It’s no secret that the COVID-19 outbreak and resulting economic slowdown has impacted the way we live, work and play. From a marketing perspective, it has scrambled everything from consumer demand to marketing budgets and how we communicate with our customers.
Research conducted by the Interactive Advertising Bureau found that 74% of media buyers think the COVID-19 pandemic will have a larger impact on advertising spend than the 2008 financial crisis. Furthermore, nearly a quarter of respondents stopped media spending altogether while 46% reduced spending or planned to adjust their budgets. In addition, lead generation from conferences and in-person events will be nonexistent for the foreseeable future.
The reduced spending, and in some cases layoffs or furloughs of marketing personnel, follows a similar playbook of what has happened in nearly every economic downturn. As firms face softer demand they seek to offset the revenue lost by reducing costs to maintain margins. However, just as in good economic times where projects can be pursued with somewhat dubious return projections, spending cuts in downturns can impact projects with high returns on investment — making a tough financial position even more untenable.
A study by the Harvard Business Review analyzed the success of nearly 4,700 firms before, during and after the three major recessions from 1980 through 2008. It found that firms that cut costs faster or deeper than rivals were least likely to be a market leader following a downturn. Firms that attempted to aggressively exploit the downturn didn’t fare much better. Even companies that entered as a growth leader fared poorly, with 85% of them losing their market position by the end of the business cycle. The research found that those companies that best weathered the storm mixed targeted cost cutting to survive today with strategic investments to grow tomorrow.
So how does a marketing leader best balance the present uncertainty with an eye toward the future? We propose a three-pronged strategy to enable your organization to survive and thrive.
Master Data Management
One of the most important and underappreciated pieces of any marketing organization is its ability to leverage customer data effectively. A 2020 report on software as a service (SaaS) from Blissfully found that the average firm employed 137 different applications in 2019. Firms that are able to harness customer data and effectively employ that information within the right channels with the right messages not only will see revenue growth but also are able to strategically optimize marketing spend to get more bang for their media buck.
One of the best investments a company can make is to find a customer data platform that collects, aggregates and unifies customer data. With that said, not all CDPs or customer orchestration platforms are created equally. (Full disclosure: We are a Tealium partner.) Make sure this platform is able to capture website, or client-side, data as well as ingest server-side data (e.g., CRM or e-commerce system data). Next, the system must standardize and map that data between systems into a data layer. That can then be employed to stitch customer activities into a centralized record to create personas based on activities that can be activated in campaigns.
If done right, your investment in master data management will have a return on investment greater than almost any investment you can make during this unprecedented time and help springboard your organization to new heights as the business cycle improves.
Revenue Performance Management
Second, invest in your ability to tie revenue to marketing spend. While most advertising platforms have some analytics tied to them it is important to have a consistent strategy to evaluate the effectiveness of your campaigns.
With numerous touch points across multiple channels, rarely if ever does a customer buy on their first interaction with the brand. Generally there is an entry point, a nurture cycle in one or more channels with multiple pieces of content and then a purchase sometime down the line. Determining how much credit each activity gets will help you optimize your spend to determine where to increase or decrease investments.
Additionally, each platform has a different attribution model. Some use first touch, some use last touch and some give credit for views, even if the purchase happens in a different channel. When you set up your attribution strategy be sure to have a consistent applications method so revenue isn’t calculated multiple times.
Even before the global pandemic, few roles within an organization have changed as much as a chief marketing officer (CMO). Caught between the mandate to generate revenue growth and a changing strategic landscape — with more distribution channels, significant technological transformation, greater customer expectations and increased advertising costs — successful companies are reimagining the role of marketing within an organization.
Gone are the days of traditional marketing that focused solely on marketing-specific objectives like brand awareness, content creation and generating impressions. This shift from brand to customer experience, where revenue targets are tied to success, means marketing leaders must increase cross-functional collaboration, harness customer data for new insights while amplifying the customer experience and invest in technologies that address customer needs in real time to stay ahead of their competition.
By investing in customer-centric strategies that first understand what customers need and then present products and services that meet those needs in real time, marketers can position themselves as not only a vendor of choice but an ally for customers. Investing in tools like marketing automation, lead nurturing and scoring, personalization and integrated customer views for all functional units that interact with customers, companies will receive dividends now and into the future.
While none of us has a crystal ball to see into the future, by following these three principles your company will put itself in the best position to capitalize both today and tomorrow. Zirous, a technology data and insights company established by leading communications, IT and sales experts, is here to help you every step of the way.
We speak the language of business and technology to create customer-centric organizations. Contact us today to learn more.