Most of us agree that marketing is an essential part of a business, and it’s a necessity to justify that no matter what a company spends on marketing, an impact is made, be that revenue growth, retaining customers, or improving customer lifetime value. Yet marketing remains one area where proving the value that marketing initiatives bring to a company remains a mystery to many.
Now consider the marketing tech stack that companies are forced to build to keep pace with competitors. If you had to right now, could you show which pieces of tech contributed to company-wide goals?
If you said no, you are neither stupid nor alone. Time to value (TTV) is a blurry concept at the best of times, but it’s becoming more critical for marketers to get a handle on the way new technology is evaluated, implemented, and most importantly valuable.
The Marketing Pressure Cooker of Proving Value
It’s no secret that marketing departments have always had trouble proving ROI and their overall value to the business. Hard to do under the best of circumstances, it’s even harder when you’re buried in multiple campaigns and struggling to get emails out to customers. Many of us don’t have the time to put together a solid analytical report to get a good look at what we’re spending and how our campaigns are performing.
It’s even harder when the calculation is a manual process of digging data out of each tech solution, most of which do not make it easy to export and integrate.
So marketers lean on tech to give us better leads, revenue increases, and, of course, wins. But not every CMO has a broad understanding of the available technology, and it’s easy to get overwhelmed by all the features a point solution has while largely ignoring the immediate value tech can bring to marketers.
There’s a lot of understandable fear in assessing new martech. CMOs ask themselves over and over, “Will this thing take forever to implement and cost us opportunities we can never get back? Will we have to throw more money at it to get the capabilities we want? Will it be easy to learn and use? If I screw this up, it not only puts my job in question but all the people who report to me, from my marketing director down to every single marketer on the team?”
Sometimes this leads to blind acquisition which complicates the already teetering tech stack. But one thing is painfully clear: successful brands leverage tech to better know their customers and to be more agile in real time. Brands who mostly react lose.
And here’s where we need to think a little differently about digital marketing: Time to value not only drives business decisions, but it is more often the difference between your brand and all your competitors.
Why TTV Is Hard to Calculate
Marketing departments have to be able to accurately report what the return on any marketing investment is, but there are two barriers that can get in the way.
- #1: You have to decide how you’re going to measure value over time, specifically which metrics you’re going to focus on. What kinds of returns are you going to measure value through? Are you simply comparing dollar amounts and revenue growth over previous year? Or do you want a more complete picture of measuring more intangible kinds of value like go-to-market speed and increased efficiency?
- #2: Marketers manage an unwieldy patchwork of software and platforms that make it nearly impossible to pinpoint the value each component of the stack brings to an organization. How are you going to get all of your data out of every touchpoint in a timely fashion? And if you do somehow manage to accomplish that, how are you going to definitively show the value of each component?
This is where we need to change the way we look at a necessary cost like martech and how we’re going to value it as a profit center. First, we have to decide how we measure value.
ROI, ROMI, or TTV: What’s the Best Way to Measure the Value of Martech?
You want to know if all the money and time you spent on acquiring a new piece of marketing software adds up to a lift in engagement or an increase in revenue? But how do you do that exactly? Should you calculate ROI? Or ROMI? And what do either of those metrics tell you about time to value?
ROI and ROMI
Return on Investment (ROI) is the overarching measurement of any investment, but it focuses on the investment’s contribution to total revenue. ROI does not take into account all the hours your team has spent planning and launching campaigns, nor does it track where the ad budget went and how well it performed. ROI doesn’t even measure customer experience or increased engagement.
Return on Marketing Investment (ROMI) is a better metric since it goes deeper than net profit and focuses specifically on what marketing’s been investing in. It can also provide competitive data when looking at each investment case by case. The formula is the same for ROI and ROMI:[Net profit / Total investment] X 100
Let’s say you’ve run a $15,000 campaign for a month. In that same period, you had sales growth of $25,000. What’s the ROMI?[(25,000 – 15,000) / 15,000] X 100
[10,000 / 15,000] X 100
0.66 X 100 = 66% ROMI
Though this quickly shows whether you have a positive or negative return, ROMI does not account for everything involved in implementing a new piece of tech — not just how much work your marketers put in to integrating the tech but also how much downtime you might have from the start of implementation until you see the first results from those new initiatives. Depending on your industry, calculating ROMI may be much more complicated — especially if you have to figure in discounts, returns, shipping fees, and other peripheral costs. ROMI and ROI just don’t focus on the intangible impact of time and improved efficiency.
Time to value is similar to ROI and ROMI, except where the latter two measure the financial success of an investment, time to value measures the effectiveness of an investment. Marketing software does more than bring in revenue. If you’re faster at integrating technology than your competitors, you stand to gain an ongoing competitive edge, whether that’s driving up retention rates or doubling customer engagement. Therefore, the shorter the time to value, the faster you’ll see revenue growth (as shown below).
Poor time to value. (Source: Nello Franco)
Optimal time to value. (Source: Nello Franco)
6 TTV Elements to Look For in Marketing Technology
When you’re looking for new tech with the shortest time to value in mind, here are the six most impactful elements to seek out:
- Find tech with relevant features rather than a million features. TTV is always going to be quicker when you’re dealing with a small but powerful set of tools rather than a full-blown suite that you may never completely use.
- Seek out solutions that are focused on hitting your objectives rather than boasting every possible tactic. With everything set up right from top to bottom, campaigns will deliver more quickly and be better aligned to revenue and retention objectives.
- Look for AI-driven automation that will take care of segmentation, best send times, faster analytics, and a host of other manual activities that your marketers should not be spending time on. All of this shortens TTV.
- Hunt for a platform with an insightful dashboard system — and not just in terms of real-time management, but something powered by built-in use cases and industry-specific knowledge so that you’re not loading data for the next three months before you can launch a campaign. Some platforms even allow you to benchmark against similar companies in your industry.
- Choose a provider who can give you a single platform with the tools you need most built-in. This makes your stack easier to manage and is usually cheaper due to vendor consolidation.
- Avoid technology with potentially lengthy onboarding procedures. You may never know what your TTV is if you have to spend the next three, six, or even 12 months learning how to use the tech.
By keeping these factors in mind, you can find the solutions you need and activate campaigns in one day rather than the typical 90 days it takes to build and launch data-driven campaigns.
All too often, marketing gets the blame when things go wrong. From the CMO down to the campaign manager, marketing is the department that the rest of the business views as a cost center instead of a profit center. When revenue’s down and times are tight, marketers are among the first to be let go. Uber recently eliminated 400 marketers, a third of their marketing department under a CMO who’s been there less than a year. In fact, CMOs are at an all-time low in length of employment: on average, CMO tenure is 43 months.
However, we are also in a great age of automation and an exploding global e-commerce market. We have more machines at our disposal to hit our objectives and let our teams get back to creating great strategies and content. Marketing’s contribution to revenue growth is becoming more and more trackable, and we are seeing some intangible ideas, like TTV, coming into play more often. As any marketer knows, there is no way to show evidence of every single thing you did to make a batch of campaigns perform at or above expectations. (Not unless you wore a bodycam to work… and let’s hope it doesn’t come to that.)
Time to value plays a large part in determining the experience customers have when they browse your site and purchase from you. Tech stacks evolve, so the next time you have to choose a new package or platform, think about solutions that prioritize speed to market. The shorter your time to value, the better your site and the CX will be, which means happier customers, and a valuable marketing department.