More than half (57%) of CMOs expect to see a return to business as usual in the next 18-24 months according to a recent report [download page] from Gartner. The latest Annual CMO Spend Survey indicates that marketing leaders are maintaining a positive outlook on recovery, but are feeling risk-averse and expecting budget constraints.
Approaching New Markets With Caution
When it comes to fueling growth into 2021, the more than 400 CMOs surveyed are generally sticking with what they know. More than one-third (34%) say their primary strategy will be increasing sales of existing products to an existing market, and a plurality (45%) are planning on introducing new products to an existing market. Far fewer are looking to enter a new market with an existing product (14%) or with new products (6%).
At a time when organizations seem keen to play on existing strengths, CMOs have several strategies lined up in their approach to product development. Some are planning on strategic partnerships with other firms to gain access to each partner’s distribution channels or brand, while others plan to create a new product that better meets the needs of the existing market, and others still to invest in R&D to develop new products that cater to the existing market.
Back to Business As Usual?
The majority (57%) of CMOs are feeling positive about the impact the current economic and business climate will have on their company’s ability to meet goals, claiming that they expect a return to business as usual in the next 18 to 24 months. Some 37% even think that they could see a significant positive impact in that time frame, and just 5% expect to see a significant negative impact.
That being said, some CMOs expect to be working with constrained budgets in their attempts to fuel growth. About 1 in 3 (34%) think that the impact of the current climate will bring about a moderately decreased budget (by 5% to 15%) from their original plan, and a further 11% think it could cause their budget to significantly decrease (by 15%+). Even so, about one-third (34%) expect their budgets to increase to some level, and 1 in 5 (22%) think there will be no change or a slight change.
A Low Tolerance For Risk
Considering the crisis that has overcome the professional world for the past few months, it’s no wonder that CMOs appear to be taking a risk-averse position. Unfortunately, the risk-tolerance approach favored by the largest share of respondents, seeking to conserve the status quo, is one of the least likely to be allowed for by the wider enterprise.
Taking risks within certain limited barriers is an approach largely agreed upon by CMOs and broader enterprises. And, operating within a basecamp of certainty, but being prepared to allocate a proportion of budgets to experimenting with new ways of working, is less popular but still agreed upon to a similar extent by CMOs and the broader enterprise.
Having a low appetite for risk is becoming a noticeable trend in responses to the current climate among CMOs and leaders in general – in-house marketers are reconnecting with old customers/clients, according to S2 Research, and The CMO Survey found that CMOs are focusing on brand-building and retention over acquisition.
Read more about CMOs’ strategic priorities in the full report here.
About the Data: Based on a survey of 432 marketing leaders in North America, the UK, France and Germany at companies with $500 million to $20 billion+ in annual revenue.