The CMO's Guide to Marketing for Tech Companies

In today's business environment, marketing  for tech companies requires agility and adaptability. With an average marketing budget of  9.1% of revenue in 2023, CMOs face the challenge of doing more with less, particularly amidst inflationary pressures and uncertain economic conditions. Despite these constraints, 51% of CMOs increased spending on marketing data and analytics in 2023, highlighting the growing importance of data-driven decision-making.  

This guide explores key themes crucial for tech CMO’s to succeed provides valuable insights and practical guidance for effective marketing strategies to drive your tech business forward.

Construct Durable Strategies when Marketing for Tech Companies Aligned with Organizational Objectives  

CMOs face the task of not simply accomplishing more with limited resources but rather discerning the most essential tasks in light of unpredictable external factors and the demand for ambitious organizational goals. CMOs need to prioritize developing resilient strategies that enable them to clearly define and communicate the value of marketing to the overall objectives of the organization.   

To help you craft a winning marketing strategy, we've tapped into the expertise of Jay Clark, a Channel Marketing Director. Jay shares a #1 hack for marketing in the channel ecosystem that can help you elevate your marketing efforts and achieve outstanding results in the channel ecosystem.

In order to effectively shape their marketing strategies in the present and future, marketing leaders must incorporate four key themes.  

1. Customer journey orchestration

2. The Evolving Role of Marketing in Modern Businesses

3. Strategic brand management

4. Mastering Adaptability and Embracing Uncertainty in Digital Marketing.

To effectively develop a concise and captivating strategy, it's essential to strike right balance between providing an overarching vision that grabs stakeholders' attention and offering specific guidance to the marketing team. Chief Marketing Officers (CMOs) need to communicate their marketing strategy by presenting key points without bombarding business stakeholders with excessive details.

A widely used structure for marketing strategies involves incorporating business objectives, marketing objectives, marketing initiatives, and corresponding marketing metrics. However, this approach often contains deficiencies within each aspect, leading to resources being squandered and a misalignment with the overall business objectives. While it may present as a neat and organized framework, it fails to address underlying issues of strategy for tech companies. An effective marketing strategy recognizes and tackles potential gaps by:  

• Probing for the drivers behind organization goals and identifying issues both internally and externally of marketing that must be solved for goals to be attained.
• Choosing the Ideal Marketing Approach to Drive Business Goals
• Choosing relevant performance metrics that effectively demonstrate the influence of marketing campaigns and align with the underlying business objectives they aim to reinforce.

Marketing Spend for Technology Companies

Enhance, Safeguard, and Allocate for Increased Productivity and Profitability

CMOs at B2B Tech companies need to be proactive in anticipating and responding to the potential economic challenges ahead. Even the most optimistic CMOs should be prepared to make difficult financial decisions, particularly in an unpredictable and uncertain business landscape. In order to effectively navigate budgetary constraints, CMOs should develop marketing expenditure strategies that streamline costs, enhance their capacity to meet evolving business objectives, and generate optimal business value.

Cost optimization refers to an ongoing, business-oriented endeavor aimed at effectively managing and optimizing expenses while maximizing the value generated. The primary goal is to enhance efficiency and productivity by reallocating funds from less productive initiatives to ones that offer higher returns.

In marketing for tech companies, it is crucial to evaluate your expenditure across various important domains like agencies, media, martech, operations, digital commerce, campaigns, marketing analytics, and projects. By doing so, you can analyze how each area contributes to or impedes the customer journey and impacts business revenue. In the B2B Tech scenario,it is essential to distinguish between programs that actively generate marketing value and those that simply aid in supporting it.

Regardless of whether your CFO has addressed cost reduction or not, it is imperative to take immediate action. The marketing expenditure playbook that you need to adopt should align with the unique obstacles that await you. In order to navigate through economic challenges, the following crucial steps must be included in your playbook:

Step 1:  

Start by comparing your budgets to determine how your current budget and expenditure compare with those of your industry peers and competitors.

Step 2:  

Enhance your knowledge about the evolving behaviors of your customers and consumers. Develop your Voice of the Customer (VoC) abilities to monitor the effects of economic uncertainty on your customer base.

Step 3:  

Strengthen your ability to plan for different scenarios in order to develop flexible and adaptable marketing strategies.

Step 4:  

Present a compelling argument in favor of marketing expenditures. Allocate resources towards marketing strategies as they play a crucial role in achieving immediate outcomes and maintaining brand awareness amidst extended buying cycles and financial constraints. Moreover, investing in marketing optimizes the probability of overcoming economic challenges and thriving in the future. Instead of resigning to the inevitability of budget cuts, advocate with confidence and conviction for robust and continuous investment.  

Step 5:  

Reduce unnecessary expenses in marketing. Develop a comprehensive cost management strategy for your digital marketing efforts that weighs the potential financial advantages against the associated risks.

Step 6:  

Reevaluate your investments in media, agencies, and technology. Determine the areas where you are investing in marketing's operational framework that allow you to achieve cost-effectiveness in the present and fuel growth in the future.

Unlock the Power of Marketing Cost Optimization: Download the Framework Here

Strategic KPIs to Measure in Technology Marketing

Establishing Key Performance Indicators Connecting Strategy with Implementation

In the past, marketing has often been viewed as an expense rather than a means to generate revenue, especially in technology product marketing. As a result, Chief Marketing Officers (CMOs) have had to validate their expenditures and manage expenses. This challenge has become even more pronounced, particularly as CMOs aim to recover and stabilize their budgets in terms of marketing in the wake of the pandemic.  

In order to establish marketing as a generator of value, it is crucial to base strategies on data and employ consistent measurement frameworks. This approach prevents the selective extraction of results, facilitates the alignment of marketing strategies for technology companies with the overall business objectives, and effectively communicates the value to stakeholders.

Determining the value generated by marketing can be challenging, especially when attempting to establish a direct correlation between a marketing activity (like a digital campaign) and a business result (such as a sale). To demonstrate value, it is crucial to provide marketing metrics that align with the specific roles and decisions being supported. This includes delivering relevant metrics to key stakeholders such as CEOs who are interested in business outcomes, as well as campaign managers and analysts who utilize detailed metrics to optimize marketing strategies. By establishing a well-defined hierarchy of marketing metrics it ensures that the appropriate individuals receive the appropriate measurements at the appropriate times and that these metrics are utilized for their intended purpose.  

If it is challenging to measure the return on investment (ROI), chief marketing officers (CMOs) should present marketing activities based on the value they will bring to business goals. One crucial measure of success for a demand generation initiative, for instance, includes obtaining more leads, securing high-quality leads, and accelerating the sales process. By assessing these metrics together, we can gauge the value achieved in terms of meeting objectives . ROO  (Return on Objective )serves as an alternative approach to measuring value in situations where marketers cannot demonstrate ROI directly or indirectly.  

Measuring Value: The ROO (Return on Objective ) Advantage

While ROI remains ideal, directly linking specific marketing activities (e.g., digital campaigns) to sales conversions can be challenging. To showcase value, focus on Return on Objective (ROO), particularly with metrics aligned to specific functions:

• For CEOs: Business outcome metrics like lead generation, lead quality, and sales process acceleration
• For campaign managers and analysts: Detailed metrics for ongoing optimization

ROO in Action:

Consider a demand generation initiative. By measuring metrics like increased leads, higher lead quality, and faster sales cycles, we can assess the value achieved in meeting objectives (ROO). This provides an alternative when direct or indirect ROI measurement is difficult.  

By employing appropriate Key Performance Indicators (KPIs) and assigning them to the relevant individuals, it becomes possible to enhance the certainty in decision-making processes, facilitate the assessment of various endeavors, determine the appropriate time and manner for adjusting course, and effectively tackle unexpected shifts and obstacles.

Capabilities

Developing Skills to Foster Dynamic Implementation

CMOs have a natural inclination to evaluate their teams' ability to adapt to changes. However, they often resort to drastic measures like complete reorganization or hiring individuals for specific roles in an attempt to address short-term challenges. Instead of fixating on job descriptions or reporting lines, CMOs should prioritize acquiring a diverse range of expertise and skill that will enable them to successfully implement their long-term strategies.  

To ensure the effective implementation of your strategic plan, it is essential to accurately evaluate your organization's abilities and the resources needed. This process plays an essentiall role in developing adaptable marketing capabilities that align with your strategic goals. To achieve this, you can follow these four important steps:

1. Identify capability gaps.

2. Source capabilities.

3. Organizing Skills to Fit the Framework

4. Assessing Influence and Emerging Requirements

Identify capability gaps

Create a customized capability assessment to evaluate the necessary skills and expertise your team will require in order to effectively implement your strategic plan. Engage your leadership team in brainstorming and define broader functional clusters of interconnected job roles, as well as the specific skills or knowledge required to achieve the desired outcomes. Additionally, develop contingency plans for anticipated changes and determine how to efficiently allocate resources or align existing capabilities to meet the identified needs.

Source Capabilities

Decide on the method you will use to obtain the necessary resources or abilities that are currently lacking. This can be achieved through options such as training existing staff to enhance their skills, recruiting new employees or merging/acquiring another company to gain the required capability, or collaborating with external entities like agencies, freelancers, services, or vendors to access the needed expertise.  

Harmonizing Skills with Organizational Framework

To integrate the desired abilities of internal staff into your current organizational structure, you must determine the most appropriate approach. Implementing additional capabilities or reallocating talent does not necessitate a complete overhaul. Rather, consider methods to seamlessly integrate these changes while minimizing their impact on the existing organization. By doing so, you can minimize disruptions and the potential for change fatigue.  

Assessing the Influence and Evolving Requirements

Regardless of how precisely you create your organizational structure, it will have to adjust as your strategy evolves. Instead of perceiving organizational design as a one-time endeavor, it is crucial to perceive it as an ongoing undertaking to guarantee that your team's abilities constantly adapt to fulfill your strategy's demands.

Channels

Enhance the Overall Channel Strategy through a Comprehensive Approach

Digital marketing leaders understand the significance of both online and offline marketing channels in promoting a technology company's product or service and connecting with potential customers. However, they often face challenges in implementing effective cross-channel strategies due to organizational silos. It is crucial for them to create a seamless and unified experience across all marketing channels.

Across various sectors, customers have indicated that they utilize an average of four distinct communication channels when engaging with a brand. These channels may include a brand's website, email, SMS, and social media platforms. Throughout their customer journey, brands that aim to create a successful channel portfolio begin by collecting valuable information to identify specific target customer segments and determine their primary areas of focus. These collected insights encompass various factors:

• Achieving Marketing Objectives: Enhancing Cross-Channel Support
• Identifying the Customer Profiles That Define the Brand's Target Audience
• Exploring Customer Perceptions and Economic Prospects or Risks through Brand Studies in a Technology Company.
• The Current Experience Mapping of Our Valued Customers
• To effectively achieve the brand's objectives, it is essential to identify the ideal customer actions throughout their journey. This entails understanding the specific actions that customers should take at each stage in order to align with the brand's goals.

In order to develop a comprehensive strategy that spans various channels rather than focusing on individual channels, a brand must possess a deep knowledge of the target audience, business objectives, and the resources at its disposal. This will enable the brand to effectively align its overall strategy with its target audience and achieve its goals. When formulating a channel strategy, it is essential to optimize each channel accordingly.  

1. Considering the preferences and usage patterns of target customers is crucial for brands aiming to prioritize customer satisfaction and avoid investing in experiences that do not meet customer expectations. By understanding the channels preferred by their customers and how they use them, brands can ensure a better alignment between their offerings and customer needs. This customer-centric approach helps businesses create experiences that relate with their target audience and lead to higher customer satisfaction levels.

2. To achieve an optimal channel mix, it is crucial to consider existing channel strategies and carefully evaluate a brand's past experiences to ensure they effectively drive desired customer actions. Marketers who succeed adopt a proactive approach by continuously refining their strategies for tech companies rather than adopting a passive "set it and forget it" mentality.

3. In order to maximize returns, it is essential for every organization to prioritize its resources based on a comprehensive understanding of needs of customers and the performance of the existing channel strategy. This will enable investments to be directed towards the channels that have the highest potential to drive results.

Marketing Mix

Boost Results, Maximize ROI, and Measure the Influence of Marketing  

CMOs face immense pressure to demonstrate the effectiveness of their marketing efforts. However, the lack of comprehensive data across a constantly expanding range of marketing activities, channels, devices, and touchpoints can undermine confidence in their performance measurements.

Marketing mix modeling (MMM) is a methodology employed to assess the collective influence of various components of a marketing mix on overall performance. Through MMM, Chief Marketing Officers of technology companies can unlock deep customer understanding using digital marketing data analysis, precisely measure campaign performance, and optimize resource allocation for maximum impact.

This data-driven approach empowers them to optimize tactics and ultimately achieve their marketing goals and enables CMOs to make informed decisions about their marketing strategies and enhance overall performance.

Marketers continue to face difficulties when it comes to addressing fundamental inquiries regarding the influence of marketing on their business. The main objective of Marketing Mix Modeling (MMM) is to ascertain the additional effects of marketing endeavors and leverage those insights to address significant marketing queries. Although the specific methodologies may vary, most forms of MMM utilize collective data rather than individual-level data. Consequently, MMM can encompass a diverse array of channels and external factors.

• Harnessing the Power of Online Platforms: Exploring Digital Media platforms such as Social Media and Banner Ads
• Mainstream Media (e.g., TV Broadcasting, Outdoor Advertising, and Radio)
• Factors within a company that have the potential to influence conversions include aspects such as inventory levels, staffing, and geographic presence.
• Various factors in the market, such as the price, the amount spent on media advertising by competitors, and the share of voice, influence the market dynamics.
• Influence of Outer Elements (such as Climate, Seasonal Patterns, Economic Climate, or Consumer Trust)

MMM, or Marketing Mix Modeling, has a rich past and is constantly evolving. If you previously regarded it as merely providing insights at the channel level or delivering results on a quarterly basis, it might be worth revisiting your perception. The field of MMM has experienced significant advancements, such as enhanced speed of analysis, deeper insights, and more actionable recommendations.

Successful chief marketing officers (CMOs) utilize marketing mix modeling (MMM) as a strategy to overcome the difficulties and uncertainties arising from the increasing complexity of the marketing landscape.

To optimize the efficiency of your marketing mix model, implement these three strategies:

1. In order to optimize the effectiveness of your marketing mix model, it is essential to prioritize insights and rank the outputs that will deliver the highest value. Additionally, you should actively engage in scenario planning and model validation to enhance the overall effectiveness of your programs.

2. Enhance credibility by validating your marketing mix model. AMarketing leaders who have greater trust in their marketing mix modeling (MMM) tend to view the insights provided by marketing analytics as crucial for their organization's success. However, it's important to note that MMM findings may sometimes contradict conventional beliefs. Therefore, it is advisable to treat your marketing mix model as a trustworthy recommendation rather than an absolute requirement.

3. Engage in the process of strategic planning and optimization to develop robust and more effective marketing strategies that can withstand unforeseen circumstances and yield better results in the long run.

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If this blog has left you reimagining your marketing strategy - let’s schedule a call and discuss how we can work together to create a successful marketing strategy for your tech company.