Has Martech Moved the Needle for SMBs?

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Has Martech Moved the Needle for
SMBs?
OMMA Marketing Tech
New York, NY
Rick Ducey
Managing Director
BIA/Kelsey
rducey@biakelsey.com
May 18, 2016
@rducey@biakelsey

2© 2015 BIA/Kelsey. All Rights Reserved. |
About BIA/Kelsey
Advisory research firm helping clients with strategies and local market intelligence

3© 2015 BIA/Kelsey. All Rights Reserved. | 3© 2015 BIA/Kelsey. All Rights Reserved. |
Martech Landscape
SMBsAre Big Part ofAd Economy
BeyondAdvertising
SMBs Disrupted and Disrupting
Topics for Today

Martech Starts With Knowing Who Your Customer Is
Lots of “tech stacks” to do martech, typically starts with a good CRM system

Martech is an Easy Space to Follow . . . Not!

SMBs are an Impactful Part of the Economy
Provide over half of all jobs and sales in the U.S.
 According to US Small Business Administration: “Small business is BIG!”
 The 28 million small businesses in America account for 54% of all U.S. sales.
 Small businesses provide 55% of all jobs and 66% of all net new jobs since the 1970s.
 The 600,000 plus franchised small businesses in the U.S. account for 40% of all retail sales and
provide jobs for some 8 million people.

$50.3 $52.4 $53.7 $56.4 $57.9 $60.9
$34.7 $33.0 $33.3 $32.0 $32.8
$34.6
$56.3
$61.2 $62.7
$67.9
$69.7
$73.4
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2015 2016 2017 2018 2019 2020
Billions
SMB Advertisers Non-SMB Local Advertisers National Advertisers
SMBs Increasing Ad Spend by $10.6B 2015-2020
BIA/Kelsey Defines SMBs as Under 100 Employees
Source: BIA/Kelsey, October 2015

Martech is Moving the Needle for SMBs
SMBs are shifting their marketing strategies to embrace digital
 Tech platforms and solutions that used to be “enterprise sized” are becoming increasingly right sized
for the SMB market.
 It’s about the DATA.
 Martech solutions are bringing customer data full bore into the marketing mix to evolve customer
relationships and engagement.
 But what has been the affect of these solutions on small-to-medium-sized businesses?
 How have SMBs combined martech solutions with paid search and other digital marketing platforms?

 In 2011 Gartner’s Laura McLellan predicted the rise of technology spending in marketing budgets
due to the rising strategic importance of marketing and tech.
 80% of companies now have a “chief marketing tech” by title or role.
 Companies are reducing their sales budgets in favor of marketing budgets.
 Gartner’s latest CEO survey shows that, “CMO budgets are increasing, distinctions between
digital marketing and marketing are vanishing, and digital commerce has become the mandate for
driving profitable growth.”
What is the Role Marketing in Companies These Days?
“By 2017 the CMO will Spend More on IT Than the CIO”*
*2011 Gsrtner survey.

 ActiveCampaign
 AutoPilot
 BoingNet
 Intellasphere
 InTouch
 JumpLead
 Leadsius
 Nurture
 SalesAutopilot
 SimplyCast
 Spokal
 Wishpond
Martech Platforms Targeting SMBs
Examples of Vendors Offering Free to Under $100/Month Platforms for SMBs

 Scott Brinker asks, “where is all this spend
going?” Gartner responded:
• Labor — 35%
• Marketing technology — 33%
• External marketing services (e.g.,
advertising, paid search, consulting) — 32%
 So by Brinker’s calculations based on Gartner
data, Marketing departments are spending 33%
of their budgets on martech and 32% of
advertising.
 Martech has been eating the CIO’s budget, now
it’s eating the advertising budget.
But It Gets More Interesting Than That
“Whoa: marketing technology budgets are now surpassing advertising”

http://www.fiercecmo.com/special-reports/gartners-laura-mclellan-digital-marketing-budgets-climb-sales-budgets-are-c
 Traditional marketing is about the “4 Ps” – Price,
Product, Promotion, Place.
 McLellan notes that for Gartner’s last eight surveys
they’ve asked CMOs about the 4 Ps and she
concludes, “the results are astonishing.”
 The ranking of “Customer Experience” declined in
importance in Gartner’s surveys from 1st to 5th. What
does this mean?
 Customer Experience is no longer something singularly
abstract, it’s being subsumed into specific marketing
strategies and implementations.
 Martech as strategy has the goal of helping companies
reengineer the customer experience.
What is Martech Trying to Accomplish?
Martech’s Job is to Reengineer the Customer Experience
Laura McLellan
VP of Marketing Strategies
Gartner

So, Where Are We Headed in All This? Beyond Advertising.

Martech is Leveling the Playing Field, Not Just for Big Companies
Martech Solutions Are Now “SMB- Sized”
 The strategic role of marketing is to create bonds between the brand and the customer.
 Technology platforms, data science and mediated customer touchpoints are core to the marketing
function
 Martech increasingly bonds strategy to execution.
 Martech solutions now available to not just to big companies, but affordable to SMBs.

Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 19, Q3/2015 (and prior waves, if relevant). Methodology: Online panels.
Less than One in Four SMBs Using a CRM System
10.4%
9.0%
3.9%
20.7%
55.9%
0% 10% 20% 30% 40% 50% 60%
More than 2 Years
1-2 Years
Less than a Year
No, considering within the next 12 months
No
Q510A Does your business use a CRM system?
Sample Size = 1010
CRM systems are the “gateway drug”

Maintenance of Customer Lists
14.5%
78.6%
6.9%
No
Yes A Year or More
Yes Less than a Year
Q112 Do you keep a list of customers?
Sample Size = 1010

OffersACustomer Loyalty Program
23.3%
21.6%
53.0%
2.0%
0% 10% 20% 30% 40% 50% 60%
Currently have
Don't have, but likely to get
Don't have, and not likely to get
Not sure
Q114 Do you offer a customer loyalty program?
Sample Size = 1010

Customer Loyalty Program Management
59.8%
32.0%
9.6%
3.1%
0% 10% 20% 30% 40% 50% 60% 70%
Operate Ourselves Paper Tracking
Operate Ourselves Digital Tracking
Credit Card Company linked to Customers Credit
Card
3rd Party other than Credit Card Company
Q114B Who manages your loyalty programs?
Sample Size = 236

Method of Tracking Lead Sources
3.8%
9.9%
20.6%
36.3%
75.5%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Other Tracking
Call Tracking
Promotions or Direct Mail
Clicks or Email
Ask Customers
Q204 How do you track leads?
Sample Size = 791

Importance of Websites with Customer Opinions
19.5%
28.7% 29.5% 31.8%
39.4%
33.8% 36.4% 36.0%
44.7%
38.6%
46.5% 48.8%10.0%
13.5% 15.0% 13.3%
15.5%
15.4%
15.1% 13.6%
13.9%
16.7%
16.6%
18.2%
20.7%
22.7%
24.1% 25.4%
17.5%
23.2% 21.0% 24.2%
17.6% 21.9%
17.2%
17.1%
26.6%
21.1%
18.1%
17.6% 15.4% 15.7% 17.6% 14.9% 12.9% 12.6%
12.1%
10.1%23.3%
14.0% 13.3% 11.8% 12.2% 11.9% 10.0% 11.3% 11.0% 10.2% 7.7% 5.8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Facebook Google LinkedIn Blog Yelp Twitter Yahoo Other Sites Angie's List Other Social Citysearch FourSquare
Not at all important Not too important Somewhat important Very important Extremely important
Q312 How important are reviews/comments on each of these sites to your business?
Sample Size = 1010

Monitor Customer CommentsAbout Business
58.7%
16.1%
23.3%
1.9%
Yes
No, likely next 12 months
No, and not likely to do in
next 12 months
Not sure
Q324 Do you monitor customer comments about your business?
Sample Size = 1010

Methods Used to Monitor Customer Comments
8.8%
11.1%
12.5%
67.6%
Paid Standalone Service
Not sure
Bundled Service
Free service/DIY
Q324AA How do you monitor customer comments?
Sample Size = 756

Other Martech/Advertising Services Considered
13.8%
13.7%
11.3%
12.2%
11.3%
11.5%
11.3%
9.7%
11.7%
10.8%
11.0%
11.5%
9.9%
59.2%
58.6%
60.0%
57.3%
57.3%
55.4%
55.0%
55.1%
52.2%
53.0%
51.8%
50.0%
44.5%
17.0%
19.3%
14.1%
13.6%
21.7%
20.4%
23.3%
17.7%
19.0%
20.1%
21.2%
23.1%
25.1%
10.0%
8.4%
14.5%
17.0%
9.7%
12.7%
10.3%
17.5%
17.0%
16.1%
16.0%
15.4%
20.5%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analytics, Performance Test
Lead Scoring
Online Scheduling
Password Management Program
Reputation Monitoring
Social Media Monitoring
Listings Management
Service that Keeps Customer Records
Analytics, Customer or Market Segment
Analytics
Online Leads Mgt.
Online Satisfaction Survey
Email Marketing
Not sure Don't use, not likely to in next 12 months Don't use, likely to in next 12 months Use
Q510 What ad related services do you use or are considering?
Sample Size = 1010
Most SMBs Not Using or Considering Martech Services at the Moment

Use of Cloud Based Services
6.9%
6.4%
5.7%
6.6%
6.4%
6.4%
72.6%
62.2%
59.3%
53.6%
50.6%
46.3%
9.3%
10.4%
12.7%
12.4%
13.7%
14.0%
11.2%
21.0%
22.3%
27.5%
29.3%
33.2%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
HR Service
Payroll Service
Ecommerce Services
Telecom Services
Business Software
Online/Cloud Storage
Not Sure No, not likely to add next 12 months No, likely to add next 12 months Yes
Q512 Does your business use any of these cloud based services?
Sample Size = 1010

13.1%
13.8%
18.6%
21.1%
21.8%
23.4%
25.7%
0% 5% 10% 15% 20% 25% 30%
Create Customer Specific Marketing
Customer Loyalty Program
Other
Inventory or Ordering System
Plan Operations or Marketing
Effectiveness of Advertising or Marketing
Not sure
Q605A Use of customer data from POS system
Sample Size = 1010
SMB Use Of Customer Data from Point of Sale
We do see some effective use of customer data by a minority of SMBs

1.6% 1.5% 1.7% 1.6% 5.1% 5.4%
9.4%6.2% 6.4% 8.4% 11.0%
21.4%
26.8%
32.2%
24.6% 26.9%
28.7%
29.1%
33.5%
25.6%
28.6%
59.3% 57.2%
52.9% 48.1%
29.2%
27.1%
19.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Reliable Easy To Use Most Cost Effective Integrates Easily
With Other Tech
Powerful Comparable To
What Competitors
Use
Newest
Strongly/Somewhat Disagree Neither agree nor disagree Somewhat agree Strongly agree
Q615 With new advertising and marketing technology what is the most important to you?
Sample Size = 1010
Top Opinions for New Technology For Advertising & Promotion
What it’ll take to disrupt the SMB space with martech – reliable, easy, cheap

Take- Aways
SMBs – a sector of the economy ready for disruption
1. Martech Landscape – complicated but moving towards affordable and interoperable platform stack
solutions
2. SMBs Are Big Part of Ad Economy – Whatever happens in the long-tail SMB space will have an
outsize. They may be small businesses, but there are a LOT of them.
3. Beyond Advertising – SMBs will have more data, analytics, insights and platforms to create
touchpoints to better understand and enhance the customer experience.
4. SMBs Disrupted and Disrupting - as SMBs adopt more martech, this will drive the needle in the
shift toward data-driven marketing, this will impact roles of advertising and marketing in the customer
journey.

Has Martech Moved the Needle for SMBs?

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