But with more and more MarTech options available, and CEOs, boards and investors keen to avoid bleeding capex, it’s critical that businesses have an effective way to assess each option’s potential before making a purchase.
Beware of the ROI & TCO Trap
When it comes to selecting a new technology, two indicators usually come into play: Return on Investment (ROI) and Total Cost of Ownership (TCO). This is understandable because if you’re making an investment you want to know what kind of returns you can expect and what the total price of buying and implementing it will be. If these numbers make sense, then an investment is usually made.
However, accurately calculating these numbers can be difficult. This is because unforeseen expenses like project delays and failures (which often happen) are hard to predict and are therefore rarely factored in. Also, since most MarTech are SaaS offerings off the cloud (of which many are freemium services), implementation costs may at first glance seem negligible and are not adequately considered.
TCO & ROI have their merits and are unlikely to disappear anytime soon. But when it comes to MarTech, there is a better way to judge if something is actually helping you.
Time to Value Works
Instead of looking at what the total returns might be from a MarTech option, why not look at how quickly that option will start to get you returns? This is known as Time to value (TTV): the amount of time between when you make your investment and when you can expect to reach a specific milestone.
TTV will obviously vary depending on the MarTech you’re assessing and the milestone you’ve chosen but it’s an indicator that a legitimate vendor should be able to give you a decent forecast of. Also, when doing a post-purchase analysis of whether it’s your investment is worth keeping, it’s easier to measure provided TTV is tracked as a key metric.
Here are some examples of key TTV milestones worth considering:
- Basic/Immediate TTV – Timeframe: From Onboarding to 2 Weeks
Basic TTV is the amount of time it takes for you to see the smallest amount of value from your MarTech investment. It will give you a glimpse of what it can do in the long run.
- Exceeded TTV – Timeframe: 2-4 Weeks
In this period, if the value delivered exceeds your expectations, you should consider moving from a trial to a paid subscription.
- Short TTV – Timeframe: 1-3 Months
With the MarTech now fully functional, you should see outcomes improve each month and your teams embracing it as a requirement for success. They should see value in its efficiency and insights and adopt it as part of their workflow.
- Long TTV – Timeframe: 3-6 Months
This when results become consistent and repeatable. The MarTech now plays an integral role in your team delivering at a very high level. This when you should work more closely with your MarTech provider and take advantage of their experience with different teams and verticals for even better results. You should also commit to a long-term contract – so you can get a better deal!
Investing in the right MarTech can significantly improve your marketing efforts by making them more efficient and effective. It can do this by minimizing the need for resource-wasting manual analysis and by providing your team with insights that can drive stronger results. It can make your CEO and CFO very happy!
But make sure you select your MarTech carefully so get the returns you need within a time frame you want. Time to Value is the best indicator to help you with this.
Bonus Tip: Check out Alavi.ai – it’s MarTech with advanced AI capabilities
Designed for small and medium businesses, Alavi uses AI and machine learning to do precision targeting online. It performs predicative analytics on your customers’ behavioral data so you can quickly and easily target the right audiences to boost campaign performance. Alavi.ai has a very short Time to Value and is designed to help digital marketers of all levels deliver consistently deliver great results.
Checkout the success stories here