By Neil Dowling, Chief Marketing Officer at Rightpoint
CMOs will start the New Year facing some stiff economic headwinds. Inflation is still a concern, as is the war in Ukraine and its impact on energy costs. Still and while the tech industry is shedding jobs, the overall U.S. job market is holding steady. Meanwhile, Forrester predicts a 5% increase in spending across all consumer categories.
Downturns are painful on many levels but in some ways, they provide opportunities. There’s less competition in advertising as marketers hold back, which makes it easier for brands willing to market to stand out. For instance, Airbnb launched during the Great Recession of 2008 as a way to help people afford their homes, giving rise to a billion dollar business and reinventing the world of travel in the process.
Knowing the right course of action can be difficult for CMOs. On the one hand, you don’t want to take risks during an economic slowdown but neither do you want to miss opportunities to gain market share or enter sectors while competition is low. Now that it looks as if a recession is likely, all CMOs are wise to reexamine their marketing priorities and strategies and to seek the right balance between growth and conservation.
Below are three strategies to navigate choppy waters and potentially even thrive in an uncertain economy.
Stay the Course
There’s always tension between investing in the brand and more short term more short term demand plays (although I personally believe that tension is unnecessary). The brand team wants to tell brand stories, while the demand team wants to move product. This is an issue Forrester warns about in its 2023 Predictions Report: “Chasing short-term revenue growth in 2023 will come at the cost of long-term brand building.”
The key to success is to be smart and ensure the balance is well managed. No doubt we’ll see a lot of short term reaction in which ad spend is curtained in favor of more sales lead activities. Over time, however, this can be detrimental, especially if challenger brands decide to make a move. All CMOs must find a way to fund brand and demand initiatives.
You need a minimum viable level of exposure in the market to create presence and help sales down the road. If you turn it all off, it’s a very long way back. Winning the mindshare back and getting in front of the audiences and being top of mind again after cutting off ad spend is more than just starting over when economic conditions are better.
Part of the battle will be convincing leadership, specifically the CFO, that they need to market when your competitors aren’t. “In a time of crisis, marketing is usually the first department that receives cuts,” writes Stephanie Chavez in Forbes. As she points out, companies that cut marketing suffer in the long run. Data will help CMOs forge better alignment with their CFOs, specifically tying marketing spend to revenue growth. Gather data points that illustrate how brand or reputation activities relate to increased sales over time. For instance, recent research shows that “brand reputation drives up to 63% of a company’s market value, so investing in it is money well spent. “
It will help to adopt the language of your CFO. Now more than ever, marketers need to think about a path to shareholder value, where every dollar spent on a branding or performance campaign equates to $X in your sales pipeline. Your data might not be perfect but that’s okay. The point is to start modeling and in the process, engage with CFOs using a language they understand: data.
Go Back to Your Core
A recession is a good time to focus on your core – your customers, people and products. And the interdependence on the experience across all three will help organizations drive competitive advantage.
All too often the respective experiences in these areas are disjointed and not thought of (or invested in) as part of the same end goals. But, the real power and opportunity comes when you bring it all together and think about the totality of your brand’s experience; for customers, employees and products. You can then play off your brand messaging and proposition in a strategic and consistent way across all three.
Keep it Simple. Really Simple.
It’s always a good time to reassess marketing priorities but it’s even more important when you want to make the case that your organization is best served by leveraging marketing for sustainable growth. Now is a good time to apply discipline and re-prioritize marketing functions that have probably grown to do too much.
It can be difficult to polarize your investments to those that deliver the best ROI. But, as the CMO and key driver in the discussion on your organization’s go-to-market, now is the time for you to identify your winners and back them.
Lastly, simplify your message to the market. If your company tries to be all things to all people, your message is likely muddled. Remember, your customers and prospects listen to your messaging and then repeat it to their colleagues when they build their internal case for doing business with your company. If it’s not unified and clear, they won’t succeed. A clear and concise message will go a long way in building confidence in your brand. And it will be equally valuable in building internal confidence and mobilizing resources where it makes the most sense.
What happens if the recession is short lived and business bounces back? I would argue that these exercises actually strengthen your organization’s foundation in ways that will provide additional trajectory when market conditions improve. In other words, rather than playing catch up, you’re off to a strong head start.
About the Author
Neil Dowling is the Chief Marketing Officer for Rightpoint, a global experience leader and Genpact company. With 20 years of experience in marketing for technology and professional services companies, previously working for businesses including Genpact, Cognizant and Fujitsu, Neil leads a team of marketers across the entire function from brand strategy to supporting company revenue targets to create sustainable growth.