Unless you're in the booming online grocery business (here's looking at you, Target and Walmart), package delivery industry (and at you, parcel delivery firm DPD) or disposable gloves market (up 670% in March over the previous year), chances are your pre-pandemic marketing budget has found itself in the crosshairs of your traumatised CFO. As aForrester analyst writes, "The current COVID-19 crisis has upended CMO priorities and budgets, leaving many scrambling for alternate revenue sources and all asking, 'What in the world do I plan for now?'"
One option, of course, is to let your CFO have at it and cut your marketing budget to the bone. An Influencer Marketing Hubsurvey of 237 brands conducted in late March suggests many executive teams are doing just that, with almost 70% of companies reporting that they expect to decrease their ad spend in 2020, and 65% pointing to a drop in revenue for the month.
But in the midst of all those grim survey marketing and sales numbers, the following stands out: "One in four companies are set to increase their marketing activities and 41% intend to make use of the momentum to maintain or increase their presence in the media."
It is a statistic the Forrester analyst would cheer, given her advice not to stop marketing. "Definitely revise pre-crisis products, placements or prices in order to create the value customers need now," she writes. "But study after study shows that going dark with marketing altogether hurts your chances of recovering well out of an economic downturn."
One study in particular backs up this stance. AMcGraw-Hill Research analysis of 600 companies from 1980 to 1985, which "found that the businesses that chose to maintain or raise their marketing expenditures during the 1981 and 1982 recession hadsignificantly higher sales after the economy recovered." And the "companies that marketed aggressively during the recession had 256% higher sales than those that did not continue to market."
Some of your executives could be a tough sell, though, and might still be gunning for marketing and other departments. So, how can you cut costs but maintain your ability to market as needed, meet customer needs and increase sales?
What eats a marketing budget? Call centres, costly customer service failures and more.
A great place to start is your call centre operation, which as an industry has beenstretched to the breaking point since the pandemic struck. With calls to centres up dramatically — companies in certain industries have seencustomer service requests spike by as much as 133% since the end of February, withhold times and escalations rising concurrently — frustrated consumers are descending on brand websites and other customer support channels for answers to their questions. And when you consider that the average cost of a customer support call is almost $5, it makes sense to beef up those channels to accommodate them, by elevating the quality and access to online self-service sources such as website FAQs, help centres and search engines, all of which have seen a burst of activity in recent months. In fact, our research reveals that Yext Answers customers experienced an almost 90% jump in on-site searches between February and April.
The conclusion? Your customers are asking questions and they need you. Allocating your marketing spend towards solutions that help you deliver official answers quickly and seamlessly is a smart bet. It will help you boost customer acquisition and retention, which in turn cuts costs. Think of it this way: a great customer experience on your website helps you keep customers coming back because68% of people would not return to a site that provided a poor search experience. That's important becauseit costs five times as much to acquire a new customer as it does to retain an existing one, so we're talking a big chunk of change.
That chunk of change goes the other way, too — there are tremendous cost savings that come from a positive customer experience. A Harvard Business Review article shows thatcustomers who enjoy positive experiences spend 140% more than customers who report negative experiences. The article also points to the finding that "Delivering great experiences actually reduces the cost to serve customers from what it was previously" — the opposite of what many believe. Sprint, the authors note, has reported that placing increased value on good customer experience enabled it to reduce customer care costs by up to 33%.
Yet another result of increased focus on customer experience? A better reputation. Happier, more satisfied customers won't grumble about you to friends and family — or online in the form of negative reviews. Eliminating negative reviews is critical, since as Inc. notes, "It takes roughly40 positive customer experiences to undo the damage of a single negative review." Compare that to the outcome of positive reviews, which result in increased sales, according to Zendesk. (Zendesk also reminds us that88% of customers read an online review that influenced their buying decision.)
In short, writesInc., "Good reviews amp up your brand's reputation without any additional work on your end."
Less work, reduced costs, increased sales… In a time when no plan seems like a certain right move, pressing harder on digital customer experiences — which, yes, does overlap with marketing efforts — feels as close to a sure thing as it gets.