Navigating a recession can be challenging, any CMO who has ever led a marketing team through an economic downturn can confirm it isn’t ideal. With budgets tightening and demand for products and services slowing, it's important to stay strategic and focused on the things that will drive long-term success.
So, where should the CMOs who are ready to weather the storm set their focus? Here are a few key strategies to consider from some of the top CMOs in the game.
Very few finance teams are handing out more budget in the foreseeable future–let’s just be realistic about it. In fact, according to Grant Thorton’s recent CFO executive survey, 58% of finance executives cited cost-optimization as their #1 priority in the next six months.
But, “doing more with less” can feel like a vague platitude that doesn’t really help anyone make any decisions. You don’t have to hack away at your programs to conserve your budget–you can hone in on micro adjustments at every level of your funnel and ensure you’re spending in the right areas to add up to some major savings.
Be as thoughtful as you can be with your spend right now. Every dollar matters.”
Sara Varni, CMO of Attentive, recommends getting deep into the nitty gritty of your funnel and making every adjustment possible, “Be as thoughtful as you can be with your spend right now. Every dollar matters. Make sure that you’re fine-tuning every conversion point in your funnel to irk out as much as efficiently as possible. Speed to lead has never been more important. Follow-up has never been more important. You don’t want to leave a pipeline dollar on the able these days. Even though that might seem small on the margins, that can add up to get you closer to what you need by the end of the quarter.”
During a recession, it's more important than ever to prioritize customer retention. Focus on providing excellent customer service and finding ways to add value for your existing customers, as reducing churn will be one of the things that keeps you afloat in tough times.
Customer retention is just as important, if not more important than customer acquisition, and your marketing strategies should account for supporting a robust customer success program. According to Gartner, 80% of your future profits will come from 20% of your existing customers. Supporting a healthy customer success program ensures that your customers really see the value in your product, and that results in a few wins for your marketing program:
The best advertising is free. When your customers are happy, they’ll tell their colleagues, and no one networks quite like SaaS. You want to be the product everyone can’t stop raving about, and that comes from well-educated, well-supported customers.
ROI on your CAC
It costs a lot of money to get someone to sign that contract–don’t waste it. High customer acquisition costs (or CAC) means that most customer relationships aren’t profitable early on, but a Harvard Business School study found that loyal customers generate big returns. They found that increasing customer retention rates by just 5% lead to increasing profits anywhere from 25% to 95% long term.
A great customer success program can demonstrate the value of your product so that customers are thrilled to adopt new features and products and expand their contracts as they grow. Prioritizing marketing to current customers, and educating and empowering your customer success team on your marketing efforts ensures your customers not only stick around but grow with you.
A recession can also present opportunities for growth and expansion. Look for ways to pivot or enter new markets, and be open to exploring new partnerships or collaborations that could drive revenue.
I’m trying to reward creativity wherever I can. Some of the best companies in the world were born in these crazy times of uncertainty, Salesforce being one of them.”
Sara Varni, CMO of Attentive, shared her thoughts on encouraging creative thinking on her team, “I’m trying to reward creativity wherever I can. Some of the best companies in the world were born in these crazy times of uncertainty, Salesforce being one of them. Salesforce started in 1999 right before the Dot Com Bust. I’m trying to encourage people to think outside of the box, think about how we can be investing in things that are free except for the people resource. Wherever I can, I’m really trying to encourage my employees to think about how we can do more with less.”
Marketers are great storytellers, and that skill is more important than ever when things get tense. It’s your responsibility as a marketing leader to make sure your entire company understands what your team is doing, why they’re doing it, and how they can stay in lockstep on the messaging you’re creating.
The challenge for us as marketers is that we’re in this world of art and science, and the science part of marketing is really complicated.”
Scott Holden shared his advice with us on maintaining education with your non-marketing departments, “The challenge for us as marketers is that we’re in this world of art and science, and the science part of marketing is really complicated. It’s hard to explain all the nuance of what we do to people that aren’t in the trenches with us every day, and one of the things marketers have to be is great educators and storytellers inside the company about how marketing works.
I invest a lot of time in explaining the programs, understanding the different segments behaving in different ways, and different marketing channels behaving in different ways, all of that matters when you’re showing up to your CFO hat in hand. If they understand the mechanics of what we do, they’re much more likely to green-light that initiative or that budget for that new program.”
With economic uncertainty and change, it's important to keep your team, customers, and stakeholders informed and reassured, but your state of mind matters, too. Cultivating a network of marketing and demand generation leaders of all different experience levels that are facing the same decisions and challenges as you can help you keep your head on straight and lead from a better place.
Be flexible, be sane, know that tough times don’t last, tough people do, and we’ll all get through it."
- Sarah Franklin, President & CMO, Salesforce
Sarah Franklin, President and CMO of Salesforce, knows the importance of taking time to center yourself and rely on your peers, “Be flexible, be sane, know that tough times don’t last, tough people do, and we’ll all get through it. There’s more to life than only pipeline, even though we live and breathe it. Building a network and community is so important in this industry to keep yourself steady.”
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