Financial indicators turn wobbly, stock markets head south, and then north, and then south again — soon enough, whispers about possible cost-reductions begin to ricochet through company corridors.
Historically, in times of economic uncertainty, marketing departments would be the first to feel the squeeze. Marketers were considered to be the heart of a company’s discretionary spending, and it was always hard for marketers to tie their investments to real revenue impact – until now.
Eight years ago when we had our last doozy – and even the one before that in 2001 – marketers didn’t have the tools available to demonstrate where spend is going and what returns that spend is producing. But today, with the advent of automation and engagement platforms, marketing departments for the first time have the ability to do more with less AND actually have the revenue figures to prove it.
Today, marketing should see budgets and investments increase. In fact, research finds that brands that increase marketing during recessions do better than rivals that cut back. It also shows that organizations that lean into high performance marketing teams ultimately take market share during downturns.
As long as CMOs have modernized their marketing organization, the current economic instability may be the perfect time for marketers to lead their company to higher growth. And with the right plans in place, smart executives will realize that marketing may just be the department whose budget should be protected when the going gets tough.
Consider the following steps for CMOs and other executives:
Marketing is the new cross-sell and renewals business
Businesses must realize that marketers are now the driver of two essential revenue functions: cross-sell and renewals. This is a conversation CMOs need to have proactively with their executive team to further emphasize the value that marketing brings to the business. Marketing is not just the brand function anymore; it’s the customer function.
As a customer – either an individual or another business – raises their hand to interact with a brand, it’s the marketer that shapes the experience. By establishing themselves as an essential role in retention and acquisition, marketers should be able to defend themselves against the accusation that the marketing department is full of the ad buyers or the people who decide what color the cocktail napkins are at events.
If marketing plays a critical role in keeping customers – the lifeblood of any business – happy and engaged, then it takes no stretch of brain power to realize that marketing is essential to keeping the business going strong. This means that it is necessary that marketing be set up to succeed, no matter what the economic climate.
There is no “i” in customer – build bridges
That said, every customer-related function in an organization does not report into marketing, so the department needs to assume a different posture within the company. That’s why it’s important that a CMO walk down the hall to build bridges with the heads of IT and sales and anyone else whose actions are tied to the customer.
CMOs, go talk to your CIO about the fact that you have invested in or would like to invest in technology that creates efficiency or saves the organization money; go build relationships with the head of sales by sharing that you are investing in processes and programs that feed existing sales people and make them more productive. And, share how you’re doing more with less.
The purpose of “crossing the aisle” is to arrive at a common place of understanding where all departments understand the necessity of marketing’s role in retention and acquisition. Building these bonds means that when discussion around curbing marketing spend arises, the CMO won’t be the only one raising his or her hand to object.
Speak the language of love – er, revenue and efficiency
These conversations require a universal language that – in the business arena – is the language of revenue. The CMO should be able to clearly show how much revenue was driven by marketing in the last year, quarter, even month so that the department is seen as a vital function – not a discretionary one.
In order to do this, you have to proactively talk to the rest of your C-Suite team about where your money is going and what returns it’s offering. This should be both at a macro level and broken down by every possible variable, including channels, devices, regions, and verticals and across prospective and current customer bases. That way you can say, “For every dollar we invested, we see $8 of pipeline.” Or, “For every dollar invested, we see $5 of actual revenue.” Set yourself up to do this now before you’re forced into an uncomfortable discussion about budget.
Get your ducks in a row – now
If CEOs and CFOs are seeing the bottom line benefits of the marketing team and strategy, they may even see marketing as a way to increase growth at minimal additional spend during an economic squeeze. But they won’t arrive at this conclusion without a little help. So CMOs – and other marketers – get your ducks in a row.
Sanjay Dholakia is CMO at Marketo.