Marketing has seen some significant changes over the past few decades. As the internet has become a prime source of communication worldwide, fewer companies are investing in traditional marketing methods like commercials and print advertisements.
Instead, they funnel their money into digital marketing activities such as social media, informational content, and ad placement through search giants like Google.
While digital marketing spending has grown annually since 2007, companies may need to reduce their budgets in 2023.
Economists are predicting a possible recession in the next few months, which will impact how companies spend their cash.
Here, we’ll explore several trends for VPs and directors of marketing to watch over the next 12 months.
All company executives are watching for potential adverse economic developments over the next few months. In 2022, countries worldwide were hit by rising inflation rates, resulting in governments increasing interest rates.
Inflation and increased interest rates make it more expensive to conduct business operations, even if the overall unemployment rate remains low and consumer spending is still high. Companies that don’t have a robust balance sheet with cash to rely on will need to pay close attention to their budgets to prevent potential fallout.
Marketing is usually one of the first departments to experience budget hits. When customers decide to hold on to their wallets, there’s less willingness for businesses to spend on advertising campaigns with unclear results. Instead, companies seek to retain existing customers and use cheaper, alternative methods to attract new ones.
VPs, directors of marketing, and chief growth officers (CGOs) should examine their current marketing strategies to determine which ones are worth keeping and which ones to scrap for the time being. They should also investigate ways to reach new customers that don’t require significant investments of company funds.
It’s not unusual for companies to implement a hiring freeze or institute layoffs, especially if the business is strapped for cash. If either option is on the table, VPs and directors of marketing should make a list of the most important positions in the department and take action to prevent significant losses of knowledge and resources.
A list of critical functions prepares the head of marketing if the company decides layoffs are necessary. They’ll be able to release individuals whose roles aren’t vital to the organization while retaining those with essential skills.
However, companies can’t stop employees from leaving for other opportunities. The best they can do is implement cross-training programs to ensure that workers understand each other’s jobs and can perform them if someone decides to leave.
Cross-training is also beneficial for employees who want to learn new skills. A good cross-training program can prevent boredom, which typically arises once an employee has been in the same job for at least a year. They’ll gain knowledge that can enhance their résumé while also getting prepared to take over a new role if it becomes available.
Data analytics has become essential to company leaders who need current statistics to make critical business decisions. With the right information, business leaders are in a solid position to adapt quickly to changes in their operating environment.
VPs and directors of marketing should use a diverse set of key performance indicators (KPIs) to monitor the performance of their advertising strategies and customer outreach. Depending on the responsibilities of the marketing department, they can extend their KPIs to provide immediate information concerning revenues and customer retention.
In a recession, it becomes even more critical to monitor the performance of the business. By incorporating current data and applying the relevant formulas, VPs and directors of marketing can adapt quickly to shifts in the market, reducing the risk of lost time and money on efforts that aren’t working.
Developing KPIs takes time and effort. VPs and directors of marketing should identify essential benchmarks for their department and determine the data necessary to calculate them. They can assign the monitoring of KPIs to high-performing employees.
Most organizations rely on existing and returning customers for a large share of their revenue. When they lose customers, they can see significant drops in their sales that may be difficult to recover, especially when there isn’t a lot of money available for new marketing initiatives.
As a result, VPs and directors of marketing should prioritize the customer experience. Happy customers will return again and again for new products. However, companies can lose unhappy customers forever.
In the worst cases, disgruntled customers will share their adverse experiences with others, which can cause potential customers to look elsewhere for other buying options.
Marketing managers can ensure customers stay with the organization by implementing strategic customer service initiatives. Following a major purchase, they should ensure customer satisfaction and address negative feedback. They can encourage future purchases from the customer by offering one-time discounts or other promotions.
Companies that don’t have much to spend on an in-house marketing team during a rocky economic time should explore outsourcing. Outsourcing allows VPs and directors of marketing to obtain qualified, skilled assistance without the commitment that an employment contract requires.
Typically, freelance marketers work with several companies at once, providing them with a broad depth of experience that can be very helpful to organizations. While they may command a higher hourly rate than an employee, you won’t need to hire them full time; instead, you can ask them to assist on a part-time basis that suits the company’s needs.
Outsourcing can help VPs and directors of marketing constrained by strict budgets or whose companies don’t yet require full-time workers.
We expect 2023 will be a challenging year for most organizations, especially if a recession sets in. VPs and directors of marketing can begin preparing by assessing their current advertising strategies and workforce. If layoffs are possible, engage in cross-training to secure company-specific knowledge you don’t want to lose.
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