Hedging Your Bets for the Future
According to Gartner, 76 percent of marketing leaders expect to be working with drastically reduced budgets. Some will regard reduced marketing budgets as crippling while some may and will view that as a doom-and-gloom scenario. We see it as an opportunity for chief marketing officers (CMO) to develop innovative strategies that will enable them to navigate through this complex and shifting landscape.
The CMO’s role is a critical one in any organisation. It is an essential cog in the larger mechanics of a company, playing a role in guiding companies on how they may respond, reignite, reimagine and perhaps, transform themselves to face the challenges of a post-pandemic world when that eventuates.
1. Embrace and Accelerate Digital Transformation
Since the advent and success of transactional businesses like Amazon and eBay in the early days, marketing leaders have long known that customers were shifting to digital across the entire journey. The resilience and dexterity illustrated during stay-at-home orders provide immense evidence that customers are ready for much more than they’ve been given credit for.
The current disruptions in all parts of the value chain have created breakthrough opportunities for digital to drive success in marketing and customer experience. They can stoke demand, build relationships, optimise customer data and predict channel shifts.
This leads us to the following point.
2. Drive and Review Customer Insights
To determine how to win, CMOs need to understand the nuances that drive customers’ needs and accept that much of what they know last week may not hold true anymore. Trends and tastes are changing rapidly due to choices. Rigorously drive to collect and use customer data to augment existing market research, address market uncertainties and go one step further to create an insights engine. Look for new ways to capture more information on how customers and intermediaries are feeling and behaving. That intelligence will add value not only in marketing but through the entire company.
Nike is a powerful example. The brand has fended off new competition and managed their own against established brands, as well as brands that reinvented themselves. They delivered this by providing consumers with great products, brand association and relevant marketing. Their growth is powered by digital insights that it embeds into every part of the company. Its Nike Direct division hasn’t just fuelled sales. It provides data on fast-changing tastes and preferences, informing decisions in everything from innovation strategy to product design to community building. This has led to innovative breakthroughs like the Nike Fit app and their 30-day wear test.
The folly of many marketing divisions in any company is that they tend to rely on very generic “annual” market research proposals from agencies to build their insights and they tend not to fully utilise or robustly test what the data presents.
3. Build in Parallel
To succeed, CMOs need to be agile and adaptive. First, they must adapt and innovate marketing and sales to meet the short-term business realities in this radically disrupted environment while also planning for things that drive return in the long run like brand purpose and customer experience. Secondly, it requires them to lead, direct and reimagine different scenarios that will yield evident outcomes. Armed with customer insights and investments in digital, it can be done.
Starbucks has been perfecting the art of operating their strategies at two levels. Short-term, it is taking advantage of its mobile app and loyal base to keep relationships and drive growth. For the longer term, the company is reimagining the experience for both customers and employees, investing in new drive-through stores, pick-up windows and better machines – all to promote growth and convenience in demand.
4. Redefine and Refresh Your Brand Purpose
As consumers demand better corporate behaviour, a brand’s reason for being means more today. Consumers want to transact with ethical companies that are trying to do the right thing. They expect businesses to be empathic and responsible employers. During the early onset of the pandemic, while Top Glove’s shares rocketed, the brand’s reputation had also been plagued by forced labour allegations, which resulted in a ban by the US Customs and Border Protection (CBP) on imports from two subsidiaries of Top Glove. Top Glove is reportedly set to pay about US$40 million (RM166 million) to its migrant workers, which is substantially higher than the estimate of RM56 million that Top Glove revealed earlier. Consequently, the shares took a beating. These events have shown us that consumers are willing to walk away from brands that mistreat people. And while they will forgive many missteps, they expect transparency.
Amazon, for example, has come under public fire for its refusal to disclose how many workers have contracted COVID-19. In response, the company went beyond mere words committing an astonishing $4 billion – about a quarter of its annual profits – to make Amazon workers safer and fulfil its mission.
It’s simply not enough to be seen as trust-worthy. Consumers expect companies to make an impact on society. They want assurances that the brands they engage or transact with are protecting people’s health and the environment. And they want to see them promoting social good.
To act on these new priorities, recalibrate marketing plans. Accept that these are no longer annual documents but works-in-progress to be reviewed monthly, if not weekly.
It’s still too soon for any CMO to predict the months ahead. A vaccine could change the landscape, as could a second or third wave of infections. In Malaysia, we are just experiencing a third wave of the pandemic and globally, many governments are unsure if they have hit rock bottom as yet. In the UK, they are just heading into a month-long lockdown. But planning for the known unknowns and building in good behaviours now for marketing teams will help ensure sustainability over future horizons.