How to Handle Martech Cutbacks Amid a Recession

With a recession looming, martech budgets may see steep slashes. Fortunately, it’s possible to save money while still hitting your marketing goals.

Though inflation moderated somewhat in the most recent US Bureau of Labor Statistics report, the Federal Reserve is expected to continue to increase interest rates with the intention of slowing the economy.

A slowing economy could mean a recession, something many economists are predicting later this year or early next year. JPMorgan CEO Jamie Dimon has gone further than most economic experts, calling for a 20–30% chance of a hard recession “or something worse” in a Yahoo Finance report.

Whether the economic downturn is relatively light or hard, one thing is clear: marketers will be asked to reduce their martech stacks as part of companies’ expense reduction efforts. Below are four ways for them to do that without cutting into the meat of their marketing efforts.

1. Use Analytics to Determine Reductions

“Organizations will be looking closely at what budget is discretionary — and organizations need to be prepared to answer the question: Is marketing discretionary?” said Christian Wettre, SugarCRM senior vice president and general manager, Sugar Platform. “This heightens the need for the value of proof when every dollar is scrutinized.”

In this scenario, analytics is a marketer’s best friend, allowing them to prove ROI on marketing expenditures, according to Wettre.

“An analytics engine is a must-have in an era of austerity,” he said. “Having robust reporting capabilities across sales, marketing and service — to understand and demonstrate mastery of the full customer experience — is essential to surface issues and opportunities faster as time-to-value becomes more important.”

Even larger enterprises may want to look at midmarket offerings that are less complex and require fewer arms and legs to activate functionalities.

With limited resources, organizations will need to foster better, tighter collaboration. Many organizations will seek out efficiencies and discounts by consolidating vendors/platforms for sales, marketing and service while leveraging the benefits of a common user interface and less training.

Related Article: Eliminating Vanity Metrics From the Analytics Portfolio

2. Cut Superficial Tools

“With current market dynamics squeezing budgets, B2B marketers are expected to do more with less while maintaining high-quality results,” said Natalie Cunningham, CMO of Terminus.

“In the past,” she added, “marketers have usually defaulted to their lead-focused funnel, which causes them to lose sight of the entire customer lifecycle and the strategies required to engage target accounts. It doesn’t make sense for companies to invest millions of dollars on marketing technology yet only earn conversion rates of about 1%.”

Marketers need to cut any tool that doesn’t connect with customers on a deeper level and integrate seamlessly across platforms, Cunningham said. They cannot afford to silo data to a single platform.

Marketers need an all-encompassing platform that connects accurate, targeted data across customer relationship management (CRM) platforms and other marketing automation or customer success tools. It should link and inform all engagement channels, like chatbots, digital, audio and CTV ads and email. It should also transform insights from these campaigns into easy-to-understand reports.

“Marketers should also be wary of buying or keeping software that only analyzes or aggregates data,” Cunningham cautioned. “Under increased budget scrutiny, marketers need tools biased toward targeted, in-market action. It’s difficult to justify purchasing technology that only explains what the data says but doesn’t enable marketers to act on it.”

3. Outsource to Gain a Variety of Skills

“Outsourcing your martech to a marketing agency can be a good decision compared to hiring an FTE (full-time equivalent) since you get to benefit from varied skills with added skill sets in CRM and sales, along with marketing automation,” said Brian David Crane, founder of Spread Great Ideas.

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