"B2B marketers will trim their tech stacks," writes Bonnie Crater in her recent MarketingProfs article Top 3 B2B Marketing Predictions for 2022.
I couldn't agree more.
She writes, "B2B marketers will look for opportunities to consolidate and simplify their tech stacks, paring down the number of solutions they use to more manageable levels." That has been a recurring theme among discussions with our clients, especially during the pandemic, which has not only pressured companies' bottom lines but also their ability to react quickly and coherently to changing customer behaviors and needs.
Clients upon clients have been wondering aloud how their sprawling martech stack got to its current state, which can best be described as a Frankenstein's monster.
When There Was Only One Choice
It's easy to understand how so many companies have ended up in such a position. I remember brands in the 2000s had discussions about best-of-breed versus single provider. But that discussion was kind of a joke because the single provider options were expensive, limited in functionality, and poorly integrated (mostly because single providers were just a loose collection of standalone solutions they'd acquired).
Over the next decade, the best-of-breed approach ruled without question. And during that time, the number of solutions grew rapidly. As Crater reminds us, the number of available martech solutions has grown from around 150 in 2008 to more than 8,000 today, according to The Chief Marketing Technologist blog.
But there aren't only more solutions—there are more kinds of solutions needed. So, the martech stack is not only more diverse but also much, much bigger.
The Mounting Cost of a Best-of-Breed Approach
The diversity and size combination has resulted in a growing number of unique solution providers. And if you look past the short-term costs that appear on purchase orders, the long-term costs of the best-of-breed approach have ballooned and become more apparent, even if they're inconsistently measured.
The biggest long-term costs of best-of-breed:
- Relationship management. Every vendor your company uses is another one you have to manage, stay up on, and negotiate a renewal with. Those costs are felt, but rarely calculated.
- Platform knowledge management. The more systems you have, the more difficult it is to hire and train your team to use those systems—and the more catastrophic it becomes when a member of your team leaves. The Great Resignation has intensified that pain.
- Integration costs and management. Integration costs are typically captured well upfront, especially when they balloon or spiral out of control because of implementation partners' rosy assessments. However, IT departments also have to continually manage APIs and deal with the cascade of potential consequences when one of your platforms changes something.
- Integration limitations. When cross-channel and cross-department integrations fall short of being seamless and real-time, it translates into disjointed customer experiences and missed opportunities. The opportunity costs of such CX failures are growing as the most successful companies deliver great omnichannel experiences and raise consumers' expectations for how things should be.
Although smaller companies with smaller martech stacks feel those cost pains less, large companies and enterprises feel them acutely.
A Third Option: Best-of-Suite
The best-of-breed vs. single provider argument was always a false choice, but now it's a false choice because there's a third approach to building a martech stack: best-of-suite. Essentially, it's a balanced approach, where the core of your stack comes from one provider that offers a truly integrated suite of solutions—of which there are several viable choices—and that core is supplemented by critical best-of-breed solutions.
The word "critical" is the key to being faithful to a best-of-suite approach. If your suite provider has a desired functionality, you have to make a super-compelling argument to go with an outside vendor because you'll compromise the benefits of that approach and risk lurching back toward a best-of-breed Frankenstein's monster.
Even as the Great Resignation highlights the risks around platform knowledge management, integration and opportunity costs are driving the shift to best-of-suite. A full 59% of CMOs are looking to buy a more integrated martech platform, according to 2020 research from Gartner—a spike of 30% over 2019.
But even with all the momentum behind best-of-suite, it can be hard for some to embrace such a marketplace shift.
For instance, I recently heard an RFP consultant argue that point solution providers were superior to suite providers because the latter spent a portion of their development money on integration whereas the former invested almost solely in solution features.
Although it's fair to say that a lot of innovations bubble up from smaller point solution providers, it's foolish to suggest that investments in integration are somehow wasteful. Money will be spent on integration either way; it's just a matter of who and when and at what level of risk. Suite providers take on those costs and drastically reduce the risks, whereas point solution providers push most of that cost and risk onto their customers.
I heard that same kind of shortsighted reasoning during the early 2010s, when conglomerates and multinationals were standardizing their tech stacks across functional and geographic divisions. Each division loved its one-off pet solution and argued that its needs were "unique and special"—in attempts to justify the bloat and higher licensing and management costs. Again and again, they lost those battles, and solutions were standardized; the result was that parent companies reaped huge savings and reduced management headaches.
Although that wave of standardization was mostly about internal efficiencies, today's wave of martech stack rationalization is mostly about external efficiencies—that is, the quality of the customer experience. Disjointed martech stacks lead to disjointed customer experiences, and fewer and fewer companies can afford that in today's competitive environment.
