Struggling to get marketing results with budget cuts and pandemic related operational issues? You’re not alone, but who’s driving strategy?
“Budgets have been slashed—nearly two-thirds (62%) of CMOs forecast their budgets to decline or stay static over the next 12 months” Source: Dentsu, Into The Unknown CMO Survey 2020
Wondering why that campaign didn’t achieve the results you expected and worried the right person is on the job of attaining marketing results? I ask because there are many forces in play, especially in larger organisations, that might present a dichotomy of approach to marketing initiatives. Who and what is driving the strategy?
Perhaps your marketing results are driven by the need to appease short-term results for reporting season? Maybe you’re attempting to function under outdated economic or consumer behaviour models. Or perhaps your willingness to innovate is thwarted by a lack of support and the threat of being fired?
There’s no doubt Covid has swept us into a new consumer age, and brands have had to adjust their production, distribution, pricing and promotion strategies with lightning speed. Digital transformation was fast-tracked to facilitate a tectonic shift in societal behaviour that relied on eCommerce for goods and services, demanded as we work, learn, socialise and even work out at home.
It’s been a difficult time and everyone has had to adjust to a new era – this is the connection era, a time when we have over 8,000 marketing software and platform alternatives to automate, investigate, instigate and proliferate our efforts.
It’s also a time when product ubiquity has made brand values and purpose the significant drivers of customer connection and experience. This means consumer behaviour is an ever-shifting landscape dictated more by the psychological and emotional fit than price, convenience or even, in some cases, product features.
The CMO constantly monitors and measures the dynamic market landscape in terms of consumer sentiment, behaviour, competitor activity, adaptive product development, media channels, martech, advertising alternatives, and social tone.
It is the most demanding of roles because the CMO strives for marketing results while attempting to maintain balance as the ground is constantly shifting beneath their feet. Which changes are likely to be long term, which is transitional? What is the scope and opportunity for innovation in the changes? It can be a bit like playing wack-a-mo or trying to keep a dingy upright as people clamber to come on board from all directions.
The challenge, therefore, is to harness technology for efficiency while we harness our humanity for efficacy.
The Legacy Paradigm Of The Industrial Economy
Although the principles of marketing have remained intact since trade began, we can’t take much from history in terms of marketing practice because everything is different and constantly changing. Analysts, economists and financial executives often look to history for a guide to the future. That practice had more merit when the world moved at a more manageable pace, and market dynamics were more predictable.
Up until the first half of the 20th century, the world moved at glacial speed compared to the immediacy of today. Markets and consumers changed at pace generations could keep up with. But that’s not the world we live in now.
Benchmarking the past was particularly effective in the process-driven industrial era when the economy was based on achieving scale built on commodity, compliance and uniformity. The industrial economy was geared to repetition, not change.
Please don’t underestimate the influence of the industrial economy we’ve all laboured under since the 18th century. It’s a process-driven, autocratic economy based on achieving efficiencies of scale and volume. It’s a model that’s been enshrined in the standard education system and whose principles have been ingrained in our value system for generations.
The system rewarded conformity; it did not empower creativity. Individuals were chastised for taking risks, not encouraged. Marketing in this environment was siloed and structured; consumers were more compliant and readily influenced. Consumers were in a geographically restricted market of scarcity – not flooded with so much choice and alternatives that products have become ubiquitous, replaceable, and disposable.
Today’s dynamic marketplace makes industrial era marketing a legacy paradigm from a bygone era, fashioned on data and efficiencies that quickly leads to competing on the lowest common denominator – price.
Trading Long Term Pain For The Short Term Gain
For public companies, the focus on short-term performance to appease the constant scrutiny of quarterly reporting and shareholder expectations could be driving marketing initiatives that are inappropriate in the longer term marketing results.
When the value of building a brand or relationship with consumers is sacrificed in the name of a pleasing balance sheet, it can leave the brand vulnerable to competitor activity that IS building a brand on values, relationship and meaningful connection. Not everyone in the C-suite has the patience for that.
50% of CEOs [of global corporations] see CMOs as the primary driver of disruptive growth in a company. But if a company does not achieve that growth, 37% of CEOs said the CMO would be first in the firing line. Accenture Strategy Report 2016
To build brand equity, the vision for the brand has to extend beyond the next quarter or the following year. A business has to pre-empt and adapt to changing market dynamics, but there should be at its core a commitment to purpose and identity that consumers get the chance to bond with. Perhaps time should be a balance sheet item because this exchange takes time.
The emphasis on the short term is such an issue, it’s led to the creation of a specialist Long Term Stock Exchange (LTSE) to give companies with meaningful values and a longer-term vision a more comfortable environment.
The CMOS of companies on the LTSE might be a lot more comfortable building brand and value based on consumer connection and experience because the threat of being fired is reduced.
When Goods & Services Are Ubiquitous, The Value Proposition Gets More Personal
People value recognition for being a regular, loyal customer; they value a demonstrable commitment to a shared cause; they value being heard; they value reliability and safety; they value community; they value better ideas, authenticity, and transparency. In short, their dollars are buying more than the material product being sold.
By the way, in a previous post, I wrote about how marketers have around 1/10,000 of a second to gain our attention and evoke we take action. Now we’re starting to get a handle on the complexities of marketing in today’s market and media environment.
Intimacy, Empathy & Creativity Outperform Colouring By Numbers
Social dynamics and consumer behaviour is shifting so swiftly that a brand’s best asset is the depth and quality of its relationship and connection with its target market and customers.
This might appear on a balance sheet as Goodwill or Brand Equity, and it takes time and investment to build, maintain and consolidate.
For the uninitiated, a quick review of the elements in Brand Equity from David Aaker is a helpful reminder of the deeper psychological factors marketers are attending to while working with sales and operational considerations.
Building brand equity is critical, but it’s just one element of the CMO’s most important responsibility, which is the brand strategy. Transitioning a brand through rapidly evolving consumer journeys in a highly volatile market can make retaining your existing customer and product offering the priority. Shifting to D2C digital channels impacts distribution, packaging, promotion, and ultimately – price.
Building a deeper meaning behind the purpose of a brand into the brand strategy is essential in creating a brand strategy that solidifies a compelling value proposition.
People are willing to demonstrate the strength of their moral conviction by how and where they spend. In a report by The Corporate Social Mind in June 2020, 60% of Americans want corporations they buy from to take a stand on social issues, and 50% of them often research them to see what their response is.
For marketers who only know how to compete on price, this might be disconcerting. For the rest of us, it’s the most significant opportunity of the connection economy.