What now? Marketing directors are currently faced with exactly this question for marketing strategies for 2021 after a turbulent 2020 that saw record layoffs, cuts in marketing budgets and dramatically changed buyer habits.
2020 right? How are marketers reacting in 2021, which still has a 2020 feel with no major economic recovery in sight, and COVID-19 remains a major threat to global health despite the development of vaccines.
Are you still brave exploring new markets, product innovations and new customers? Or are you going back to the tried and tested playbook for existing customers, selling, selling and investing more deeply in loyalty programs?
“It’s not really about one thing or the other to me,” said Casey Foss, chief marketing officer at West Monroe Partners, a Chicago-based management consulting firm. “In my opinion, it’s about both and how much of both you need to support your individual growth goals. … You can’t just assume that you will get more out of your existing customer base. It comes from really understanding them. “
The budget fear is still high
Some industry reports from this month provide information on where businesses will focus. First the gritty news:
First, West Monroe Partners in its quarterly survey for the quarter found that most companies (35%) do not expect their company’s business to stabilize until the third or fourth quarter. And 13% won’t see it until 2022 or later.
However, Gartner found in a study published earlier this month that CMO expectations for 2021 are bullish on CMO budget projections: most of them (56%) said they had budget growth of 5% year over year and only 21% expect budgets to decrease in 2021 On the other hand, Gartner also reported in its Board of Directors report for 2020 that marketing is a function that is slated for cuts in 2021. In other words, marketers’ expectations may not match board-level reality.
Here’s how marketers plan to respond:
West Monroe Partners found that 16% of companies will actually bring new products and services to market. This is the number one priority in increasing sales / revenue (33%). The main area for technology investment is front-end customer experience / e-commerce (37%).
About 73% of CMOs told Gartner that they will be focusing on existing customers in 2021 to enter new markets. Of this existing customer-focused group, 39% remain committed to selling existing products to existing customers through:
- Increased advertising and sales efforts
- Price cuts to attract existing or new customers
- Acquisition of a competitor in the same market
Another 34% of this existing customer-centric group will introduce new products to existing customers by:
- Investing in new research, development and funding to develop and market these products
- Build strategic partnerships with other companies to gain access to each other’s sales channels or brand
- Acquiring a competing product / pooling resources to create a new product that better suits customer needs
Marketers from the UK, US, France, Germany, Austria and Switzerland set the following priorities for 2021 in a Contentsquare survey published this month:
- Increase in customer satisfaction (30%)
- Brand awareness improvement (25%)
- Growing market share (25%)
- Business Profitability Support (24%)
- Improvement in customer satisfaction (24%)
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The CMO role extends to product development
What does the focus on the existing customer plan mean for the marketing priorities in 2021? Jay Wilson, vice president analyst at Gartner and co-author of this month’s CMO Priorities Report, said it means most CMOs will be taking a low risk approach by 2021. In addition, he is told that they want to expand their roles to include product development as well.
“CMOs may not be taking a riskier approach, but this is at least some kind of growing role for the CMO in helping product development,” Wilson told CMSWire. “I think back to five years when it was very unlikely that CMOs were involved, and now we see CMOs more involved in product and service innovation and development, especially when it comes to digital products. Even if the risk is low, it still represents a kind of evolution of the role of the CMO. “
Wilson credits much of this with the rise of social media. Marketers have been entrusted with social media management for the past two decades, resulting in an abundance of crowdsourced data on products, services, and markets.
“All of a sudden, there was some sort of crowdsourced market research function that was scalable with online focus groups, and customers could make product recommendations and return product reviews directly to the marketing organization,” said Wilson. “CMOs have always been the owners of corporate marketing. Now they also represent the voice of the customer in the organization on social issues and … feedback on products and services.”
The laser remains focused on customer data
As CMO, Foss of West Monroe Partners said she leads Voice of the Customer (VoC) for her company and there she will continue to focus on 2021 regardless of the 2020 impact. What do buyers and prospects tell us based on data? For this purpose, according to Foss, it is not about focusing on internal customers or new prospects. It’s more about where your company’s focus is and, perhaps most importantly, what your customers are telling you.
According to Foss, 80% of sales last year came from existing customers for West Monroe.
“I tend to be obsessed with learning about our customers, whether it’s one-on-one interviews, a more traditional voice of customer surveys, and buying behavior analysis,” Foss told CMSWire. “The CMO or marketing team must develop the tactics or plans to achieve the company’s strategic goals.”
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Retention is a risk free strategy
Niki Hall, director of marketing at Contentsquare, a Paris-based provider of digital experience analytics, said her main lesson from 2020 is that customers stick with good brand experiences, not brands.
“Retaining customers isn’t a new priority, but at a moment when digital is the only reliable option for brands, keeping digital visitors happy is business critical,” she said. “If 84% of marketers (in Contentsquare’s study) say they can’t track their customers’ moods and mindsets right now, that’s a problem.”
There really is no risk in prioritizing retention, she added. Because if you can implement a CX strategy that meets the fluctuating needs and expectations of your customers, you are in the best position to turn new visitors into repeat customers.
Internal alignment matters
For Michael Londgren, Chief Marketing Officer of Seismic, a San Diego-based provider that provides sales and marketing solutions, it makes sense this year to focus on the existing customer.
“Our number one priority is our existing customer base and maintaining very high customer retention rates. This should be a priority for other companies looking to stay competitive for another year,” said Londgren. “The key to this is maintaining a strong internal focus on go-to-market strategies and plans, leveraging business performance insights, and continually testing, learning and adapting our approaches. In 2020, quick re-planning and customization made a requirement for marketing teams. Maneuverability will remain vital in navigation in 2021. “
Are CMOs Too Ambitious?
Some marketing executives are planning ambitious ventures in 2021. Gartner identifies the 11 key marketing strategies for 2021 that CMOs plan to reinvent efforts. Strategies Gartner surveyed CMOs about included:
- Traditional physical sales practices
- Customer loyalty and loyalty
- Virtual conferences and events
- Delivery or “buy online and collect when the deal is completed”
- Physical conferences and events
- Customer / user experience research
- Virtual sales practices
- Health and safety programs for customers and employees
- Direct sales to the consumer
- Voice of customer programs
- Selling through traditional retail channels
No one has ever said that CMOs fear big visions, but Gartner researchers find it risky in a year that “promises more challenges.” It can also overload their marketing teams.
“For the most part, CMOs will either bring these back and re-scale and add them, or they will reinvent them,” said Wilson. “… you want to bring everything back and not just bring it.” back it up but somehow reinvent how it looks. “
How can this become a reality in view of the budget cuts? CMOs conducted the survey between September and October when 2021 might seem like the savior? Now we’re a month in, has reality probably sunk in? Wilson said taking the expected budget cuts into account, reinventing and re-scaling most marketing-based initiatives, “seems too optimistic and too ambitious.” On the other hand, marketers who don’t take at least some risk can live with a low-return reality.
CMOs are being pushed to grow business results and revenues, consumer expectations are rising, and competition for disruption and experience is fierce. These are not necessarily new forces affecting the GMO agenda, but they have been “reinforced over the last year”, according to Wilson.
“The other challenges are just the economic uncertainty we all face and the ongoing political tension and unpredictability of COVID-19,” said Wilson. “So there are a lot of variables involved, probably more than ever right now. And I think in order to overcome these variables you have to take some risks and do some innovative things. “