2021 Predictions for a Year of Recovery
The word prediction should have quotes around it, as we enter an uncertain time for both businesses and consumers. With early vaccine successes, the world could be returning to normal sooner than initially anticipated. However, the economy will still lag as we continue to recover from last year’s pandemic-induced recession.
For CMOs—many of whom have faced budget cuts and added responsibilities since before the coronavirus hit—navigating 2021’s economic maze will be a challenge. That said, there are reasons for optimism, especially for those CMOs ready to focus obsessively on customer experience, retention, and loyalty this year.
Research from Dentsu, McKinsey, and Forrester found that, in the years that followed the 2008 financial crisis, organizations that focused on customer experience and client loyalty delivered 3x higher returns than those brands that focused on new acquisitions. The consultant groups all agreed that a similar approach to the current economic crisis will be the most effective path forward this year.
It would appear that many CMOs are taking lessons from the previous decade’s recovery. A recent Gartner report found that 39% of CMOs are focused on selling current products to existing customers while 34% are selling new products to existing customers. The modest approach to recovery—with only 26% of marketing executives committed to an acquisition-first strategy—places outsized importance on customer experience (CX) and existing data. Technology and the partnership between marketing and IT will be instrumental this year as many B2C brands focus on mobile applications and loyalty programs to foster and maintain enthusiastic supporters.
Marketing Strategies in the Post-Covid Era
In Dentsu’s CMO survey late last year, they identified “understanding changing consumer behaviors” as the main priority for many executives this year. With considerable uncertainty still on the horizon, there are too many unanswered questions regarding how consumers will shop, what they’ll shop for, and when hard-hit industries such as travel and hospitality will recover.
One thing is apparent, though. No matter how consumers act in 2021, they’ll expect a high level of customer experience. While Dentsu found that CX will ultimately fall heavy on the shoulders of CMOs, they also recognized that the long-term results are worth it. Dentsu identified what they refer to as the “prepared CMOs,” those executives that see beyond short-term business objectives in favor of long-term, CX and digital adoption strategies. Developing customer experiences and leading digital innovation are the top two priorities for the prepared CMO.
So far, this article adds up to a contradiction. How do CMOs build a conservative retention strategy during a recession while consumer behavior is unpredictable and CX innovation is essential? There’s no easy answer here, but many organizations will ride the coattails of customer data and technology to guide their decision-making this year.
Build a CX-Oriented Martech Stack
CX overhauls require patience and alignment between leadership, strategy, and technology. Forrester’s recent report on martech stacks confirms that technology is a leading driver of CX innovation, emphasizing the need for organizations to “align future technology buying to people-first marketing goals.” When CMOs evaluate their yearly martech spend, they should always ask how data, utilization, and implementation help build better relationships with consumers and advance the partnership between brands and their customers.
The report goes on to state that data utilization is one of the highest priorities for marketing decision-makers this year. Your organization may have consumer data collected by disparate systems, but those metrics may not come together to tell the consumer journey or build effective personalization. For example, CMOs should evaluate how their CRM platform, their email service provider, their mobile application, and possibly their loyalty program all tell a story collectively—or whether they’re able to communicate effectively enough to build a narrative in the first place.
Technology also fuels operational efficiency, as long as your tech stack, your data, and your marketing plan align. Forrester noted that 31% of CMOs want to improve operational efficiencies in 2021 and 29% want to improve their use of data and analytics. Both goals can be achieved with the right martech stack and an innovative approach to personalization that tells a data-driven story.
Individualize your Retention and Loyalty Plans
Customer experience and martech innovation are the tools to a successful marketing strategy, but who you’re targeting is as important as how you’re reaching them. In Forrester’s martech stack report, the firm emphasized the need to engage, reward, and foster loyal customers, or what the consulting firm labels “devotees.”
Devotees are a brand’s most ardent and steadfast customers, who have stayed true to a company through thick and thin. They spend 50 to 200% more than an average customer and are 99% likely to recommend the favorite brand to new customers. During an economic recovery, CMOs should rely heavily on a marketing strategy that puts devotees at the top of the food chain.
Devotees expect a unique, individualized experience, which is difficult for brands to accomplish in the Covid-era. Even after recovery, most of the customer journey will exist online. Brands must integrate personalization (across mobile and email), loyalty programs, and consumer data into their 2021 marketing and CX plans.
If “daunting” is the first word that comes to mind, you’re not alone. While CMOs will take on more in 2021 than they did even during the pandemic, CX innovations and advances in martech data integration make even the loftiest goals more attainable. Trust your team, trust your martech stack, and trust your consumers. Focus your strategy on retention, personalization, and customer experience, and 2021 could be the year of smashing expectations.
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