Four Ways CMOs Can Deliver on the Growth Agenda in Uncertain Times - McKinsey

Consumer spending has been significantly impacted in recent months, as chief marketing officers and chief growth officers wrestle with the portfolio and marketing implications of this shift.

Given the current economic uncertainty, many of them are already scenario planning and building up their resilience muscles. They’re also asking key questions to prepare for an unclear future, including:

• How do I drive growth in an uncertain and volatile landscape?
• How and where can I optimize my marketing spend?
• How can I create better consumer experiences?
• How do I redefine the brand to engage all stakeholders and rally the organization to accelerate our growth journey?

The pandemic ushered in a period of unprecedented economic turmoil across the globe. But marketing leaders can learn from the past to chart a new course forward, gleaning insights from the Great Recession of 2007-2009 to implement some of the key lessons learned:

1. Growth preservation: Focus on preserving and growing market share, protecting against challenger brands by maintaining consumer connection.
    
2. Rapid adaptability: Adjust channel focus as ever-changing consumer sentiment forces organizations to accelerate planning cycles and rethink both investment strategies and offerings.
    
3. Precise & proactive:Be surgical about creating new efficiencies to fund growth.
    
4. Protect the brand: Stay top-of-mind for customers throughout the recession to come out on top when it’s over.

Focusing on these areas can provide CMOs with a comprehensive plan to help ensure sustained innovation and long-term growth.

Growth preservation

CMOs should focus on finding the most efficient and effective place to put their next marketing dollar. Close collaboration with strategy and operations, combined with real-time inventory analysis, pricing optimization, and near real-time media feeds can help ensure marketers invest in brands or products most in need of growth. Key questions for CMOs to address include:

• Which products do I need to generate demand for?
   
• Where am I playing defense instead of offense?
   
• Which channels (online versus in-store) are performing best, and how do I support them with the marketing budget?

Rapid adaptability

The pandemic taught marketers the importance of adaptability, a lesson that should remain relevant as the macro-economic situation changes. The annual planning season should include multiple scenarios instead of a deterministic approach. And let’s be clear, the single planning cycle is extinct. Planning and replanning should ensure flexibility, adaptability, and maximum efficiency and effectiveness.

By preparing ahead of time with a playbook they can deploy under each scenario and sharing the volume/sales implications of each with other stakeholders, CMOs will likely be able to act much faster in the future. An agile operating model within marketing ought to enable these types of quick-reaction pivots based on real-time marketing performance. Key questions for CMOs to address include:

• What are the early warning signs to look for in each scenario?
   
• What are the key priorities to drive in each scenario?
   
• What operating model should I use to shift media dollars and strategy in real-time? And where will I use an agile model to deploy some opportunities using set-aside funds?

Precise and proactive
It should come as no surprise to most CMOs when they are inevitably asked to achieve efficiencies during a downturn while still delivering revenue growth. CMOs should take both a holistic and granular view across marketing spend to identify opportunities for the redeployment of funds to stimulate growth.

Start by assessing the big picture across all consumer-facing investments, with an eye to the portfolio strategy. This may also require an agile operating model that allows for quick redeployment and shift of marketing spend, making data-driven decisions in near real-time. Key questions for CMOs to address include:

• Do I have full transparency into where the spend is going? What is our marketing “source of truth?”
   
• Am I constantly challenging my team to move dollars, leveraging dynamic creative optimization (DCO), and strategically targeting and personalizing communications to deliver efficiency?
   
• Am I having an ongoing dialogue with the CFO and my C-suite peers to unify the organization around the new growth agenda on the impact of marketing dollars?

Protect the brand
The last CMO task to build resilience involves combining key learnings from portfolio strategy, the current scenario playbook, and spend efficiency to update their media strategies. This may be a tempting moment to divert more media dollars towards channels and tactics that lend themselves to agility and measurability (e.g., digital, retail media networks).

Consumer analytics, marketing return on investment (MROI) and measurement will help improve precision targeting and marketing’s impact on growth throughout periods of uncertainty. However, as mentioned above, that does not mean brand spending should be slashed. In the Great Recession, brands that continued to invest at the top of the funnel emerged stronger than those that did not. Key questions for CMOs to address include:

• What new and emerging channels should I be considering (e.g. retail media networks)?
   
• How do I most effectively blend MMM (marketing mix modeling) with incrementality testing?
   
• What aspects of my immediate data and analytics do we want to own (versus an agency or our agency) to activate at speed and scale?

History shows that resilient companies are much more likely to succeed, especially during a crisis. Rather than retreat or cut spending, CMO’s should bear these four strategies in mind to help remain drivers of future performance for their organizations.

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