Whether mastering the ‘micro-conversion’ or leaning into automation, CMOs are finding new ways to take charge of the market at its most turbulent
The pandemic spurred a wave of transformation, from increased digitisation to new ESG initiatives and changing work patterns. But as the dust settles on Covid-19 and organisations brace for a downturn, waiting for calmer waters to roll out new initiatives won’t be a viable growth strategy.
With a new business challenge around every corner, leaders will need to get comfortable operating through change. Along with the economic propensities of recession and a cost-of-living crisis, the realities of digitalisation have accelerated the pace of transformation that decision-makers must match to remain competitive.
When times are tough, the first instinct is to batten down the hatches, cut spend, and ration activity until disruption cools off. But history has shown that this can do more harm than good. During the 2008 financial crisis, research from Kantar Millward Brown revealed that 60% of brands that cut TV ad spend for six months saw brand use drop by 24%, while their brand image fell by 28%. Conversely, those who advertised aggressively saw 256% higher sales than those who cut back.
“Marketing is no longer a nice-to-have; it’s a must-have. It’s the only way you can continue to engage with your clients and build equity,” explains Reem Al-Basri, head of digital media strategy at Theorem. “With every challenge, there is an opportunity, and we saw a lot of brands thrive during Covid. If others start pulling out, you can make the most of spend because things like cost per impression start to drop. You’re going to make more on your return on investment.”
Although it’s wise to be wary, companies can’t afford to stall on marketing long term. Getting out of fight-or-flight mode starts with establishing a firm ‘future-readiness’ strategy, structured to allow leaders to respond effectively to disruptions large and small.
The onslaught of economic instability has substantially shifted consumer behaviour. While buying power may have taken a hit, people continue to shop mindfully. Al-Basri continues: “During a recession, consumers aren’t going to stop spending. They’re going to spend more carefully. You want to be in that bucket.”
She notes that emphasising customer retention isn’t enough to steer businesses through choppy waters. “If people are going to start slowing down their purchasing, your existing customer base could shrink by as much as 20%. So you still need to push hard to attract new customers, even if the orthodoxy is that they’re more expensive to manage than retained ones,” says Al-Basri.
Making the most of attribution
Recessionary retail marketing requires agility. This means working closely with commercial teams to understand how product portfolios can respond to new consumer demands and trends. Businesses may also need to appraise their messaging to focus less on product attributes and more on product or service values.
Delving into the details will allow brands to better anticipate customer needs and help marketers recognise how a brand’s actions impact consumers’ behaviour. Many companies, particularly SMEs, can struggle to access the full picture due to disconnected channels that don’t allow a comprehensive outlook. This can cause organisations to lose sight of proper attribution, modelling patterns or the ability to define the contribution of each of their channels.
According to Al-Basri, a deep understanding of the customer is crucial. But combining this with omnichannel planning and ensuring that technologies are aligned will give marketers a clear edge. “You need to use attribution modelling effectively to find those micro-conversions so you can understand what actions are going to drive customers down that funnel,” she explains.
Micro-conversions refer to all the small but incremental actions a customer needs to take before the point of sale. If a shopper engages with a piece of content or clicks through on social, these activities constitute a micro-conversion. “We can’t ignore micro-conversions because that’s the behaviour you want to start capitalising on and pushing through, and that’s when you know you’ve got the right audience,” says Al-Basri.
Keeping an eye on the checkpoints leading up to a sale can encourage businesses to trust the process and stay pragmatic. During a downturn, marketers must demonstrate that their budget is working hard and be ready to alter course if a particular strategy isn’t generating the desired results.
Understandably, marketing activities that involve higher costs will now be attracting increased scrutiny and may even be disregarded as unsustainable in today’s economy. “Getting brand building to demonstrate ROI is a very long-term process. This is why attribution modelling is so important because it will monitor those micro-conversions,” says Al-Basri. “A lot of brands are going to be more performance-driven in the next 18 months, and A/B testing is the best way to discover which messages resonate best,” she continues. “When you’re A/B testing, you can immediately see which content is working and will lead to conversions and which will not.”
Al-Basri points out the importance of gaining an overview of the right metrics based on clear objectives and using a combination of A/B testing, contextual targeting and leveraging retail data to drive campaigns. Tracking each aspect of marketing performance as data becomes available will allow organisations to fortify their marketing strategies to maintain a presence among audiences through prosperity and uncertainty.
Low code, low cost, high performance
Without a proper connection between systems and channels, it can be hard to accurately decipher how effective content or messaging is and whether or not customers are being directed towards the most appropriate micro-conversions.
Many retailers grappling with digital transformation have jumped feet-first into development and getting on with the business of the day without allocating the time or the resources to ensure their systems are properly aligned and connected. But building these capabilities retrospectively requires considerable expertise. While this presents difficulties across the board, this can be especially challenging for SMEs.
“Making sure internal systems are connected so they can properly optimise before building more campaigns means your marketing efforts aren’t just efficient, but you can also begin to identify gaps in your strategy and find opportunities to capitalise on,” says Al-Basri. She explains that well-aligned systems allow businesses to automate processes and respond faster to changing market conditions.
Low-code, software-as-a-service platforms are becoming increasingly popular for global business, not just for SMEs looking to scale. Beyond low implementation costs, digital transformation across channels will be key to establishing agile enterprise frameworks that can scale. With the right tools in place, marketers will have the ability to dial up or down involvement as the company’s appetite allows.
Recessionary conditions may be sharpening CMOs’ focus on efficiency in the immediate term, but the need for flexible and responsive enterprise strategy is no longer confined to times of crisis. Consumer needs are evolving with each new link in the chain of global disruptions, be they economic, health, geopolitical or environmental. Marketers will need to meet the moment time and again with strategies in place to manage adversity.
Al-Basri concludes: “This isn’t about future-proofing your business; that’s a very insular, defensive perspective. Instead, at Theorem, we’re talking about helping companies implement systems that improve their ‘future readiness’ and helping them build strategies that mean, whatever comes their way, they’re ready.” CMOs will need to take stock of their strategies as the market continues to fluctuate. In the interest of longevity, the best thing organisations can be today is prepared.