“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” – Charles Darwin
The concept of “coopetition” has progressively become a strategic driver of the marketing technology ecosystem.
Whether by acquisition, alliances, and/or internal development, all marketing technology (martech) companies encounter different levels of competing rivalries within the ecosystem. Despite growing pains, and many adjustments along the way, the one certainty is that coopetition brings gains not otherwise achievable by individual companies or industries. For example, coopetition helps companies address major technological challenges, foster new partnerships, and advance technological innovations that benefit the entire ecosystem. Now that digital martech ecosystems are better established and have even reshaped some industries, it’s time for martech vendors to up the ante, enabling their clients to increase the value of their investments with them.
Coopetition calls for “competing vendors cooperating” to ensure that their products work together in the best interests of the end-user.
The martech landscape has grown exponentially over the last few years. With so many new and promising options available, companies have continued to invest substantially in many of these applications and systems. According to Gartner, investment in martech represented 26.2% of the average company’s overall marketing budget in 2020. And, of course, such investments come with great expectations for success. Yet while many invest into these technologies with the hope of fueling marketing’s revenue generation – and some do see impact by intelligently integrating and aligning with the companies’ business objectives – many are falling short.
Why is that? For one, companies are only using 58% of their marketing stack’s full capabilities and potential. Another is a persistent inability for large enterprises to integrate them – leading to integration chaos. Enterprise marketing technology stacks have an average of 120 tools and services and grow unruly very quickly when integrations between the products are deficient. These flawed integrations lead to multiple inefficiencies in a company’s marketing function and create gaping holes in a marketer’s ability to efficiently engage customers and provide consistent and relevant experiences. Add to that how difficult and expensive it is to find the right martech talent to help with such a huge mix of technology, and no wonder why companies are underutilizing their martech products. The analysts also agree. Gartner researchers recently stated that, “Translating marketing technology into business effectiveness is correlated with martech utilization.” Although this utilization is affected by many considerations, martech vendors play an important role in helping brands maximize the potential of their stack. Ultimately, these vendors and their partners are equally essential to the prosperity of the client’s martech ecosystem.
But don’t assume your current marketing tech can directly integrate with other tools.
So, wait a minute, aren’t martech vendors client-centric by default? After all, it’s why they exist and what they sell. These companies sell software that automates marketing processes and boosts customer acquisition, retention, engagement, and loyalty, amongst others. They have ecosystem strategies that embrace new relationships and ways of collaborating to benefit their clients. And that is all categorically true. Then if customer-centricity is what they sell, shouldn’t their software just naturally support capability utilization and interoperability? We can wish but that doesn’t make it so. Because the goal to deliver customer-centricity does not translate directly to client-centricity. To be client-centric requires an admission that parts of your product may not be best-of-breed in the overall solution, someone else’s is better, and you need to help your client achieve interoperability.
Global digital transformation was already prompting companies across all industries to comprehensively rethink strategy, business models, technology investments, etc. Then here comes the COVID-19 pandemic adding a whole new layer of urgency for swift and continual change to that ongoing transformation. Adapting to change effectively requires speed, responsiveness, and prowess. That adaptation also demands that all systems used to orchestrate these preemptive messages and actions are well-integrated and optimized.
The growing complexity of enterprise martech stacks is pushing marketers and their companies to re-evaluate their criteria for success.
Gartner has already called out how challenging it is for companies to recruit and train the right martech talent, so why should enterprises also have to deal with the waste of idle software they’ve already paid for just because these products don’t work well together? These days, the stacks of many large companies across industries include dozens of products from competing marketing cloud vendors. Real Story Group’s Tony Byrne recently noted that: “Integration remains a constant challenge and the difficulty getting these vendors to play nicely is emerging as one of the bigger technical stumbling blocks to large enterprise.” It’s not surprising why “integration considerations are increasingly outpacing feature-function effectiveness as criteria for evaluating technology value.”
When enterprises select a marketing technology, they’re buying into the outcomes that application or system promised to deliver. A few examples of these outcomes are higher customer retention, improving customer response and conversion rates, better Net Promoter Scores, and lifting selling effectiveness and revenue. Yet, all these disfunctions due to integration issues end up interfering with and directly affecting their business goals, time to value, and relationships with their customers. These are NOT the results these companies signed up for! Martech pundit Scott Brinker comments that: “Marketers are demanding that vendors solve this problem for them. Vendors who do will take market share away from those who still pretend to ‘do all the things’ and don’t play well with others.”
Over time, another significant obstacle has been the vendor model itself, which is basically sell it and forget it. Gartner analyst Benjamin Bloom recently stated that “Keeping your customers, not just selling the deal, becomes a really critical task.” Marketers need their vendors to help them rationalize what they have and how they can best integrate it with the other technologies in the stack, so they can reach a superior level of alignment with their companies’ strategic initiatives and goals. Vendors that add substance to their clients’ martech investments are in turn cultivating a new way of understanding the value those clients can drive with their customers, bringing more value to them and the ecosystem. All vendors in the stack have a responsibility to enable, onboard, and educate to help their clients achieve maximum benefit. Otherwise, they’re putting their reputations, relationships, and value propositions at risk. And for martech CFOs out there, there is long-term value in this investment, as these integrations drive up loyalty and the stickiness factor.
Despite progress with coopetition relationships within the ecosystem, more needs to be done to facilitate and ensure that companies’ martech investments are being optimized in the best way possible.
Marketing technologies’ integration challenges have been documented extensively for years now. Newer technologies like customer data platforms aim to address parts of these challenges. The larger martech vendors have also made strides with out-of-the-box integration capabilities to address multi-product stack integration limitations, such as syncing data bidirectionally, incorporating custom algorithms, and richer governance. But to date, the concept of vendors willingly integrating with competing tools in a client’s martech stack doesn’t necessarily translate to real life that well – and clients (and their employees and end customers) are the ones paying the price.
The “new normal” brought on by the COVID-19 pandemic will continue to affect companies across all industries, worldwide. Everything is being redefined and redefined again. Such an unprecedented paradigm shift requires that martech vendors step it up, become more open and accessible, and work with competitors for the benefit of their customers and the ecosystem. After all, part of what martech vendors are selling these days are ways to more empathetically engage … which is great, but that empathy should apply to all the players in the ecosystem and, ultimately, to the client trying to make all this technology work together. It’s time to walk that walk more proactively.
Look for new ways of collaborating to drive better results from your martech stack.
Although the reality is that there is “no magic bullet for integration,” more can certainly be done. To get there, it’s going to take new ways of collaboration that promote the expansion of martech stack optimization best practices and blueprints, better application interfaces (APIs), pre-packaged connectors, integration centers of excellence, professional services teams and partners armed with repeatable integration patterns - helping customers adapt to change without having to rip and replace technology constantly. Doing this, vendors will foster a more transparent and efficient coexistence of technologies in the martech ecosystem. These are just a few examples of the themes that should be at the forefront of future efforts to enhance the customer experience for all.
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