperform the right skills and expertise. With email, for example, the ability to manage lists and execute well may outperform the added value of a more expensive automation platform. Can you expand on the significance of skills and training? Tom Kaneshige: If you look at organizational maturity, skills, and training, the traditional thought was that if I put more money into it, I will get more value. But if you consider that as an investment, and compare its return with buying more technology or more feature-rich technology, investing in skills is not always the payoff. Marketing automation platforms are one example. But if we are talking about skill sets more broadly, the CMO Council produced a report called Power Partners. It looked at how CMOs are redesigning workflows to take advantage of AI’s strengths and human marketers’ strengths. The organizations doing that best are showing the most success and setting themselves up for the future. Other companies are simply placing an AI layer on top of what they already have rather than redesigning how they work. What that does is expose your flaws at speed and scale. The emphasis on skills and training is paramount if you want to make AI work. But that type of change management is very difficult. When I talk about skills and training, it will be very different from the past. Previously, you would add skills and hire new capabilities. Today, you will have to change the way you work. That requires a completely different mindset and an openness to change. Sean Nolan: It is not simply about hiring someone with a new skill set. It is about changing workflows significantly to match an ever-evolving technology landscape. I also wanted to ask more broadly about the common mistakes or challenges CMOs face when building out their tech stacks. What stood out in the report? Tom Kaneshige: Marketers will not like to hear this, but there is a prevailing idea that marketers fall in love with the latest shiny object. In the age of AI, that kind of waste does not work. You need to get value from investments as soon as possible. The report found that outperformers focus on speed to value in their investments. One of the key themes is that you have to be more intentional about driving value. The next shiny object is a problem in the moment, but it also compounds the problem when AI arrives in different platforms with different capabilities. If your foundation is not right, you are going to move quickly, but you are going to move quickly in the wrong direction. Sean Nolan: There is such a fast pace of development now. If teams get distracted by the most impressive or flashy technology, it can be a major distraction. Having core metrics, a strong foundation, and clear objectives can keep marketing leaders focused on what they need to do, rather than becoming overly focused on the tools they use to get there. Tom Kaneshige: One metaphor we use to explain the Apex report in more accessible terms is evaluating a Ferrari. A Ferrari sits in the upper-right quadrant of cars because of its performance. You can fall in love with the Ferrari and want it for your organization. But if your organization is geared toward driving on dirt roads, you do not want that car. There is nothing wrong with the technology. But the alignment is wrong. If the alignment is wrong, you are not going to get the value you need. You might say: what if I invest in maturing the organization to get there? That is valid, but it will take time. Right now, with the speed AI is bringing to CMOs, you have to get to value much faster than that. Sean Nolan: Finally, looking ahead, do you have any predictions for how AI will continue to shape and change the work of the CMO? What should CMOs start thinking about now? Tom Kaneshige: That is a loaded question. I have been at the crossroads of business and technology as a journalist for a long time. I have seen some fantastic paradigm shifts: client-server, Mosaic, mobile, and SaaS, which was previously called ASP. I have seen incredible shifts, and I have seen a lot of busts too. But the future has never been more uncertain than it is with AI. It is unlike anything I have seen. I cannot predict the future, but I can say with certainty that there is going to be change. There will be massive change and massive disruption to the marketing department. Marketers are smart. They are moving and trying new things. They understand the value AI can bring, including hyper-personalization, and they know they have to move quickly. The smart ones are getting ready by getting their foundation right. Some marketers are using AI to replace capabilities, save costs, and improve production efficiency. Only a handful are doing that. The vast majority are looking to AI for new capabilities. When you think about the future, you do not know exactly what you are going to see, but you are going to see something very different. Sean Nolan: Perhaps the takeaway is that adaptability, flexibility, and the ability to respond to change are the most important things to keep in mind as the future remains uncertain. Tom Kaneshige: I want to add to that. I have been having many conversations with elite martech experts, and there is a feeling that a company culture of adaptability is going to become more important than, or perhaps replace, a company culture of customer centricity. Today, it is all about the customer. Tomorrow, it is going to be about how you adapt and how quickly you can adapt. Sean Nolan: That is a transformational shift in philosophy, and something marketing teams and leaders should keep in mind. Tom, thank you so much for your time. It has been fascinating speaking with you. Tom Kaneshige: Thank you for having me. I appreciate it. Sean Nolan: Thank you for watching. Keep coming back to CX Today for more interviews with the leaders defining the future of customer experience technology.