New Forrester B-to-C Data Guides Recession Budget Planning

Businesses today face considerable systemic risks, from economic uncertainty to continued war in Ukraine. According to J.P. Morgan Chase’s 2022 Business Leaders Outlook Pulse Survey, just one in five business leaders are optimistic about the national economy for the year ahead, the lowest percentage in 12 years of survey data. Companies are facing labor shortages, supply chain issues and a generally higher cost of business. These factors, along with reports of widespread layoffs in the tech sector and softness in Meta’s and Google’s ad business, are causing b-to-c marketing leaders to think about adjusting their 2023 budgets. Consumers are also pulling back on their spending. On average, four in 10 consumers anticipate spending less on specific nice-to-have categories: travel, cosmetics and fitness. However, consumer concern about these systemic risks varies depending on demographics. Our data shows that younger consumers are less sensitive to and less prepared for economic uncertainty than older consumers. 40% of U.S. Gen Z consumers believe that fears about the recession are greatly exaggerated, compared to 24% of U.S. Gen X consumers. And only 35% of U.S. Gen Z consumers are confident about how to manage finances in an economic downturn, compared to 49% of U.S. Gen X consumers. But let’s consider the fact that companies have survived, and thrived even, during massive disruption. Marketing leaders can and must continue their growth strategies by balancing value for the brand and value for the customer. Navigate your way through uncertainty by fixating your compass on the customer. It’s ‘Return to Anxiety’ for B-to-B CMOs’ 2023 Planning Season Invest in an authentic, customer-first strategy Recent Forrester data shows 52% plan to significantly increase their marketing budget. But before shifting to quick, easy-to-track paid media or marketing programs, remember this: Consumers are grappling with their own uncertainty. It’s best to invest in authentic content that shows your brand as empathetic to customers’ needs and values. This includes investing in technology to facilitate better customer interactions and paid media programs where you can create a cohesive customer message and track performance. Cut activity and assets that don’t deliver value If your marketing strategy today consists mostly of mass-reach tactics, over-tracking consumer behaviors and over-investment in third-party data sources, you will struggle to build deep connections with your customers. Prune any spend that doesn’t drive value for the customer. For example, cut budgets from third-tier publishers and break up with data brokers that rely on third-party tracking pixels. Experiment responsibly Now’s not the time to cut back on well-thought-through experiments. Test emerging media sources and content creations on new platforms, such as TikTok, to find new ways to inspire and understand your customers. Iterate rapidly to stay in front of changing customer needs. Testing will open the doors to new customers, identify unmet product needs and pinpoint those pesky service and experience roadblocks. Instead of taking a red pen to your marketing budget, expand your view on how your marketing initiatives can drive incremental value for the business. Firms that create value for customers get business value in return, so keep your mindset on the customer and on delivering four types of value for them: Economic value, by helping customers save money.Functional value, by increasing usefulness and reliability.Experiential value, by facilitating pleasant and helpful interactions.Symbolic value that creates meaning for the customer in relation to others. For example, companies like Kraft Heinz show their economic value to customers by advertising its cheese as part of a grilled cheese meal to demonstrate savings from not eating out. And Penske demonstrates experiential value by promoting personal connections between customers and facility managers because the company determined that connections are the real driver for customer loyalty. Majority of Advertisers Likely to Retain Media Spend Levels During Expected Economic Recession Now is not the time to put your marketing or your business on autopilot. Brands that are thoughtful, customer-first and authentic will navigate steadily through this period of volatility. One thing is for sure: Your brand will still experience turbulence as we head into uncertain economic times and major disruption in the advertising ecosystem, but if you balance value for the brand and value for the customer, you will still achieve long-term brand growth.

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Build a Sustainable 2023 Marketing Plan and Stick to It

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Tina Moffett

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Tina Moffett