When Yield Group was just getting off the ground, I wrote some copy for the website that resonated with me more and more after I wrote it. Here it is:
Today’s world of digital marketing and attribution is a wild west of data, digital skills and software—and there’s not a good place to learn it.
Those words have become more potent to me in the last six months in large part due to the work we’ve done helping companies navigate that wild west. Running a services business in the data analytics and data-driven marketing space has exposed us to how truly rugged the landscape is, especially when it comes to marketing and analytics software tooling.
The Age Of Data Has Come
Most businesses today are aware of the demand for data in some form or another, but many of them—including very successful ones—are still trying to answer the question, why?
The simple answer is that data-driven customer experiences are becoming increasingly necessary in order to scale a business. Look no further than Amazon, who has pioneered the art of personalization and frictionless customer experience. The impact is astounding: in 2018, 83% of US consumers have purchased from Amazon, according to Big Commerce. Is automated personalization required to run a successful business? Of course not. But the bar has been set and consumer expectations are following accordingly. For organizations pursuing aggressive and sustainable growth, the path forward has been set.
Ecommerce is an easy example to use, but no business model is immune—B2B organizations we work with have increasingly felt the pressure to adapt in the face of competition that is innovating their customer experience better and faster.
So, the current gold rush—which we believe is here to stay for a long while—is the pursuit of a truly data-driven, highly automated, personalized customer experience through the entire funnel, for both B2B and B2C businesses.
The Idea Is Always Easier…
It’s not hard to get people excited about a data-driven utopia that increases revenue and makes operations more efficient, which is the picture that most marketing SaaS websites paint. It’s still a wild west, though, not a utopia, and finding one slick software tool isn’t enough, it’s only the tip of the iceberg. Most executives who stick their head under the surface are rightly overwhelmed by the challenge of charting a path forward.
From Excel to Salesforce Marketing Cloud to Airtable to Magento to PostgreSQL to Hubspot to Zapier to Sendgrid to Segment to Optimizely to Heap to Marketo and the dozens of other tools we’ve had our hands in, one thing is clear: it’s extremely difficult for even very successful companies to navigate the world of data and software and make it through without either a “mar-tech” stack that doesn’t align well with their business (or, worse, revenue model) or a messy and incomplete data pipeline that’s expensive and time consuming to clean up.
My anecdotal experiences aren’t isolated. I talk weekly with data and marketing professionals around the country, at both services companies and SaaS companies alike, and it seems that this problem plagues all but a few businesses. At the very least, most companies me and my peers interact with are in a constant state of trying to figure this out.
It Was The Best Of Times, It Was The Worst Of Times
Operating in a wild west can be overwhelming, but for the intrepid, it’s also extremely exciting. In many ways, there hasn’t been a better time to start and scale a business—there are more information and resources available than ever before. But that blessing is also a curse: where choices are abundant, it’s easier to make poor ones and that can have short and long-term consequences for a business.
With that in mind, our team sat down to discuss a few highlights of both the good and the bad of today’s world of data-driven marketing and analytics.
Accessibility Of Really Good, Lightweight Tools
For early-stage companies, there used to be a huge gap between Excel/Google Sheets and more bloated, all-in-one SaaS (read HubSpot, Salesforce and the like). Sure, you can “grow into” enterprise tools, but it’s still hard for many companies to justify the cost even when the startup discount runs out (and most times they still drastically underutilize features they’re paying for).
Smart, tech-curious people now have the ability to mimic expensive software by combining multiple, lightweight, feature-specific tools that are either inexpensive or free.
Examples abound, but one of my favorites from the past year is from an early-stage company that used Airtable as a CRM and tagged URL-builder for paid advertising, then connected it to Instapage and a chat tool for lead capture and an ESP like MailChimp or Autopilot for nurturing. The system helped them hit growth goals for the first year of operation. (Infrastructure savings meant more budget for actual acquisition—a significant advantage.)
Scalable? No. But now early stage companies can punch extremely far above their weight class at a fraction of what it used to cost (both the cost of software and/or headcount to implement).
Drastically Easier Implementation
Previously Advanced Features Are Now Standard
10 years ago, things like “product recommendation engines” certainly existed, but they weren’t very accessible to the masses. Now the feature is baked into free eCommerce platforms and ESPs. Entire companies are based on behavior-based messaging and smart bots and are servicing the small to medium segments of the market, capturing market share from bloated incumbents rapidly. It’s a good time to be in a growth role, because you can literally do more than ever with less than ever before.
Analysis Paralysis And Antiquated SaaS Sales Processes
Amazingly, and ironically, it’s actually pretty hard to go through the process of purchasing data and marketing SaaS. Why? There are literally thousands of tools to choose from, feature comparisons are hard and most software companies rely on an antiquated, 1:1 sales process that takes up an unbelievable amount of time. No-one I know has the time to sit through 100 sales pitches that all describe the same high-level feature set and keep pricing vague for as long as possible.
Because the process is so hard, many business leaders revert to “fighting the last war,” using tools that might not be the best for the job, but they are familiar with. It’s the devil they know, but that decision often ends up costing time and money further down the road when some sort of overhaul is required.
Flexible, Interchangeable, Data-Driven Systems That Scale Are Still Complicated
As awesome as it is to be a marketer today and as far as you can get with stitching together newer, lightweight tools, they all break when you really start to scale a business. That’s not a bad thing or even an indictment of the connected, feature-specific toolset paradigm, it’s just the reality that any growing business faces. Complexity increases and the data (and BI infrastructure) required to understand that complexity needs to be married together from multiple sources. More complex, integrated tooling for execution is needed to act on the insights that the data provides.
Enterprise systems like Salesforce Marketing Cloud, Adobe Marketing Cloud and others provide powerful enterprise solutions, but are bloated and pricing out-of-reach for many businesses—and they tend to lock you into their ecosystems.
Tools like Segment, Metarouter, Tray and others are making flexible systems much, much easier to build, but even with those tools, a significant amount of data architecture, data cleansing, security, segmentation and automation all has to be configured by someone who 1) knows what they are doing and 2) has a deep understanding of how all of those variables play into a specific business model.
In other words, it’s easier than it used to be, but building out a marketing tech stack has always been a formidable, expensive challenge and in many ways still is today.
One-Size Fits All Pricing
One of the less-obvious, but most challenging problems with the wild west is that most SaaS companies pursue one-size-fits-all pricing, with the primary lever being volume (of users, sends, etc.). Let’s take Segment and HubSpot as examples. Segment charges per monthly tracked user and HubSpot charges per contact, meaning they don’t make sense for high-volume, low-margin businesses, who would have to pay for all visitors or contact records even though they are only monetizing a small percentage of the total.
Again, that’s not an indictment on those companies—they are pursuing business models that are making them more successful in a free market, but that prevailing pricing paradigm does create a gravitational pull of SaaS companies towards enterprise customers, making it difficult for businesses with unique models to find a marketing stack that grows with them.
The old gap between Excel/Google Sheets and Salesforce Marketing Cloud is still there, the bridge is just shorter than it used to be.
People Who Know How To Do This Stuff Are Becoming More Rare
One of the biggest challenges is that hiring people who know how to do this stuff is becoming harder and harder. Almost every one of the companies we’ve worked with this year has talked about how hard it is to find someone who has the ability to think through a complex, data-driven system, from top-of-funnel all of the way through purchase. There are lots of “growth hackers” or people who had success optimizing within a pre-existing system, but deep experience in this area is becoming a rarer and rarer commodity. (Which is why we were driven to start our own Associate Program.)
Into The Great Wide Open
Wherever you are on the scales of frustration and excitement, your day job is probably getting more interesting, which is a good thing. That’s certainly true for us at the Yield Group, where our passion is helping companies drive forward into the great wide open with confidence.