Anita Brearton, Author at MarTech Marketing Strategy, Marketing Technology, Marketing Transformation Mon, 27 Jun 2022 19:45:44 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 My stack is bigger than your stack, so what? https://martech.org/my-stack-is-bigger-than-your-stack-so-what/ Mon, 27 Jun 2022 14:29:06 +0000 https://martech.org/?p=353080 Martech stacks must be judged by effectiveness, not size.

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How big should a martech stack be? The answer is, as big as it needs to be, which I know isn’t a helpful answer. On our martech management platform, CabinetM, we have almost 1,000 stacks under management, ranging from 10 products to more than 250. Our own stack has 43 and we are a small company with a limited marketing budget.

 It’s virtually impossible to benchmark stacks from a size perspective due to a lack of consistency regarding:

  • The categories to be included  – Only marketing tech or marketing tech + sales tech + adtech (some consider ad tech entirely separate from martech) + service tech + data sources? Note: we see data sources showing up more and more in tech stacks.
  • The types of products included – Generally it’s purchased products, internally developed ones and those acquired and managed by agencies on the company’s behalf. But what about free products? Our data shows most companies don’t bother tracking them because it’s seen as too difficult or unimportant because it doesn’t impact the budget. This is a mistake. Some free products are critically important gems that are important to know about. 
  • How comprehensive it is – Some companies choose to look only at their critical foundational platforms. We, on the other hand, catalog every single piece of technology we use.
  • The scope – Some companies have one comprehensive source of truth (aka stack), while others manage technology at a department, business unit or geographical perspective and manage multiple stacks. We’ve even seen companies building stacks for specific marketing objectives e.g., lead acquisition, engagement etc.

Read next: Here’s how startups and small companies should build their marketing stacks

In building your stack, don’t focus on trying to find a guide to tell you how big your stack should be. Instead work from the ground up:

1. Establish your foundational technology infrastructure

For most companies this includes:

  • A way to create campaign materials.
  • A system to be your source-of-truth for data.
  • A way to manage prospect and customer relationships.
  • A means to acquire and nurture leads and engage customers.
  • One or more systems to support collaboration.
  • Tools to analyze and assess results.
  • Tools to manage assets, budgets and technology, and a platform to facilitate online sales if needed.

You may not need discrete tools for each function, depending on your environment your marketing automation platform may also function as your CRM and email platform.

2. Consider things beyond core functionality:

  • Suitability for the size and skills of your team. If you choose a product that is too complex than your team can handle, it will never be fully utilized and you will not get enough of a return on your investment.
  • How well everything works together. Can critical data get where it needs to go? Find out if your products can easily integrate before you buy them. Otherwise you will have to develop custom integration code (depending on the system it could be a six-figure cost).
  • Scalability. You should be able to use your foundational elements for 3-5 years. That means they must be able to grow with the company. It’s a huge task to swap systems out, taking from six to 18 months to do. 
  • Cost. It’s important to understand on a product-by-product basis and at the stack level how your purchases factor in and impact customer acquisition costs (CAC).

3. What do you need to achieve your objectives?

With more than 9,000 martech products on the market, how do you sort through them? Your marketing goals will focus your efforts in the right place. Also, it’s critically important to consider whether the technology you already have can handle your expected future needs. One of the key contributors to stack bloat is redundant functionality within the stack. This is caused by looking at each set of technology requirements on its own and not considering the stack as a whole.

Remember, the need to create new campaigns, leverage new channels, improve targeting, etc., means you are going to add more technology to your stack. That’s okay, as long as you keep the CAC impact in mind. 

Is smaller better?

There’s an idea going around that we should all make our stacks smaller via consolidation. The argument is that a smaller stack will be easier to manage and less costly – but will it? Replacing five products with one product doesn’t guarantee easier stack management and lower costs. A new product could add a new level of complexity and require a long implementation and onboarding period and extensive training. It could also cost significantly more than the products that are being replaced.  

Consolidation is a favorite theme of vendors with large multi-function systems that want you to use their product over everything else. There are times when this makes sense, particularly when integrations are involved, but there are plenty of times when it doesn’t. As yet there is no single platform that can deliver the functionality needed across the stack so don’t waste any time thinking about that.   

Consolidation can be needed when a stack gets out of control due to lack of centralized oversight and purchasing. Then bloat becomes obvious through skyrocketing expenses without the ability to demonstrate return on investment. We’ve worked through this process with a number of customers and in every situation it’s because of redundant contracts, products and functionality. If you have processes in place to prevent this, your only risk of bloat is keeping products that didn’t live up to expectations or no longer serve your marketing objectives. This is easily avoided by establishing performance benchmarks and conducting regular stack reviews. 

If we can’t define the optimum size of a tech stack then we certainly can’t look at a stack and say “that needs to be consolidated.”  Stop worrying about stack size, the perfect size for your stack is one that ensures you meet your marketing objectives in a cost-effective way.


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The formula for calculating martech ROI https://martech.org/the-formula-for-calculating-martech-roi/ Tue, 07 Jun 2022 16:14:59 +0000 https://martech.org/?p=352765 There's a straightforward, if complex, formula for measuring martech ROI, but we also need to evaluate the products themselves and the overall stack.

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I run a MarTech company and everyone on our team clearly understands the importance and value of MarTech and yet, when I or someone else makes a pitch for a new addition to our stack, the first question my co-founder asks is “what’s the return on investment (ROI) if we buy that product?” It seems we’ve been discussing ROI a lot lately and because we’re a relatively small team a discussion usually suffices.  A discussion won’t suffice as we scale, we need to bring more discipline and structure to the process so this week I’ve been researching (aka googling) how others approach this challenge. I didn’t find anything specifically related to MarTech but did find a number of articles1 related to calculating ROI for IT technology which were helpful. 

For products where there is a tangible cost benefit in the form of new revenue, measurable productivity improvements, or cost savings, a straight-forward ROI calculation is workable.

The ROI formula

((Gain – Cost)/Cost) x 100 = ROI%

Some notes about leveraging this formula:

  1. Time period: Three years is the most common period for calculating gain. 
  2. Costs: Costs should include all expenses to implement and manage the product for the three-year period not just the monthly or annual subscription costs. This includes training expenses. 
  3. In calculating the gain and costs it’s important to consider the trajectory of both if you expect to add more product users over the three-year time period. 
  4. An initial ROI calculation is a best estimate, the only way to validate the ROI is to implement the product and revisit your assumptions regularly over time. Measuring actual ROI will provide data that will be valuable in projecting ROI for new products that are similar in structure or value. 
  5. Document your detailed assumptions, it’s the only way you’ll be able to revisit the calculation. 
  6. Set standards where possible. For example: If you are calculating productivity savings you want to make sure that everyone in the organization is using the same hourly rate for each job function.
  7. If you are not sure how to approach this calculation, ask your vendor for help. They should understand the value they bring to your environment and anecdotal data from other customers.  
  8. Some of these calculations will be complicated due to multiple quantifiable benefits. For example: When I look at my product, value can be quantified by reduced technology expenses, productivity gains, cost avoidance, and a host of additional minor elements. If you can get to a desired ROI without quantifying every single element then good enough. The more complicated and the more variables the harder to maintain. Focus on the elements with the biggest impact. 

For some products it’s virtually impossible to quantify the ROI which has got me thinking about how to qualitatively assess the products in my stack and the overall stack itself.

In a previous life, I was involved in an angel investment group and one of the most difficult tasks in funding early-stage startups was to assign a value (valuation) to a company. There are at least eight different formulas (probably more) for calculating valuation but they all are calculated using company financials. In an early-stage venture, company financials are a best guess so any calculation done against those is going to be flawed.  For that reason, most of the angel community relies on a combination of looking at valuations for similar companies and some form of qualitative assessment, the most common being The Berkus Method. The Berkus Method identifies five critical risk factors — idea, team, prototype, relationships/build-on-demand, and sales — and an investor assigns a dollar value to each based on the company’s progress in each area to reach a final valuation number. 

A ‘Berkus Method’ for martech

We need a Berkus Method equivalent for marketing technology, a method that provides the ability to quickly assess the value of the products we use and the stack overall. Instead of assigning a cash value to each component, the idea would be to assign a rating. I’ve been thinking about the key components and have come up with the following as a first draft:

  1. Satisfies the use case for which it was acquired.
  2. Extensible to support additional use cases.
  3. Integrates with other products in the stack.
  4. Ease of deployment and use.
  5. Data contributor.
  6. Data source.
  7. Contributes to driving revenue and customer lifetime value.
  8. Contributes to lowering customer acquisition costs.
  9. Contributes to creating a positive customer experience.
  10. Contributes to customer engagement.
  11. Enables new marketing capabilities.
  12. Enables new marketing channels.
  13. Supports data compliance requirements.
  14. Enhances security.
  15. Critical to marketing.

For each component, the user would assess contribution on a scale (1 to 5 or 1 to 10) and then total the assessments and divide by the number of components rated.  Not every component would be relevant to every product so the number of components rated would be variable product to product. Are these the right components? Should there be more or less?

I’d love some help from our MarTech community in refining this idea, finalizing the component list and thinking through how to extend this to create an overall stack value. Please reach out directly with your thoughts.  Have any of you created something like this or an alternative within your organization that you would be willing to share? With more and more money being spent on marketing technology now is the time to jump on this before we are under or pressure to reduce technology costs.


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Footnotes

Investing in new business tech: How to calculate ROI;

Top benefits of calculating ROI for technology investments;

Calculating ROI on Information Technology projects;

7 Tips for How to Calculate ROI Percentage for Technology Investments.

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Here’s how startups and small companies should build their marketing stacks https://martech.org/heres-how-startups-and-small-companies-should-build-their-marketing-stacks/ Mon, 09 May 2022 15:47:41 +0000 https://martech.org/?p=352212 A guide to building your initial martech stack - the right way.

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As a startup founder in the martech industry, I’m routinely asked by other founders what should be in their marketing stack. It was also a topic of discussion during a birds-of-a-feather session at the MarTech Conference. It would be nice to respond with “acquire these ten products, and then you’ll be all set,” but unfortunately, that’s not how marketing works. Many factors impact product selection: marketing objectives, budget, composition and skills of the marketing team, and the market and competitive environment.

Startups are very different from established companies from a marketing perspective. They have no established brand position, limited personnel and little to no budget for technology. They may be entering uncharted territory by defining a new market category or jumping into an already crowded space with well-established competitors. So, where to begin?


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Marketing objectives

You can’t be successful in building your tech stack without first creating well-defined marketing objectives. You should have 3-5 high-level achievable objectives for the year (no more, or you’ll drive yourself insane). They should be aligned with the company’s business objectives and current position in the market (don’t set an objective for market leadership when you have no product or no revenue – it’s not achievable nor believable).

Here are some guidelines.

If you are entering an already established market category, your first objective should be related to positioning and differentiating the company and creating brand awareness. Creating a new market category should be about market education and socializing the new category. Do not create a new category if you don’t have to. I’ve done it twice under duress, and it requires a huge investment in market education and hard work to ensure that there is a line item for your product in your customer’s budget. In addition, if you define a new category and remain the only company in that category it is not a category. It is just a marketing description.

Your second objective should be related to the most important thing you need to do in the coming year, e.g., drive leads, revenue, launch a product, etc. You can customize your objectives to support your particular goals. As you write your objectives, you should identify the metrics that will define success for each objective so that you can quantify what you are trying to achieve.

Technology requirements

When you are clear on your objectives, you can then define how you will achieve those objectives in a marketing plan. Content marketing will be a large component of your marketing plan for most startups because it is cost-effective and impactful. With your marketing plan in hand, it becomes straightforward to build a technology plan. You need to look at each component of your marketing plan and define where you need technology to support each component and what you need the technology to do.

Experienced marketing operations professionals will be the first to tell you to start by defining what the technology needs to do before determining what type of technology you need. Don’t start with a technology shopping list, e.g., CRM, email platform, analytics, etc. Even though you may instinctively know that you need a CRM system to satisfy a need to manage contacts, to select the right one for your environment you need a clear definition of what it needs to be able to do for you. Continuing with CRM as an example – besides managing contacts, do you need it to send emails individually and to lists? Do you need it to create a pipeline structure in a specific way? What sort of reports do you need to generate? Does it need to give you the ability to create landing pages? With a comprehensive list of needs in hand, you can identify the types of technology required in your stack, and in many cases, you may find that one type of technology addresses multiple needs.

Cheatsheet

It’s important to do the work noted above, but as a starting point, I can confidently say you’ll most likely need the following components in your stack:

  • Source of lead data.
  • CRM to manage contacts.
  • Email platform or marketing automation system (note: some CRMs will provide you with enough of this capability to get you started).
  • A variety of content creation and management tools.
  • An analytics platform (could be as simple as Google Analytics).
  • A social media management platform.
  • Productivity and collaboration tools.

The work defining functional needs will be vital in selecting the right vendor for each of these categories. As you think about functional requirements, don’t forget to think about which pieces of your stack will need to integrate with one another frequently, which will dictate your vendor options.

Choosing the technology that’s right for you

Once you’ve determined the type of technology you need in your stack, two critical factors in choosing the right vendors for your environment are cost and skills. Most startups are budget constrained, and marketing technology frequently follows programs and people when it comes to the budget. That’s the bad news; the good news is that numerous excellent products are free, cost very little or offer significant discounts to startups, so you should get what you need within your budget constraints. And, remember you are not selecting technology that will be in place forever. As a startup, get what you need for the immediate future.

By nature, startups move fast, and startup employees generally perform multiple functions. Your team members must become “jacks of all trades,” leaving little time to master complex tools. Finding tools that are easy to implement and use is critical. Not every tool will be intuitive, and your team may need some new skills to leverage them properly. Invest in training. There are free programs and webinars as well as courses that charge for participating. You’ll get a great return by empowering your team to keep learning.

What next?

If you follow the guidelines above, you’ll have no trouble building your initial stack, and you’ll establish good discipline around technology selection at the same time, which will serve you well in the future. However, recognizing that some of you are under a lot of pressure and want to know what to put in your stack, I’ll share two things:

1) My company’s martech stack, which is continually evolving as we test and try new things.

2) The most popular tools in use by businesses with less than 100 people, which we’ve extracted from the aggregated data on our stack management platform:


2022 MarTech replacement survey

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Navigating the evolving martech landscape https://martech.org/navigating-evolution-throughout-the-martech-landscape/ Tue, 01 Mar 2022 16:14:00 +0000 https://martech.org/?p=349423 Change is inevitable across the marketing technology industry. Here's how to stay ahead of the game when it comes to managing your martech stack.

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One of the superpowers marketing professionals are expected to have is staying on top of the evolving marketing technology landscape. You know, that landscape with more than 8,000 products.

Have you ever been in a meeting and had someone turn to you and say, “What do you think about Product X?” which turns out to be some obscure solution they’ve tripped over or read about? I know I have. Those questions often come from someone wanting to appear informed or to grandstand, but they always make me feel like I’m not on top of things when I haven’t heard of the product.

It’s impossible to be a walking, talking expert about every technology — or even technology category — in the marketing landscape. For that to be possible, you would have to have been born on the planet Krypton, which no longer exists. Nonetheless, staying abreast of shifts and technology changes in the industry is part of the marketing and marketing operations function, and there are several significant challenges in doing that:

The martech industry is continually evolving

Emergent channels, as well as changes and fragmentation in customer behavior, serve as catalysts for new product categories and products. In the last ten years, we’ve seen the introduction of CDPs, podcasting platforms and virtual event tools, for example. At CabinetM, we do our best to keep track of new product announcements and consistently see 200+ new product announcements a year. In 2021, more than $35B in funding went to marketing technology companies.

Marketing and, by default, martech is additive

As new channels and marketing practices are introduced, they rarely replace something already in place. More often, they become another layer in the marketing program. Email didn’t replace direct mail. Social media didn’t replace email, and digital advertising hasn’t replaced print advertising, etc. Budget priorities may shift, but the program layers generally don’t. We take approximately the same number of products out of our database each year that we add due to companies retiring products or closing down.

Today, we have over 15,000 products in our martech database. Are we at stasis? Not yet. There are still tools to be uncovered. We receive on average 20-30 requests to add tools to our database a month. Ex-U.S. companies are not fully represented in our database or anyone else’s. It will take time to cover the world. The definition of martech keeps expanding. For example, most marketing departments consider workflow management tools part of their technology portfolio, though some argue that workflow management isn’t a martech category. My best estimate is that we’ll ultimately reach stasis at over 20,000 products.

Read next: What’s in your marketing stack? We’re partnering with CabinetM to find out

Keeping up with the acquisitions

Martech is a very acquisitive industry. In 2021 we saw 196 acquisitions worth $101 billion. If you have been keeping up with acquisitions in the past year and a half, this little quiz will be a breeze. Who acquired these companies in the past 18 months?**

  • Slack was acquired by ______
  • Segment was acquired by ______
  • Workfront was acquired by ______
  • Mailchimp was acquired by ______
  • Momentive was acquired by ______

Post-acquisition brings changes in product functionality, usually starting with integration capabilities. Salesforce’s acquisition of Slack allows the company to scale up a powerful collaboration tool with existing integration tools, workflow automation, and collaboration to improve productivity among internal teams and better communication between vendors and customers.

Acquiring companies generally rebrand the products they acquire and often adopt a phased approach to rebranding. Phase I, the existing brand remains in place under the umbrella of the new parent, Phase II, the new parent’s name merges with the existing brand (e.g., Twilio Segment), and then finally, Phase III is a complete name change. I’m a fan of the phased approach though I have to admit I often get lost at Phase III and struggle to remember new names.

General shifts and changes in product portfolios

Rebranding is not limited to acquisition environments. Companies rebrand and reposition products all the time due to changes in focus, sales approach, product functionality, and in the case of the large platform providers, the need to clearly represent the volume and relationship of the products in their portfolio.

Many companies have moved away from a singular list of products to categorizing products by function. SaaS companies often catalog market tools by industry – healthcare, finance, hospitality, etc. and are now increasingly also cataloging tools based on customer departments or needs – like marketing, sales, commerce and customer service. Salesforce, Adobe and Twilio are just three of the many companies that have changed their approach to presenting products. 

I was surprised to see HubSpot change its position from marketing automation to CRM, but they’ve done a beautiful job of conveying how their CRM capability serves as the glue for the rest of offerings, which makes sense from a marketing position but also from the perspective of how their product offerings are used. I asked Ellie Flanagan from HubSpot what drove the positioning change, and she said, “Many people think of HubSpot purely as a marketing automation provider, so we needed to refresh our positioning to reflect the full breadth of the platform today. A CRM platform promises a single source of truth that empowers front office teams to deepen their relationships with customers and provide a best-in-class experience. Our new positioning enables us to better highlight the aspects of our platform and approach that set us apart from the competition.”


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Given all these challenges, how do you unleash your superpowers to stay on top of the shifts and changes in the martech industry?

  1. Your worth is not in knowing a list of 15,000+ tools; it’s in knowing the products and categories that could be game-changers in your environment. Pick the critical categories for your use case, carve out time to keep on top of those, or share the load with your teammates and meet for a monthly communal debrief.
  2. In line with point 1, you should have a clear view and framework for where you are headed over the next one to two years. Let that guide you to new categories to watch. Make sure that you are saving market reports and product information related to categories and products of interest. Having a long-term view will have the added benefit of ensuring that you look at the big picture when making near-term product decisions.
  3. In the same way that you are continually looking at the performance and implementation of the products in your stack, you should make sure you are following the news from the vendors in your stack to ensure that you keep abreast of a) name changes that may cause confusion later; b) sales and support changes in the event of acquisition; and c) new functionality that may be of value in your environment. If an acquisition brings a better integration between two products in your stack, it could significantly improve performance. If resources are stretched thin, then focus on those mission-critical platforms in your stack.
  4. Some marketing operations leaders carve out a “Vendor Day” once a month or quarter to listen to new vendor pitches. This is a good way to learn about new products, and you can use these sessions to question vendors about broader market trends.

Finally, some advice for you if you have to deal with the annoying know-it-all in the meeting who tries to put you on the spot about some new or obscure technology. Throw back your cape, put your hands on your hips and assert your martech dominance by saying, “No, I’m not aware of Product X, we’re currently focused on the following areas [insert areas here], and are looking at [insert new categories] for the future. Do you think we should be looking at Product X, and what benefits do you think it will bring to our marketing plan?”

Most of the time, they’ll back off, but sometimes they may have something valuable to contribute, in which case you should recruit them to be your trusty sidekick!

** Quiz Answers:

Salesforce acquired Slack

Twilio acquired Segment

Adobe acquired Workfront

Intuit acquired Mailchimp

Zendesk acquired Momentive

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Stack evolution: Cancel those credit cards and put a process in place https://martech.org/stack-evolution-cancel-those-credit-cards-and-put-a-process-in-place/ Thu, 05 Sep 2019 16:36:13 +0000 https://martech.org/?p=235284 Through the power of a credit card, everyone in the organization has become a technology purchaser without strategy or discipline. That needs to change.

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Over the last five to 10 years, companies have been spending more and more on technology to acquire, engage and retain customers. Increased pressure to achieve revenue and customer lifetime value objectives, a noisy marketing environment, and proliferation of new marketing technology tools, has created a perfect climate for technology experimentation, adoption and spending. In many cases, everyone in the organization – through the power of a credit card – has become a technology purchaser. Without discipline and strategy, this leads to excessive spending, duplicate purchases, redundant functionality and limited technology utilization.

With technology now consuming 29% of the marketing budget, companies are putting the brakes on independent purchasing and tasking marketing with establishing a formal technology evaluation and purchasing process that ensures that the ROI for technology purchases is aligned with business performance and objectives. 

I’m surprised at how recent this process development is for many companies and thought it would be interesting to pull together a group of marketing operations leaders who have been tasked with developing a purchasing process to discuss how they approached this activity, and to learn what’s worked, what hasn’t, and what the challenges were along the way. We’ll be diving into this during our Martech panel, Avoiding Random Acts of Martech on Sept. 18, but here’s a sneak peek at some of the issues they’ve had to grapple with.

Stakeholders

Who are the stakeholders, and what are their responsibilities? How many are too many? How do you avoid being bogged down by naysayers? How do you stop bureaucracy creeping into the system?

One or more processes

Is it possible to create a single process that supports the evaluation and purchasing of an expensive, complex product such as a marketing automation platform and is at the same time flexible enough to handle a $9.99 subscription for a product with limited features?

Distributed versus centralized purchasing

What’s the best organizational approach to technology purchasing – distributed or centralized? What are the advantages and disadvantages of each? I’d vote for distributed purchasing with centralized oversight – it will be interesting to hear what my panelists think.

Best of breed versus single solution versus platform ecosystem

I happen to believe that the best approach to purchasing technology is a combination of best of breed, single solution and platform ecosystem but many organizations are hamstrung by opposing ideological beliefs. How do you work through a fundamental issue such as this?  

Closing the gate after everyone has bolted

It would be nice to start with a clean slate and build a new process on top of that; the reality is that for most of us we are jumping into an environment that has been operating without a process for years. Where do you start? Is it necessary to go back and rationalize all the purchase decisions that have been made to move forward, or do you focus on the future? 

Priority management

It used to be that the number of products that could be purchased was gated by how many the IT department could install in any given period. Today, most products don’t require IT support, so how do you handle competing requests for new products? Is there a limit to the number of new products that can be integrated into the stack in any given year? Is it necessary to retire one product to bring in another? 

Keeping everyone heading in the right direction

Several marketing operations executives have told me that it is an ongoing challenge to keep everyone moving in the right direction and adhering to a process. I’ve heard it described as herding cats or playing an eternal game of Whack-a-Mole. How do you keep everyone engaged in the process? How do you avoid renegade purchasing?

I’m sure there will be a lively discussion among our panelists with input from the audience. These are the nuts-and-bolts issues that are so important to developing and executing a coherent strategy.

I am looking forward to seeing everyone on the 18th!

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