How marketers can prepare for a recession

With the news cycle dominated by Brexit, it’s easy to get post-apocalyptic in your thinking. As the impact of leaving the EU remains unclear, many senior marketers will remember the impact the financial crisis a decade ago had on their business and the function. With three-quarters of US economists predicting a recession by 2021, and an uncertain and pessimistic outlook for the global economy, have any lessons been learned since 2008?

Marketing is a department that’s better off planning ahead for the possibility of an economic downturn. In times of financial hardship, businesses will slash budgets from ‘non-essential’ resources. During the last recession, many companies prioritised lead generation above raising brand awareness and marketing found itself sidelined in favour  of functions that could prove their direct link to ROI.

With a focus on the bottom line, a leaner business model, and short-term budgets, a crisis like a recession puts a lot of pressure on marketing to deliver. So how can it show its value to the organisation and avoid the cut?

Become customer-centric

At a recent B2B Marketing Leaders’ roundtable, talk inevitably turned to Brexit. While one marketer working in manufacturing said they had been given budget to stockpile raw materials, the greater concern for many was simply getting marketing’s name up the business agenda.

The most productive thing marketers can do now is make a name for themselves to prepare for when times are tough. If the biggest risk to a business in the event of an economic downturn is a loss of revenue and reputation, marketing is well positioned to guide decisions across a business. After all, who knows the customer better?

According to Lance Mercereau, CMO at Rosslyn Data Technologies, this is a clear place where marketers can stand out. “Marketers have to be very close to the customers and very involved at every step of the customer lifecycle,” he says.

When Lance joined Rosslyn five years ago, he implemented a customer lifecycle process that meant marketing is involved in brand awareness, lead generation, but also closing sales deals themselves. “Marketing is involved in every step, which is really important,” he explains. “I have a team that really understands what the requirements are for the customer. We can bring that knowledge back into the business.”

Lance closed one of the fastest deals himself last year, what he calls “a challenge to sales”. He was able to implement a system that deployed marketing across the whole lifecycle, a feat he says would’ve been impossible at a larger organisation.

Adjust your marketing plan

The output of this strategy means marketing positions itself as integral to the bottom line, and is able to prove direct impact on revenue. This has meant challenging assumptions and overcoming marketing’s traditional image problem in many organisations as a support function rather than influencer. “I was speaking to a marketer recently who said marketing isn’t revenue generating and I totally disagree. If you think that, it’s not going to happen,” Lance underlines. There’s no reason why marketing can’t be involved in the sale, he says, even if its name isn’t on the final contract.

Lance believes marketing is the glue of any organisation, and this perception is what drives his thinking. How can you convince the rest of the company that this is true? It’s all about providing insight to the board, he explains.

“Marketers need to build relationships with the board and the management team. The CFO is looking at forecast and profitability and marketing is well positioned to collaborate with colleagues and bring ideas to the table.”

Crucially, Lance explains, in times of a recession, marketing and the rest of the business may disagree on what constitutes risk. The board will be most worried with general financial risk to the company, while marketing might take a more holistic view, focusing on reputational risk. “If the board can’t figure out that marketing is there to help them and bring in new solutions and services across the whole customer lifecycle, they’re not going to be supportive,” he says, suggesting that positioning marketing as indispensable to the bottom line ahead of a crisis is the best way to remain resilient.

Unfortunately, it’s harder to justify future-proofing against more intangible threats such as those to corporate reputation.

“Every business needs revenue and employees,” says Lance, “so reputation is important. CEOs should be concerned with other kinds of risk, such as feedback on Glassdoor.” He explains that investors look at comments on these kinds of company review sites, as well as taking in other factors, because it’s expensive to find and attract talent and therefore impacts revenue as well.

Prove your ROI

In times of economic uncertainty when belts are tightened, marketers will need to prove every pound of their budget will generate the highest rate of return. Jeff Davis, founder at JD2 Consulting Group, says the number one thing marketers can do to ensure they remain relevant is to clearly demonstrate the value and ROI of their work.

“If the team is not data-focused and insight-driven, they need to transform the way they execute their marketing,” he explains. “With the significant increase in marketing tech solutions, it’s becoming easier to prove marketing ROI and demonstrate the direct impact of marketing efforts on pipeline.” The ability to do this, he underlines, is what will give marketing a seat at the table in times of instability – a modern marketer’s role has to go beyond just acquiring leads.

“They must support the entire customer lifecycle and this includes customer success,” he says. “The only way to achieve this is if sales and marketing are aligned.” Marketing should be influencing the conversation the market is having about their product or service, he explains, but the team also has a duty to ensure the buyer remains engaged and successful in achieving their business goals – it’s not just sales’ job to increase customer success or develop brand advocates. “These are all things a B2B company wants and needs to accelerate growth.”

This means a collaborative approach where sales and marketing can come together to discuss how their aligned efforts have impacted the bottom line of the company. “This is extremely powerful in getting their point across to senior leaders,” Jeff explains. “It’s hard for company leadership not to listen to an aligned sales and marketing leadership duo.” When marketing leaders can partner with sales to demonstrate the impact of their work on strategic business objectives, people listen.

Reduce waste with the right data

Sam Carter, CEO at attribution tech business Fospha, agrees joining the dots of marketing activities and working out their precise contribution to revenue is the first step to proving marketing’s standing in a business.

“The lack of transparency in the customer journey creates a lot of wasted spend,” he explains. “Marketers and CEOs know the measurement is incomplete and antiquated with the ‘this must be doing something somewhere’ approach.” Sam says the first step to overcoming this is to identify and get rid of the marketing spend that isn’t driving conversions anywhere. With data and organisational silos across most businesses, this can be a difficult thing to achieve, with many marketers manually pulling data to present a view of how hard they’re working to the business. In times of economic crisis, when headcount is being scrutinised, providing insights to the board is incredibly important.

Sam says the first step for many is the ability to tie CRM data and online activity together, enabling marketers to prove ROI from tools such as Google keywords. Although many can use this to attribute leads as far down the funnel as possible, proving the link to revenue is what matters the most.

“In terms of wasted spend there’s a huge number of activities that drive leads but don’t drive revenue,” Sam says. “If you just tell the board: here’s the activity and here’s the leads, you’re just peanut butter spreading the revenue across all activities.” Using data to identify patterns in marketing activity helps prove ROI at the very least at a channel level, if not at a more detailed.

Sam advocates for a new approach to attribution modelling which will prove marketing’s worth by driving efficiency, enabling decisions to be made faster, driving acquisition and customer retention – something that’s essential if there’s a recession happening. “One of the classic uses of machine learning is a model that assigns partial value to every step in the customer journey, once you’ve joined this together. A human could do this, and it’s not the most exciting bit of tech, but it gives you the ability to move quickly, which is absolutely key to surviving an economic downturn.”

Take control of change

The ability to articulate why performance has changed is also crucial. Although this might not excuse poor outcomes, it can help marketers identify what’s changed and improve on it. “When one of our small B2B customers joined-up their online and offline spend, realised 50% of their spend, which they used on Google Keywords, couldn’t be attributed to any revenue,” Sam explains, by way of example. “Before, that had been invisible because they’d been attributing everything to leads. This is just from shining a light on their activity, before any fancy data science or modelling the fractional value of every data touch point in the journey.”

With more conversations at board level focusing on how hard marketing is working, being able to prove ROI and save budget is imperative. “One of our clients saved 500 days of analytics time last year with just the data we gave them,” says Sam. “That was joining online, offline, web chat and telephone data together.” With many CMOs feeling out of control of decision-making, taking control of data is an important step for marketers to feel empowered in times of crisis, and improving their ability to predict what will happen next.