Many companies have re-evaluated their marketing strategies due to the current economic turmoil. Re-assessing their marketing investment is crucial for businesses if they want to succeed with little room for error.
Even well-established and profitable businesses have been compelled to re-evaluate their strategies in light of the recent market downturn and the state of the economy. Market volatility is nothing new, and over the past few decades, many have witnessed the IT market go up and down. However, facing a tech downturn can be daunting.
Businesses must start realigning their plans to survive and grow as stock prices fall and investors begin to tighten budgets. It is more important than ever for companies to evaluate the effects of their investments over time so they can identify the levers that will enable them to navigate this volatile market. Here are a few questions CMOs should be asking as the process of refocusing gets underway to ensure success:
What generates revenue most effectively?
Companies must consider how to maximize runway and revenue and identify the factors that enable repeated growth and prove these dynamics to investors. To do this, CMOs must analyze the cause and effect of their actions, particularly those that propel the marketing pipeline, to gain a clear understanding of the variables affecting revenue.
Marketing teams can think strategically about where they spend time and money by closely reviewing their activities and ensuring nothing is wasted. CMOs should gain insight into where to spend efficiently when it comes to budget cuts. This can only be done by gathering high-level trend data to adequately emphasize how dynamics vary among segments. Leaders can capitalize on their company’s most profitable markets, geographies, personas, and campaigns by switching to segmented trend data observation.
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What truly works and what doesn’t?
CMOs should evaluate data-driven results when determining what is most productive inside the marketing framework. In the event of a downturn, it is essential to be attached to projects that can be quantified as driving results rather than those that feel the most exciting. Due to its intrinsic objectivity, data can be the most trustworthy indicator during a downturn. Business leaders must, however, be very specific about the insights they look to evaluate.
Understanding what is working and what is not requires more than just looking at previous performance; it also requires actively projecting, such as estimating the pipeline coverage required by various segments to meet revenue targets. This enables a team to develop a compelling marketing program mix that can reach the target by working backward from a forecast. It is also simpler to identify areas where assumptions about a segment may have been incorrect once the mix has been defined per segment. Forecasting is also necessary for setting clear and reasonable expectations, both internally and with the investors or the board.
Should companies scale their business?
A slump does not necessarily mean that companies should not scale; instead, they should establish some rigor in determining the factors that will inform them when they are ready.
CMOs should ensure that their product-market fit can be easily demonstrated, that internal alignment on the best use cases exists, and that they are able to identify how their marketing budgets contribute to the revenue of their company before taking any steps to scale the business.
Also read: Key Questions CMOs Need to Ask Themselves Heading into 2023
It can be easy to squander money without having a thorough understanding of the right marketing mix and market fit. Any plans to spend money and scale are immediately put on hold when this occurs. Because it can be easy for marketing to spin up and down depending on how the business is doing, the response should not always be to completely stop spending on marketing. Instead, CMOs should focus on leveraging important insights from predictive analytics that they can utilize to create a scalable business.
In the end, data is the most effective way to discover important insights into these factors. It’s more important than ever to believe in data since it will guide businesses in the right direction.
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