Marketers are being urged to defend their budgets by wooing the chief financial officer as a key ally and then ditching the jargon and optimisation metrics to embrace board-friendly business outcomes.
While CPIs, PPCs, KPIs and top and bottom funnels might be essential language in many marketing departments, to most business people, these terms are simply gobbledygook.
That is one of the key findings of Forrester’s Navigating The 2023 Downturn: B2C Marketing Executives Report, which sets out top strategies for CMOs to combat the economic turbulence. And with data from Forrester’s Customer Experience Index showing that the average score declined in 2022 for the first time in four years, the report calls for marketing chiefs to make brand experience the top priority in all scenario plans.
Other key points in the report include:
• Levelling up the brand’s customer experience by fixing the “potholes”. Consumers demand better from brands this year. While, during the peak of the pandemic, 61% of online adults in the US, UK, and Canada were forgiving of companies’ poor customer experiences (long lines, wait times, and delayed deliveries etc), their patience has run out: 63% expect better customer service in 2023, even though many companies are still short-staffed.
This means improving the customer experience (and brand experience) must top each iteration of the CMO’s scenario plans.
But there is work to do: One in four B2C marketing executives does not have a good understanding of their customers’ friction points (“potholes”), and nearly half (46%) believe that the cost to improve their company’s customer experience will outweigh the benefit they will get from it. If consumers’ repeat business matters this year (and it should), levelling up customer experience must take precedence.
• Win the battle for talent by powering up employer branding. In every downturn, the prospect of job loss looms over the economy. Yet, despite the spate of recent tech layoffs, unemployment is well below that of the year before. The underlying dynamics of the “great resignation” – like demographic changes, mindset shifts about the future of work, and increasing employee empowerment – still make for a tight labour market in the
This solidifies acquiring and retaining the best talent as a top C-suite issue and, thus, an imperative for CMOs. In fact, Forrester’s Q2 B2C Marketing CMO Pulse Survey, 2022, identified employer branding and employee experience among B2C marketing executives’ top priorities.
Therefore, during this economic downturn, marketers can demonstrate the discipline’s versatility and usefulness by advancing employer branding across the business. And, Forrester maintains, traditional branding tools and tactics (needs assessments, competitive mapping, gap analyses, personas, journey maps, and campaign optimisation) are equally suited for employer branding. When deployed in concert with human resources, this is a formidable strategy to win the battle for talent, the report claims.
• Drive growth with a blend of offence and defence. Shareholders and their boards are eager to preserve profitable growth, especially as volatility persists this year. While seemingly counterintuitive, this type of environment often presents the best growth opportunities as long as offence is balanced with defence. Offensive opportunities arise in downturns in the form of depressed assets that can be a bargain for the right company.
During the 2007 to 2010 downturn, companies with acquisitions totalling at least 10% of their market cap returned more than three times their shareholder value. Organic growth comes from seizing emerging opportunities as market dynamics change (as Target did by entering the grocery segment in 2009) or simply outmuscling weaker competitors less equipped to handle the turbulence (as Diageo plans to do by boosting brand investment).
A downturn is also a good time to pull back on underperforming lines. Harvested savings can fund M&A and organic growth. Firms must double down on the fundamentals of marketing, like customer segmentation and valuation, as well as product, pricing, and channel strategy, to drive growth.
• Defend advertising spend by ditching the marketing speak. Welcome to the club: marketing budget has likely been slashed this year. When Forrester surveyed CMOs in Q4 2022, the vast majority (70%) indicated concern that economic turbulence would negatively affect their 2023 marketing budget. Last November, Forrester forecasted a slowdown in ad spend in 2023. And this is where diligent scenario planning comes into play. While some companies hastily respond to market turbulence by cutting advertising, Forrester finds that when companies continue marketing during a downturn, they recover and grow faster than their competitors.
Demonstrating marketing’s business value requires a CFO champion – especially when companies look to cut costs. This necessitates translating marketing speak and optimisation metrics into board-friendly business outcomes. A CFO ally can help model marketing planning scenarios directly to incremental revenue, profitability, and cost savings. And transparently involving a CFO as a co-thinking partner makes them more apt to proactively advocate for marketing spend than reactively scrutinise it.
• Deliver connected marketing solutions by selecting integrated agency partners. This year, CMOs are forced to do more with less. Agency rosters offer significant opportunities to add more value, develop more content, and create greater business impact while managing agency fees. Select integrated agencies that combine capabilities like technology platforming, data science, and content and media management.
Integration is not about paying less for agency services; it is about reconciling the number of agency specialists. Doing so puts your brand alongside nearly 25% of marketers who selected integrated agencies from 2020 to 2021.
In addition, Forrester’s 2022 data shows that 31% of B2C CMOs intend to integrate agency assignments to increase their marketing effectiveness. Simply put, selecting partners with an integrated marketing approach increases your ability to connect with consumers in a complex media landscape.
The report concludes: “CMOs can toss their ‘business as usual’ playbook into the recycling bin. While uncertainty has become an overused word to describe 2023, it’s for good reason: market signals are rampant with contradiction and flux. This puts CMOs in a constant cycle of scenario planning and forces them to play it safe.
“Forrester’s 2022 data shows that 69% of B2C marketing executives said that they planned to take bigger marketing risks in 2023 compared with 2022. But sidelining risk is at odds with achieving business gains. During downturns, CMOs can turbocharge their company’s brand experience as part of a smart growth strategy.”
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