Why CMOs Should Embrace Marketing Risk in 2021

February 15, 2021
Contributor: Kelly Blum

CMOs must balance marketing risk and opportunity to set the right strategic priorities in the year ahead.

Marketing leaders learned in 2020 to embrace agility and be ready for anything. As business uncertainty continues, it’s no wonder that chief marketing officers (CMOs) want to fall back on the tried and true, and forge ahead with low-risk marketing strategies.

The Gartner CMO Strategic Priorities Survey 2021 shows that 73% of CMOs expect to rely on existing customers to fuel growth in 2021 rather than look to develop new markets. Of these CMOs, 39% plan to increase sales of existing products to existing customers, while 34% will introduce new products to those same customers in 2021.

This low-risk approach may be understandable given the tumultuous year of 2020, but it is at odds with CMOs’ own ambitions to reinvent and rescale key strategies developed over the course of the past year.

“CMOs must take care to ensure that their own strategic approach is matched to the enterprise’s aspirations.”

“Focusing on existing customers benefits CMOs by being low-cost and low-risk,” says Jay Wilson, VP Analyst, Gartner. “But low risk is matched by relatively low return. At the same time, we see CMOs being overly ambitious about the change they expect to bring to how their organizations interact with customers. CMOs must take care to ensure that their own strategic approach is matched to the enterprise’s aspirations.”

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Reinvent marketing strategies with care

Gartner explored 11 key marketing strategies that would be rescaled to accelerate new growth, reinvented to be better positioned postpandemic, returned to prepandemic levels, reduced lower than prepandemic levels or retired because they are no longer sustainable. Half of the respondents intend to rescale or reinvent six of the 11 strategies, while nearly one-third (31.8%) plan to rescale or reinvent eight strategies.

Reinventing key strategies may seem like the best approach for a postpandemic return to growth, but CMOs must do so with care. 

“CMOs cannot reinvent and rescale everything while still executing effectively and remaining agile in a year that promises more challenges,” says Augie Ray, VP Analyst, Gartner. “Those who attempt to reinvent too much simultaneously risk failing to do any one thing right while overburdening their teams.” 

The most effective approach is a moderate one that avoids reinventing the wheel. For every strategy you rescale, choose another to reduce or retire. For every strategy you try to reinvent, return another to a prepandemic level and approach.

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To realize the greatest returns in 2021, CMOs should consider these actions: 

1. Be ruthlessly selective

CMOs must prioritize what they choose to reinvent, rescale, reduce, retire or merely return to prepandemic levels. It is critical to focus on the efforts that are most essential in the short term, most aligned with organizational growth strategies for 2021, and best suited to the organization’s capabilities and resources. Any other initiatives should be delayed, deprioritized or delegated.

2. Ensure proper documentation and support

Make sure that every decision to reinvent or otherwise modify strategies are properly documented for other stakeholders. This will reassure the rest of management that marketing’s priorities are focused on the initiatives with the highest returns. 

3. Focus on scenario planning 

CMOs will need to make tough trade-offs today. But they should also be prepared to make quick changes. Institute formal scenario planning to support a constant and agile cycle of iterative adjustments throughout 2021 as economic conditions warrant. 

Last year’s optimism that budgetary contractions would be short-lived looks to be quite tempered as we kick off the new year. As uncertainty and economic turmoil persist, CMOs must be careful to not fall victim to the “do more with less” mindset.

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