What now? Marketing leaders currently face that very question for 2021 marketing strategies after a tumultuous 2020 that saw record layoffs, marketing budget cuts and dramatically-shifting buyer habits.
2020, right? How do marketers respond in 2021 which still, let’s all agree, has a very 2020 feel to it about 30 days in: no major economic recovery in sight, and COVID-19 still remains a huge threat to global health in spite of vaccine development.
Do you still be bold, exploring new markets, product innovation and new customers? Or do you revert back to the tried and true existing-customer playbook, upselling, cross-selling and investing deeper into customer loyalty programs?
“To me, it’s not really about one or the other,” said Casey Foss, chief marketing officer at West Monroe Partners, a business consulting firm based in Chicago. “In my opinion it is about both, and how much of both you need to support your individual growth goals. … You can’t just assume you’ll get more out of your existing client base. It comes from really understanding them.”
Budget Anxieties Still Running High
Here’s what some industry reports from this month are telling us about where companies will focus. First, the grim news:
West Monroe Partners, for starters, in its Quarterly Executive Poll for this quarter, found most companies (35%) don’t expect their company’s operations to stabilize until the third or fourth quarter. And 13% don’t see it happening until 2022 or beyond.
However, Gartner found in research released this month on CMO expectations for 2021 optimism around CMO budget forecasts: most of them (56%) said they’ll have 5% year-over-year budget growth and only 21% expect 2021 budgets to fall from 2020. Then again, Gartner also reported in its 2020 Board of Directors report that marketing is a function destined for cuts in 2021. Marketers’ expectations, in other words, may not match the board-level reality.
Here’s how marketers plan to respond:
West Monroe Partners found 16% of organizations will in fact launch new products and services, the top priority behind boosting sales/revenue (33%). The top area for tech investment is front-end customer experience/ecommerce (37%).
About 73% of CMOs told Gartner, meanwhile, that they will focus on existing customers in 2021 over developing new markets. Of that existing-customer-focused group, 39% of them are sticking with sales of existing products to existing customers, and they’ll do so through:
- Increased promotion and distribution efforts
- Decrease in prices to attract existing or new customers
- Acquisition of a competitor in the same marketplace
And another 34% of that existing-customer-focused group will introduce new products to existing customers by:
- Investing in new research, development and promotion to create and market those products
- Creating strategic partnerships with other firms to gain access to each other’s distribution channels or brand
- Acquiring a competitor product/merge resources to create a new product that better meets customers’ needs
Marketers from the UK, US, France, Germany, Austria and Switzerland identified the following priorities for 2021 in a Contentsquare survey released this month:
- Increasing customer satisfaction (30%)
- Improving brand awareness (25%)
- Increasing market share (25%)
- Supporting business profitability (24%)
- Improving customer happiness (24%)
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CMO Role Expands into Product Development
What does the focus on existing customers plan mean for marketing priorities in 2021? Jay Wilson, vice president analyst at Gartner and co-author on the CMO priorities report this month, said it means most CMOs are going after a low-risk approach in 2021. Moreover, it tells him they also want to expand their roles into product development.
“CMOs are maybe not taking a higher-risk approach, but this does at least represent kind of the expanding role of the CMO supporting product development,” Wilson told CMSWire. “I think back five years, when CMOs were very unlikely to be involved, and now we see CMOs getting more involved in product and service innovation and product development, especially as it relates to digital products. So even if it’s low risk, it still represents kind of an evolution of the role of the CMO.”
Wilson credits a great deal of that with the rise of social media. Marketers were tasked with social media management over the past two decades, which led to a wealth of crowdsourced data on products, services and markets.
“All of a sudden there was kind of this crowdsourced market research capability that’s scalable with online focus groups, and customers were able to start giving product recommendations and do product reviews directly back into the marketing organization,” Wilson said. “CMOs were always the owners of corporate marketing .. but now they’re also representing the voice of the customer back into the organization around societal issues and … feedback on products and services.”
Staying Laser Focused on Customer Data
As CMO, Foss of West Monroe Partners said she leads Voice of the Customer (VoC) for her firm, and that’s where she’ll continue to focus on 2021 no matter the impact of 2020. What are buyers and prospects telling us through data? To that end, Foss said, it’s not about picking a focus on internal customers or new prospects. It’s more about where your company’s focus is, and perhaps most importantly, what your customers tell you.
That said, 80% of sales revenue last year came from existing customers for West Monroe, Foss said.
“I lean toward being obsessed with learning about our customers, whether it’s one-on-one interviews, more traditional voice of the customer surveys and analyzing purchasing behaviors,” Foss told CMSWire. “The CMO or the marketing team has to develop the tactics or plans to deliver against the firm’s strategic goals.”
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Retention Is a No-Risk Strategy
Niki Hall, chief marketing officer at Contentsquare, a Paris-based digital experience analytics provider, said her top learning lesson from 2020 was that customers are loyal to good brand experiences, not brands.
“Retention is not a new priority, but at a moment where digital is the only reliable option for brands, keeping digital visitors happy is business critical,” she said. “So when 84% of marketers say (in Contentsquare’s research) they can’t currently track the moods and mindsets of their customers, that’s a problem.”
There really is no risk in prioritizing retention, she added. Because if you can implement a CX strategy that answers your customers’ fluctuating needs and expectations, you’ll be in the best position to turn new visitors into repeat customers, too.
Internal Alignment Matters
Focusing on the existing customer makes sense for this year to Michael Londgren, chief marketing officer of Seismic, a San Diego-based provider which offers sales and marketing solutions.
“Our top priority is our existing customer base and maintaining very high retention rates, and that should be a priority for other businesses looking to remain competitive as another year gets underway,” Londgren said. “Key to it is maintaining strong internal alignment on go-to-market strategies and plans, leveraging business performance insights, and continually testing, learning and adapting our approaches. 2020 made rapid re-planning and adapting a requirement for marketing teams. Agility will remain critical as we navigate 2021.”
Are CMOs Being Too Ambitious?
Some marketing leaders are planning ambitious ventures for 2021. Gartner identifies that of 11 key marketing strategies for 2021, CMOs plan to reinvent efforts. The strategies Gartner asked CMOs about included:
- Traditional physical sales practices
- Customer loyalty and retention
- Virtual conferences and events
- Delivery or “buy online and pick it up in store fulfillment”
- Physical conferences and events
- Customer/user experience research
- Virtual sales practices
- Health and safety programs for customers and employees
- Direct-to-consumer sales
- Voice of the Customer programs
- Sales via traditional retail channels
No one ever said CMOs fear grand visions, but Gartner researchers find this risky in a year that “promises more challenges.” It may also overburden their marketing teams.
“For the most part, CMOs are going to either bring these back and re-scale them and grow them, or they’re going to reinvent them,” Wilson said. “… They’re looking into bringing everything back and not only bring it back but kind of reinvent what it looks like.”
How can that be reality in face of the budget cuts? CMOs did take the survey in the September-October timeframe, the time when 2021 seemed like the savior, perhaps? Now we’re a month in, has reality likely sunk in? Wilson said factoring in expected budget cuts, reinventing and rescaling most marketing-based initiatives “seems overly optimistic and overly ambitious.” Then again, marketers who don’t take at least some risks may live with a low-return reality.
CMOs are being pushed to drive business results and revenue, consumers expectations are rising and competition for disruption and experience is fierce. Those are not necessarily new forces surrounding the CMO’s agenda, but they’ve been “amplified over the past year,” according to Wilson.
“The other challenges are just the economic uncertainty that we all face and ongoing political tensions and unpredictability of COVID-19,” Wilson said. “So there are a lot of variables in play, right now probably more so than ever. And I think, in order to overcome those variables, you have to take some risks and do some innovative things.”