4 ways to recession-proof your marketing for growth in 2023
If the economists are right (and usually they are) – there’s a recession afoot. As businesses prepare for the economically turbulent year ahead, turn your focus to marketing and specifically, how it can support growth in the year ahead.
For marketers to achieve the sole purpose of marketing: revenue generation (and yes, brand is a means to get there, too), we put together The CMO’s Guide for Igniting Profitable Growth in 2023. We’ll cover the highlights in this blog series, but you can download the full guide for all-access insights, too.
Without further ado – let’s dive into the highlights of recession-proofing your marketing efforts.
Incrementality is king
It’s not another throwaway buzzword. Incrementality is the principle that marketing spend actually contributed to growth, as in it “incremented” the business in some way. Think return on investment (ROI), but specific to marketing.
Typically marketing teams will focus on attribution – though it often leads to waste. Attribution tools are unable to adequately track the complex, non-linear customer journey and often assign credit to an arbitrary touchpoint (usually the last one). Instead, marketers should funnel funds into the incremental tactics that are most likely to create net new revenue that wouldn’t occur without marketing. Brands can get started by performing classic A/B tests or Matched Market Tests (MMTs).
Dial in your return on effort
Savvy marketers focused on efficiency need to understand the return generated by internal efforts. What projects were completed this quarter? What departments were invested in? What tests were run? What were the business outcomes of those allocations? Identifying the highest ROI on those resources should be a high priority for marketers looking to do more with less.
A simple way to measure the incremental return on effort is to calculate the impacted business outcome (revenue growth over a baseline) divided into expenditure. For example, if a team invested:
- 1,000 hours at an average cost of $50 per house
- That’s $50k of costs (not accounting for non-salary expenses).
If it made a minor impact on revenue, such as $100k, then that’s a 2x return. For some businesses, that can be excellent, and for others, detrimental. Either way, the first step is knowing and holding efforts accountable.
Here are some ways to optimize return on effort (ROE):
- Identify key business problems the organization is trying to solve.
- Align every initiative to produce a very specific solution for those problems.
- Establish clear ownership, roles and responsibilities for each project.
- Track resources and time spent.
- Optimize or cut projects that are predicted to have a low ROE.
Cultivate profit-driven and trackable partnerships
Partnering with non-competing companies that can open doors to new audiences, revenue streams or offer an opportunity to collaborate on content (or even product mashups!) can be hugely effective, especially when resources are tight.
Insider tip: Be sure to track the return. If you hold your partners accountable for generating greater profit (such as efficiency, higher customer value, lower costs with the same service level, or a better service level) — then it’s easier to sell internally. After all, the entire business wants to generate positive cash flow, and what better way than relying on a scalable external resource?
Solving the brand vs. performance conundrum
In a tale as old as time, brand building and performance are often pitted against each other. Yet, they are two sides of the same coin working towards a common goal: to generate a return on investment. While brand marketing can often take months (or even years) to pay dividends, performance marketing can yield an ROI lickety-split.
To recommend a successful split between brand and performance, marketing leaders need to understand the financial goals and burdens of the business. A common split is 60% brand, 40% performance. However, during times of profit emphasis – trimming down brand budgets may be prudent.
It’s a delicate balance. Too much emphasis on performance marketing and businesses may find themselves hung out to dry with stagnant campaigns. This is simply because you don’t have enough people in the awareness phase of the journey, and it requires either time to rebuild organically or an investment in brand marketing.
How can your business drive profitable growth in 2023?
For all-access insights from our playbook, download The CMO’s Guide for Igniting Growth and Profits in 2023.
Interested in growing together? Reach out to get a complimentary marketing appraisal. Or, read up on client success stories like this one with Good American.