We talked about this important topic during a live webinar on May 14th. Watch it on-demand for actionable strategies that B2B marketers can employ to survive and thrive in 2020.
With the increasing impacts of the global pandemic and a recession looming, many businesses are trying to shore up short-term profits by cutting variable expenditures such as marketing and advertising. It goes without saying that each business will have its own macro-financial considerations to address, and there must be empathy towards decisions to cut marketing budgets where survival becomes the imperative.
My question to marketing leaders is this: is marketing something that can be cut or is it something that will drive the business forward? Have you positioned your work in marketing as an essential growth driver? Now may be a better time to shift our spending and resource allocations rather than cut. While it is necessary to contain costs, if you don't support your brand (from all marketing perspectives) you may be depleting the relationship you’ve built with your customers over time, and potentially jeopardizing the long term performance of your company.
While it is necessary to contain costs, if you don't support your brand (from all marketing perspectives) you may be depleting the relationship you’ve built with your customers over time, and potentially jeopardizing the long term performance of your company.
The immediate opportunity for CMOs is to get ahead of these decisions and convince CEOs and CFOs that marketing budgets should not be viewed as discretionary spend but as an investment in brand value and a growth engine for the business. Don’t allow your CFO to assume that the marketing budget is available to serve their needs unless the CEO is fully on board with revising the target sales and revenue goals for the year.
Every line of business will have to make adjustments, but marketing leaders should direct their efforts towards converting broad-based reduction orders into laser-focused, data-driven decisions and strategic and tactical shifts that will support the short-term needs of the company while setting the business up for long-term growth.
Preparing for Recovery
The harsh reality is that if businesses are to prepare now for recovery in late 2020/21 (a common timeline presented by economists), then they will need to put marketing at the forefront of their investment decisions. CMOs and marketing leaders will benefit from proactively getting in front of CEOs and CFOs to make the business case for continuing to invest in marketing programs while acknowledging that the new reality requires a significant shift in strategy.
How can marketing tackle this head-on? Start by thinking more like the CFO.
CMOs and marketing leaders will benefit from proactively getting in front of CEOs and CFOs to make the business case for continuing to invest in marketing programs while acknowledging that the new reality requires a significant shift in strategy.
It will behoove those marketing leaders who are building a business case to present to CFOs to leverage a concept known as zero-based budgeting, which is simply to show that everything you need generates value. Every amount greater than zero requires justification. For every dollar you spend, here’s what the business can expect to get. It requires making a business case for every line item.
The use of data to properly inform new strategies and business plans and to drive a host of tactical decisions across the business, at pace, will be absolutely critical. This should be table stakes by now so if you aren't doing this, or doing it well, start now. High-performing companies won’t rest on their laurels either; they will be doubling down and expanding their efforts, pulling in data from new sources to level up their ability to reach customers and take swift actions. Today’s business decisions will be judged and scrutinized in years to come, so they shouldn’t be viewed as a short-term fix, but a long-term solution. The challenge is that not every marketing leader today has the availability of data and analytics to execute this strategy.
It’s not going to surprise anyone that the short-term outlook for B2B marketing is extremely challenging and some budget cuts will be inevitable. There is, however, longer-term optimism and while we will be dealing with the fallout from COVID-19 for some time to come, consumer confidence will ultimately return and marketing budgets will start to bounce back.
Learn more about this important topic and gain insight into some actionable strategies that B2B marketers can employ to survive and thrive in 2020 by watching the on-demand webinar here.
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