According to Forbes Business Council, 68% of consumers believe we are already in a recession. There’s no doubt that inflation and higher interest rates will greatly influence consumer buying behavior in 2023. Many companies will take a hard look at investments in brand building as a potential expense reduction strategy.
However, results from past recessions clearly show that companies that continue to invest in brand marketing tend to recover faster and, in many cases, increase market share. A recent study of B2B marketing leaders shows that two-thirds are planning to maintain or increase marketing spending in brands over the next six months. And to protect and increase budgets, 90% of these leaders know they have to improve the CFO’s understanding of marketing ROI.*
Clearly demonstrating brand value with consumers is critical. Gartner found that more than half of consumers are likely to switch to an unfamiliar brand after experiencing a single meaningful experience on a digital or nondigital channel. If you manage an established brand, now is not a time to rest on laurels since Gartner’s 2022 Activation Survey** tells us that:
- 75% of audiences have searched online for information about a previously unfamiliar brand while shopping;
- 53% say it is less important to choose a well-known brand today than it was three years ago
In 2023, slashing the investment needed to sustain a brand’s presence with key customers is a risky option. At the same time, the effectiveness of spending will be scrutinized more than ever by CEOs and CFOs. Now is when marketing leaders must demonstrate (digitally and in other forms of in-market research) that spending is yielding more positive experiences, more satisfied customers, greater revenue and profits, and greater customer lifetime value.***
How does the CMO best demonstrate brand investment value? Well, in 2022, almost half (42%) of all audiences found their most meaningful brand experiences in digital channels followed by in-person (29%) and product/service (24%). Assuming these sources of brand experience continue, brand value delivery in digital channels throughout the customer journey is critical.
Personalization of shopping capabilities also is essential if brands are to break through the noise and stay top of mind. Customers want to feel seen by the brands they choose to use. It will require using customer data to deliver a tailored “personal” interaction via customized content, staying connected along the purchase journey, and providing virtual sales assistance, real-time inventory management and customer portals. Bottom line, consumers want the path to purchase to be easy, directed, and reassuring.
This year CMOs will be expected to deliver performance and growth despite the anticipated economic downturn. This means they must lead a high-performing team capable of delivering exceptional brand value experiences. And these experiences must be designed to quickly and effectively address customer challenges and concerns. Research shows that customers are two and a half times more likely to stick with a brand when issues are resolved quickly.
Marketing in an economic downturn is never easy. The Bloodhound Group can help. Our team of consultants can effectively map out the customer experience, identify potential experience gaps and create attribution tracking to gain insights required to optimize real-time brand investments. We would be honored to join your marketing team. Contact us today!
*Performance Marketing World, November 22, 2022 reporting LinkedIn Research.
**2022 Garner Brand Activation Survey
***The Gartner 2023 CMO Leadership Vision Webinar
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