How to Get Ahead in the Recovery

Like the rest of the world, marketers are divided on the timing of the economic recovery. In ITSMA’s recent Market Pulse survey, the split was literally 50/50, with half of the 50 respondents saying we’ve turned the corner and the other half saying we haven’t yet.

There’s little in marketers’ budget situation to indicate a turnaround. Indeed, the percentage of marketers operating under some budgetary constraints has remained the same since January, at 72%.

But one thing is clear: Marketing budgets can’t sustain continued cuts through 2010. Just 12% expect their budgets to decrease next year compared to 2009. Even in the darkest days of the recession last January, 43% expected their budgets to remain unchanged or to increase in 2009. We think this was less a sign of Pollyannaism than realism. The lean staffs and budgets that have been with us since the dot-com crash don’t have much fat left to cut.

Marketers have made restructuring the marketing organization a consistent priority since January. That tells us that companies are trying to come up with other, more creative ways to deal with the downturn than cutting staff. Here are some ways marketers told us they are dealing with the situation:

• Speed up the move to online. Though marketers told us that they were shifting resources from offline to online in January, it was relatively far down on the list. But this fall 71% said they were making the switch. Spending is increasing in both traditional online activities and Web 2.0 social media.
• Raid budget from other categories. Marketers continue to raid from marcom segments that have been steady victims for years now: public trade shows, collateral, sponsorships of sports/cultural events, and advertising.
• Bet on saving money online. For all the shifts in the overall marcom budget, very few marketers plan to make net new investments in the category. Indeed, just 16% say they plan to increase their overall marcom investment, whereas 52% say they will freeze the budget and 32% say they will make cuts. It’s more evidence that marketers view their increasing investments in social media and digital marketing as cost savers—not just the latest trend.
• Improve your epiphany marketing. We see a real opportunity here. No one expects the recovery—when it arrives—to be a barnburner. Marketers are going to need to focus on the earliest stage of the buying process—the epiphany stage—to attract new prospects with new ideas and help customers reveal better ways of doing things. The pulse survey shows increased spending plans in thought leadership development and dissemination and private events, seminars, and conferences.

Zig While They Zag

The big budget category winners for 2010 will be offering management, sales enablement and support, and business partners/alliances.

But we also want to highlight some areas where we think marketers are cutting budget for the wrong reasons. Here are three opportunities to get ahead of competitors that are cutting:

• Restore market intelligence and research. One of the biggest budget losers in 2010 will be market intelligence and research. This is asking for trouble. It’s hard to figure how marketers plan to get the most out of their increased investments in social media, thought leadership, and private events if they’re cutting back on some of the most important fodder for those programs: unique primary and secondary research. Those who go against the grain and revitalize their market intelligence and insight while others make cuts have a chance to stand apart from competitors.
• Invest in customer reference programs. Marketers in our survey were not planning to make client reference and referral programs a top investment priority. Yet marketers tell us that customer reference programs are the most effective tool in their arsenals for sales enablement—and sales enablement is a top priority for marketers. Those who create category-leading programs will come out ahead in the recovery.
• Form new partnerships. The bottom line here is to gain access to new clients, markets, and capabilities. We’re seeing a big push in partner marketing, with companies forming alliances they wouldn’t have pursued 24 months ago. Many have been around cloud computing, but other nontraditional hookups are happening too, so don’t miss out; some of your competitors are loathe to do it, plus there’s someone to share the marketing expense with!

What are you planning to do to get a jump on the recovery?

For more information on ITSMA’s Market Pulse survey, go here. Companies that participated in the survey can download a free report of the results here.

2 Responses to “How to Get Ahead in the Recovery”

1. David Sroka Says:
   December 11th, 2009 at 12:50 PM

   Marketing and training always seem to take the hardest knocks when the economy turns. We took note of your “Invest in customer reference programs” opportunity. As specialists in the customer reference space, we’ve found that our existing clients continued to increase spending on customer reference management this year, but prospective customers had a harder time getting their initiatives off the ground in 2009. The main culprit was frozen budgets and champions being unprepared to quantify ROI to executives. Confirming the survey results, based on our experience, budget constraints appear to be loosening going into 2010. New business activity has taken a sharp upturn in the past 60 days indicating many businesses are thinking about “How to Get Ahead in the Recovery.”

2. robin hamilton Says:
   December 16th, 2009 at 7:05 AM

   Nice points here Dave. I think a main driver for growth in the recovery was still ‘showing up’ in the recession, as well as demonstrating flexibility and partnership thinking.
   As a customer reference consultant I can only agree with your point re investment in this crucial area, also:
   a) The right intelligence is crucial for making and vindicating informed decisions (especially when budgets remain tight)
   b) It’s good to see some priority given back to the epiphany/awareness stage – kick-starting the process of re-building the sales pipeline when the recent focus has been on chasing a decreasing amount of opportunities.

   Things are certainly looking up for our clients, in Darwinian style those that have adapted the most survived in best shape.

ITSMA specializes in helping companies market and sell services and solutions more effectively. We work with the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA annual program clients include business leaders such as AT&T, Cisco, Deloitte, EMC, Fujitsu, Hewlett-Packard, IBM, Microsoft, SAP, and Tata Consultancy Services, among others. Our comprehensive research, consulting, and training on topics including ITSMA Account-Based Marketing℠, Brand Positioning, and Solutions Development provide the insight and experience companies need to improve business results. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.