Published: 02 July 2020
Analyst(s): Corporate Strategy Research Team
Here’s a roll-up of pandemic-related executive sentiment and insights from thousands of functional leaders across the C-suite.
Fast word on tactics and concerns from thousands participating in our conference calls andpolls.
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Marketing teams are under pressure to quicken the pace of digital adoption, though under much tighter budgetary constraints due to the impacts of COVID-19. Though their methods are changing, almost four-fifths (79%) of CMOs plan to play it safe by focusing their 2021 growth strategy on existing markets. Only one fifth (20%) are looking to enter new territory.
Marketing leaders report their organizations are developing new products in existing markets by:
Forming strategic partnerships with other firms to share the benefits of distribution channels or brand loyalty (36%)
Creating new products to better meet customer needs (32%) or leaning on R&D (32%) to achieve that same goal
Marketing is moving more work in-house in 2020. CMOs report that a third (32%) of work that was previously delivered by external agencies, like social marketing and creative production, is now being delivered by in-house teams.However, there’s little evidence that this has had a positive impact on cutting marketing’s costs as the work transferred is often of lower value.
Looking across marketing’s total costs, almost half of CMOs anticipate mid-year budget cuts due to COVID-19. The consequence of budget reductions has been canceled events, delayed campaign launches and reduced use of contractors. Our CMO survey indicates the most likely areas to cut in 2021 are in event marketing and offline advertising.
They are leaning more heavily on digital channels and developing new products to reach customers:
Nearly eight in 10 CMOs marketing to consumers expect budgets for digital advertising (78%) to increase next year.
Seven in 10 expect increased resourcing of mobile marketing (71%) and website channels (71%).
UCLA Health reallocated budget and staff to accelerate the development of an AI chatbot. It went live on 12 March on the health system’s website and was originally conceived as a tool to help customers find doctors, locations and make appointments. When COVID-19 struck, marketing put together a chatbot team to work with its vendor to answer a torrent of COVID-19 questions coming to UCLA Health from all around the country. Usage peaked at around 500 inquiries a day without any promotion.
Chief of Marketing Tanya Andreadis says it’s now interacting beyond COVID-19 questions. ”Now there is organizational momentum to continue to invest and make it even better. It is quickly becoming a part of operations in a way we did not expect.”
The team began by including answers to 50 initial questions and gradually expanded its capabilities, based on patient needs by:
Prioritizing answers based on frequently asked questions and updating daily
Identifying other opportunities to use the tool, such as handling billing questions
Soliciting feedback from patients via the chatbot to guide the marketing team
“One of the most fundamental things for us to focus on instead of getting new patients or retaining them is building trust. This tool has offered easy to access, expert validated information that helps people understand COVID-19, and more. Its instant adoption is an indication that people are looking to us as an authority — and when we deliver — we build trust,” says Andreadis.
A quarter of sales executives say they are now considering a permanent shift to virtual selling, in contrast to just one in 10 back in March.
Those who said they don’t anticipate a permanent move to virtual have slid from 62% in March to 42% in June.
What’s remained consistent during this period: About one-third remain unsure about what the future holds.
For traditional sales events companies are either adopting a wait-and-see approach or going all-in on virtual alternatives. Those dedicating resources and efforts to high quality virtual events tell us that it’s raising attendance, increasing seniority, and generating better lead quality than traditional live events.
Sales leaders say buyers are more inhibited because of the loss of human elements like informal meetups, body language and side discussions — all material factors in the customer’s decision-making process.
Strategies to overcome those challenges include:
Simplifying sales decks to the most critical messages to avoid lengthy virtual meetings
Establishing detailed agendas that allow customer stakeholders and supplier experts to join “as needed”
Breaking up the traditional sales process into more manageable steps, and shortening virtual meetings
Reserving time on virtual platforms for customers to have their own private discussions by ending calls 15 minutes early
Recruiting sellers who are comfortable engaging customers with an authentic and trust-building conversation in a virtual setting
On the product development side, R&D leaders are also uncertain about how their innovations will meet changing customer needs (59%). They are less concerned about practical issues, including budgets and staffing (18%), their role in the company (13%) and meeting regulatory requirements (10%).
R&D leaders are developing new strategies to respond rapidly, including:
Running remote “co-innovation and discovery sessions” with customers to refine innovation ideas by understanding how to tailor new products to meet their underlying needs
Adding product and market research experts to their R&D teams
CIOs see their priorities evolving too, with over three quarters (77%) saying that changing the overall culture of IT has risen on their agenda. They want to:
Make sure the IT pipeline is aligned with business priorities (61%).
Provide a technology platform that allows their company to navigate change (59%).
Get business leaders to take more ownership of what they might consider “IT projects” (45%).
Compiled by Steve Shapiro
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