Evaluating The ROI of MarTech Investments

Published on 11 Oct 2023


Marketing technology is now an important part of companies that desire to remain competitive and grow in today's fast-paced and always-changing business world. Marketing technology (Martech) has emerged as one of the most rapidly expanding markets, with a global valuation estimated at $121 billion in the year 2019. Investing in the right marketing technology can help organize processes, make them more efficient, and get customers more involved. 

But these investments come with risks, and businesses need to determine the return on investment (ROI) of the tech tools they use for marketing. We'll talk about why it's important to look at the return on investment (ROI) of martech investments, the most important numbers and things to think about, and the best ways to make decisions based on data in this blog.

See Also: Guide to Building A Remote Global Team 

Key Metrics For Evaluating ROI

Several key metrics and considerations come into play to assess the ROI of marketing technology investments. Below are a few of the most significant ones:

Revenue and Sales Growth

For figuring out ROI, it's important to see how martech affects sales and revenue growth. It includes keeping track of the rise in sales and income that can be linked to technology-powered marketing. This includes seeing how many new customers you get, how well your upselling and cross-selling efforts work, and how attribution modeling helps you determine which marketing platforms bring in the most sales. 

Marketing technology also makes grouping and personalization easier, often leading to higher conversion rates and average transaction values, boosting sales. It also helps reduce the time it takes to turn leads into paid customers, which means the time it takes to make money is faster.

Cost Reduction

As important as it is for martech to increase sales, it is also important to reduce costs. This means looking at how technology has made marketing easier, reduced manual work and eliminated the need for extra staff. Think about how it has improved the use of resources and freed up team members to work on more important tasks instead of entering data by hand. 

Additionally, the technology helps save money by cutting down on marketing costs like print ads and fees for third-party agencies. One more thing to think about is the time saved. Running campaigns faster not only makes them more efficient but also cuts costs.

Customer Acquisition Cost (CAC)

A key part of measuring ROI is determining the Customer Acquisition Cost (CAC). It involves breaking down costs related to getting new customers, such as advertising costs, staff pay, technology licensing fees, and other important costs. A key measure is also the number of new customers gained in a certain amount of time. The CAC can be found by splitting the total cost of getting a new customer by the number of new customers. 

Looking at the CAC before and after a technology is implemented is important. If the CAC fails or the acquisition process works better, the technology has helped with cost-effective customer acquisition. Also, figuring out the CAC for different groups of customers gives you information about how well the technology addresses specific groups.

Customer Lifetime Value (CLV)

Evaluating the Customer Lifetime Value (CLV) offers insight into the long-term impact of martech investments. This involves calculating the average CLV for your customer base, which is the revenue generated by a typical customer over their entire relationship with your business. The technology-driven growth of CLV can be assessed by tracking the CLV for customers acquired after technology adoption and comparing it to pre-technology customers. 

Improved customer retention rates often lead to higher CLV, indicating the technology's impact. Furthermore, the role of technology in promoting upselling and cross-selling can contribute to an increased CLV, making it an essential metric for evaluating ROI. Segment-specific CLV calculations can provide a deeper understanding of how technology affects the long-term value of various customer groups.

Conversion Rates

The effect of martech on conversion rates is a strong sign of how well it works. For this review, we will look at how technology has changed the number of conversions on your website, email ads, and social media sites. A/B testing can be used to see what changes made to marketing tactics because of new technology have a direct effect. 

Targeting and personalization have a big effect on conversion rates because users respond better to material that is tailored to them. With the help of technology and automation, texts can be sent at the best times, which leads to a higher return rate. It's also important to look at conversion rates at different points of the sales process to fully grasp how technology helps move leads from being aware of the product or service to seriously considering buying it.

Best Practices For Evaluating ROI

Now that we understand the key metrics, here are some best practices for effectively evaluating the ROI of martech investments:

1. Set Clear Objectives

Before implementing any marketing tool, it's important to make sure you have clear goals. What do you want to achieve with the technology, and how will you know if you've done it? This is the first step in figuring out how to calculate ROI correctly. Clear and well-defined goals give you direction and ensure your work aligns with your business goals. 

Clear goals like getting more people to visit your website, raising sales, or making customers more interested make it easy to see how marketing & technology affect these measures. Also, clear goals make it easier to determine the return on investment (ROI) because they let you see how much your technology investment helps you reach those goals.

2. Use Analytics Tools

Using data and feedback tools is important in figuring out how well marketing & technology works. A lot of modern martech platforms have data and reporting tools built in that let you see how your campaigns are doing and how your customers are acting in real time. When you use these tools, you can monitor and measure key success factors like website traffic, sales rates, and your customers' engagement. 

Dashboards and reports with these tools make evaluating easier by visually showing your data. In turn, this lets people make quick, well-informed decisions. You can use analytics tools to find out what's working, what needs to be fixed, and where the best returns on your technology investment are.

3. A/B Testing

A/B testing is a good way to determine how martech affects your return on investment (ROI). It includes figuring out which campaigns or plans work best by making two versions (A and B) and comparing how well they do with and without the technology. This way, you can separate the technology's effect on important measures. 

For example, if you're adding a new email marketing tool, you can use A/B tests to see any changes in the read rates, click-through rates, and conversion rates of emails sent with and without the new tool. A/B testing gives you numerical information about the extra benefits that the technology brings, which lets you link specific results to its use. This way also lets you change your marketing plans based on facts and the results.

4. Benchmarking

When you benchmark, you compare your ROI to your business's norms and those of your rivals. It gives important background information for judging your work. By comparing your ROI to industry standards and other marketing technology companies in the same field, you can better understand how well you're doing. If you bought new martech and saw a 10% rise in conversion rates, you can use comparison to determine if this is above, at, or below the average for your business. 

These details help you determine how successful your tech efforts are and whether they put you ahead or behind the competition. Comparing yourself to others can help you set realistic goals and see where you might need to make changes or put more money into.

5. Continual Monitoring

ROI analysis is not a one-time thing; it's something you do all the time. It's important to keep an eye on your martech purchases so you can see how they change over time and adapt to changes in your business. Your ROI measures may change as your business grows and the technology integrates better. For example, what worked initially when implementing marketing & technology might need to be changed as your business grows. 

You can adapt to these changes and ensure your ROI review is still useful by always keeping an eye on it. It also lets you find patterns and trends in the data, which lets you make smart decisions and take advantage of new chances or deal with new problems as they come up.


A key part of ensuring your company makes the most of its resources and efforts is specifying the return on investment (ROI) of martech purchases. It gives you the information you need to improve your marketing tactics, use your resources best, and optimize your marketing & technology stack. Keep in mind that figuring out ROI is a constant process. As technology and business need to change, so should the factors you use to judge ROI. You can stay ahead in the tough marketing world if you use data to guide your choices, set clear goals, and work together as a team.

Featured image: Image by pikisuperstar


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