In the transition to a post-recession economy, companies face a huge challenge: selling products to weary (and wary) consumers whose buying patterns have been altered -- and perhaps forever changed -- by the economic downturn.
But the equation for CMOs and their agencies is actually more complicatied than that. The focus on corporate budget cuts has changed to a demand for sales growth, and to achieve that goal, marketers must transform their communications to address consumer mind-set shifts, often with flat or declining budgets.
In fact, "expectations for marketing have never been higher" at a time when "the challenges have never been greater," according to a new Accenture survey of global marketers.
The majority of those marketers -- eight out of 10 -- said they expect to see either little to no growth in their budgets or an actual decline. That squeeze comes at a time when marketing organizations must transform themselves to target changed consumers.
Accenture concluded that customers have been affected in "substantial and lasting ways" and about three in five execs believe the marketing function will "fundamentally change during the next five years" because of the battering consumers have taken in the economic downturn.
The most lasting impact will be on customers' expectations for product quality, value, price and customer service, Accenture said.
"Marketers must meet today's challenges with laser-focused precision that is guided by insights from robust customer analytics capabilities that inform decisions about who they should target through what channels and with which messages," said Dave Rich, managing director of Accenture Customer Relationship Management and Accenture Analytics. "Investing in these capabilities will enable marketers to move to a much more focused approach that will increase effectiveness, support more streamlined programs and free up cash that can be reinvested smartly to help fuel growth."
A large percentage of marketers surveyed also took their lumps, of course. In the past 12 months, 45 percent showed flat to little growth in share and an additional 23 percent reported a decline. More than a third, 37 percent, experienced flat to little growth in sales revenue while 29 percent registered a decline. Still, those execs think the economy has in the very least bottomed out, with about six in ten expecting to grow market shares and sales in the coming fiscal year.
To do so, marketers cited as their three most important business issues: improving customer retention and loyalty, acquiring new customers and increasing sales to current customers.
Marketers can expect to face unprecedented challenges in selling to those people. Accenture's research presents a snapshot of consumers who expect to spend less and get more, want their interactions with providers to be efficient and convenient, are increasingly diverse and are harder to reach and keep. Nearly one-quarter of respondents said that acquiring new customers -- which was cited by 78 percent as very important to their company's success -- is much more difficult to do now. An overwhelming majority of those marketers, seven in ten, said three of the biggest changes in consumer mind-set -- expectations for more value for their money, higher assumptions of product quality and a higher standard of customer service -- are "likely to be longer-term or lasting changes."
With tight budgets, marketers are looking for new efficiencies and profitable growth. Respondents said that their greatest increase in focus and investment are: developing innovative offerings, entering new markets or segments, building brand image, improving pricing and developing customer data management systems.
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