Navigating Stormy Waters: Building a Roadmap to Future Business Growth

By Justine O’Neill, Senior Director, Analytic Partners

No business can choose the time and place they operate in on a macroeconomic and geopolitical scale. But as the UK faces strong, rapidly changing economic headwinds – from the declaration that the country is in a recession to bank bosses claiming it may be over less than a week later – understanding the overall market climate is critical to your company’s success. Because no matter the weather, all hands on deck should steer the company towards one goal: growth.

Marketing is the growth engine of any company. It supports short-term sales and long-term brand growth. And while doing that, it delivers a lot of data to inform future decisions. However, not all stakeholders might see this impact. Why? Because there is often a missing link that fails to connect it to the rest of the business and take into consideration the surrounding market dynamics crashing like waves into your carefully planned strategy.

It’s time to establish a full-business methodology that allows for consistent reporting and decisioning across all commercial aspects.

The importance of total business oversight

When things get rough, some brands might take down the sails. But with the rate at which markets are evolving, businesses cannot afford to waste time deciding which path to take. Many businesses may need to adjust their sales targets, increase efficiency, or minimise losses due to negative trade winds. This is when it comes down to effectively and efficiently connecting all the business’s commercial drivers across departments.

What’s often hindering this agile, forward-looking decisioning, is internal miscommunication and collaboration. If marketing and finance are not on the same page, businesses will constantly have to review and justify objectives, spending, and strategy to a variety of stakeholders. This is incredibly ineffective and will hand competitors an easy victory. If advertising, media spend, and other business factors, such as pricing action or supply chain management, work together, the business will be much more successful and grow in the right direction.

That does not mean completely rewriting business functions. Instead, it prioritises connecting all business elements in order to remain singularly focused on the overall commercial business goals and objectives.

Factoring in key business drivers and the unexpected

But even smooth sailing can be misleading. If a company grows by double digits year after year, it is likely that a number of factors contributed to that growth. Marketing is one key business driver. However, if a business looks at metrics in isolation, it can easily attribute growth incorrectly and falsely to single marketing activities or, if coming from the finance angle, other factors. While 83% of CEOs believe marketing is a clear driver of growth, no one wants to be the CMO who claims marketing is the only growth driver when attempting to replicate performance the following year.

Scenario planning allows brands to connect those dots and establish a methodology that is consistent across all aspects of the business. This allows for more strategic positioning when the next storm is coming to capitalise on emerging opportunities when they arise, and securing a resilient path to future business growth based on internal and external, marketing and non-marketing data. While the approach will vary by industry and individual company, there are some key business drivers that all companies should consider in their scenario planning such as media inflation, price increases and supply.

The inflation experienced in 2023 is an excellent example. Media suddenly became more expensive, with a 3.8% increase in costs. At the same time, brands had to take pricing action between them. And those two factors combined limited brands’ budgets; to put it in perspective, a $10 million media budget in 2014 would now require a budget of $12,707,826 to achieve the same outcome.

Inflation is a highly volatile economic factor, and price changes can cause consumer behaviour to shift at the speed of light. However, they are essential for driving efficient optimisation scenarios. It is critical to monitor in order to better capitalise on fluctuating media costs throughout the year and allocate budget to optimal channels. In this way, inflation becomes less of a risk, and brands can use it to their advantage to maintain brand value, with the main benefit of keeping prices under control.

Marketing teams should also collaborate with Supply Chain Management. For instance, during the pandemic, there was a rise in pet ownership, or supply issues could arise, such as when a tanker was blocking the Suez Canal. Through a collaborative relationship, marketing provides essential marketplace information that impacts changes in demand, and supply feedback can influence the amount of effectively spent marketing budget.

Marketing is also responsible for strengthening the company’s competitive position, establishing brand values and loyalty, and developing internal and external relationships that support operational efficiency. Market research, using specific customer insights, can effectively forecast demand patterns by monitoring traffic. Furthermore, by identifying the most effective channels for reaching target consumers, whether through ecommerce or in-store, businesses can accurately determine where products should be sent.

Optimising to Commercial Intelligence

So, revenue generation is a team sport. Businesses must engage all media, marketing, finance, agency, and executive stakeholders in their analytics programme to make it truly commercial and have an impact on the overall business growth. Multiple layers of leadership must be aligned on business goals, and leverage the available analytic insights and potential outcomes so that the company can make forward-looking decisions.

We are seeing this in part through the merger of the CMO and CFO roles to form the CRO position in recent years, which allows full oversight and the ability to align commercial models with the customer at the centre for a holistic view of the business. However, it is not about creating new roles but connecting internal expertise to create commercial intelligence. Accurate forecasts get buy-in from stakeholders who can evaluate optimal media spend strategies to increase sales.

A commercial intelligence framework helps achieve goals and adapt to market shifts. It’s a living, breathing piece of work that businesses can return to and revisit as the assumptions influencing scenarios shift, or the forecast changes as individual categories navigate external and internal pressures. After all, in the stormy seas of business decisions, those who steer wisely will always find themselves in calmer, more prosperous waters.