We’re heading into rough economic waters. That’s usually bad news for marketing teams because their budgets are one of the first to be cut. That’s also a big mistake. Marketing teams have an opportunity to help increase a company’s odds of making it through and coming out the other side in better shape than the competition, and the research proves it.
For most marketers, the past few years have been quite a ride. For some, nearly every metric was moving in a positive direction, and for others, they were living on a metrics rollercoaster, not sure how to get off the ride. As such, we’re entering an era where efficient marketing (e.g. focusing on the R and I in ROI) will be just as important as effective marketing (just focusing on the R).
Looking at past downturns, those who cut marketing budgets quickly fell behind. Most of those who increased ad spend in the 2008 recession saw improved ROIs. During the Great Depression, Kellogg doubled its marketing spend and saw a 30% increase in profits. Oregon State research found that companies that increased marketing spend during a downturn saw better financial results for up to three years after the recession. Researchers from Harvard Business School say that marketers who adjust rather than slash budgets are more likely to “flourish both during and after a recession.”
So how can CMOs successfully navigate a recession? McKinsey calls marketing spend management “an essential tool in a downturn.” But, EY adds, marketers must show they have the strategic and quantitative precision to maneuver.” Both firms agree the key is in understanding the business value of marketing, including:
Easier said than done, unless you have the right tools. Planful Marketing Performance Management gives you those insights so you can better navigate the coming downturn.
So what’s the best way to convince your CEO and CFO to continue investing in marketing? Show them the real financial performance of marketing. Prove the ROI of your programs, demonstrate a clear view into spend, and partner with the Office of the CFO to tell Marketing’s story in a shared language: business value.
Seamless collaboration between finance and marketing teams isn’t standard operating procedure at most companies. Sure, trailblazing CFOs and CMOs work tightly together to find and invest in more opportunities for business growth. But, for most marketers, the CFO conversation is one-way: “Here’s your budget number. Stick to it, and be ready to justify it.”
Marketing takes that number, builds a spreadsheet of conversions and funnels and program costs, and calculates what they can do with the money they’ve been allocated. If CMOs had the right tools and insights, however, more could work with the CFO to show the ROI on their marketing plan and do it in the language of business value.
It’s the language translation that’s a challenge for most marketers. Because marketing investments are planned at a granular campaign or tactic level, with metrics focused on engagement, clicks, visits, views, etc., marketing performance is typically articulated in marketing language. It then becomes near impossible to figure out how to communicate results in a way that’s meaningful to finance teams.
We’re very proud to announce that The Business Intelligence Group recently awarded Planful a 2022 Public Relations and Marketing Excellence Award in the Marketing Department of the Year category. The award recognizes Planful’s marketing department for excellence in delivering measurable business results.
The Business Intelligence Group (BIG) honors corporate marketing teams that display exceptional creativity and use their extensive business knowledge to advance the objectives of their companies. We’ve had a lot of success as a business over the past few years, including a 65% year-over-year increase in 2021 subscription bookings and a record number of new customers in the third quarter of 2022. We’re confident Marketing was a critical success factor because we can prove the value of our efforts, in the language of business.
The award recognized our work on an ambitious marketing initiative we internally called Project Odyssey. It redefined outreach at Planful to put customers in the driver’s seat during the buying process. Customers can choose and consume product information the way they want, and have conversations about a product when and how they wish.
BIG also pointed to our new messaging focused on the value created when the Office of the CFO increases alignment with Marketing, HR, R&D, Sales, and others. Misalignment is a common issue that persists within many organizations, and we hear from companies looking for solutions to correct it everyday. Our message, and our solutions, turn siloed, manual efforts into the team efforts they need to be. As we articulate it, Planful enables everyone across the business to be a champion of finance!
CFOs are no longer solely responsible for corporate finance and investment. That’s not how we work at Planful and it’s not how our customers work. Finance is a team sport. Everyone is responsible for financial performance, not just domain or departmental performance. It’s a collaborative effort and CFOs are increasingly involved in decisions made by key functions.
Using Planful, CFOs and functional teams like Marketing can work together, using the same language and data, to improve overall financial performance. If you start today, you can have Planful Marketing Performance Management in your hands and be able to prove and improve the business value of marketing no matter where the economy goes.