Ever since I went to MarTech and attended Seth Godin’s keynote, I’ve been reading his posts much more frequently and the one I recently read was talking about price vs cost.
When you consider the price of something, you’re looking at the invoice amount, but that doesn’t begin to cover the cost. Yes, the price that you pay is the immediate amount of money out, but what about everything else? There are other hard costs that don’t immediately show themselves, like time; time to learn what you just bought, and time to use what you just bought.
I see many organizations buying marketing technology and not using it because they don’t have any budget leftover to support their technology investment. Let me put it to you this way – it’s like buying a car and not knowing how to drive. Is saying “Oh, I’ll just teach myself how to drive!” any different from “We’ll do the deployment ourselves”? What is the cost of that – I’ve seen it enough times to tell you the cost… 6 – 12 months of subscription fees for whatever you’re paying for the technology because even if you know what you’re doing, being able to prioritize and integrate something into your schedule is also a challenge.
Actual Cost vs. Perceived Cost
From what I’ve seen, the people investment is equal to 4x the technology investment. If you’re spending 20K per year on the tech, you should expect to spend around 80K per year on the service and support of that tech. For example, if you have a team of 3 marketers and you just got a new technology for them to use, part of their job will now be to support and maintain that technology. For argument’s sake, let’s assume their salary is 80K, and using and learning and maintaining this technology is half their job. This means 40K for their partial salary, and 40K for external consultants; otherwise, you’re not going to see traction, adoption, and proper use or deployment of that technology. Your team are not experts with that new technology, so how can they know what they don’t know?
I want you to really think about what I am saying. Let’s go back to the new car analogy. If you lease a car for $300 per month, what does your insurance and gas cost? How about maintenance or repairs? These costs have to be figured into your budgeting equation.
Total Cost of Ownership
Bottom line is that if you’re looking at price comparison charts to help you make your technology purchasing decision, please don’t. Look at total cost of ownership (TCO) instead. Switching your mindset and your way of evaluating will help you be successful in your technology implementation whether it’s Eloqua, Responsys, or anything else.
If you’re considering adding another technology from the Mar Tech stack, today and we’ll help you figure out whether that technology is right for you and help you determine what the expected TCO will be.
Latest posts by Mike Geller (see all)
- Challenges CMOs Face: Connecting Innovation and Culture - December 20, 2017
- Are you getting enough value out of your Marketing Technology? - November 2, 2017
- Price vs. Cost for Marketing Technology - October 25, 2017