CMO Focus: Five Trends to Watch in 2023
Expect marketers to navigate economic upheaval and changing customer preferences by leaning into new approaches.
Chief marketing officers are looking to the year ahead with caution as the story of the economy plays out through 2023. While growing economic uncertainty means almost nothing will be predictable, it also creates opportunities for leaders to shine by doing more with less and leaning heavily into creativity and innovation. On the one hand, CMOs feel pressured to keep in step. They want to move faster and are looking for ways to add speed and tactical agility. But they’re moving more thoughtfully, too. They want to deepen their connections with people at a time when consumers are more conscious about their spending. Importantly, they feel well equipped “to go into battle” as they can lean back on lessons learned from the beginning of the pandemic.
While building a strong brand is always critical, it becomes more important during economic downturns. When presented with brand choices, consumers are more likely to stick with brands they know and trust–even when given lower-priced options. So CMOs are questioning which moves will best strengthen trust with their existing customer base while finding ways to resonate with more consumers.
In the coming year, we expect CMOs to:
1. Flex Into Expanded Roles
Their titles haven’t changed, but marketers recognize that their sphere of influence is shifting. The marketing function is no longer just responsible for using marketing to deliver value to the organization. They must prove and demonstrate how while taking on more ownership of the growth agenda. That includes uncovering new pockets of growth and figuring out new audiences and opportunities.
As board-level expectations rise about marketing’s ability to prove its value, CMOs become integrators. They are bringing together different functions, from sales to product to ESG. This expanded responsibility for growth means moving beyond marketing key performance indicators to commercial KPIs, substantiating their impact on growth.
And that means marketers must embrace a different language, leaving marketing jargon behind as they translate everything they do into the lexicon of business value.
2. Refocus on Existing Customers Through Their Post-Purchase Journeys
In times of economic uncertainty, companies should shore up their customer base, exploring new ways to drive loyalty. In lean times, brands must find ways to build trust and stay top-of-mind. Creating better customer experiences is a sure bet.
The more companies invest in customer experience, the more they learn how to improve it. That means they’re making sure CX is brand-led, differentiated and personalized. The shift comes from seeing CX less as a defensive exercise and more as a positive relationship builder. It’s a way to expand the brand definition, bringing customers closer to its purpose. It creates more meaningfully engaged communities that act as stores of value during challenging economic times and sources of advocacy when conditions improve.
Only data can inform that level of intimacy, so CMOs are becoming more outspoken about ineffective corporate data strategies. They’re learning that an overabundance of data often means they can’t thread the needle. And they’re constantly re-evaluating the role analytics play in the marketing organization, aligning marketing technology to produce more meaningful insights.
It’s not just about having the right data. It’s also about having the right talent and teams in place to support the shifting needs of the business. We expect CMOs to continue to prioritize adding insight and experienced professionals who know how to ask the right questions of data and uncover insights that drive growth.
3. Hold the Line on Brand Versus Performance Marketing Budgets
The mix matters. And it requires extra attention in bumpy economies. Many companies are already slipping into fear-based budgeting, tipping into demand marketing at the expense of brand initiatives. It’s easy to do so at a moment when the rest of the C-suite is begging for quick results.
But it’s also a mistake. And the most effective CMOs will make a case for sticking to the 60/40 rule, even as they find better ways to integrate brand as a growth engine.
And they’ll increase efforts in key areas:
- Experimentation: Under budgetary pressure, it’s tempting to back away from unproven channels. Those that continue to test and learn will see the best long-term growth results versus relying solely on quickly outdated benchmarks. But with the stepped-up scrutiny on budgets, experimentation should be agile. It’s okay to redeploy resources if the tests aren’t delivering results.
- Channel Strategy: Social media is changing so fast that it requires teams to constantly refine goals and tactics. As TikTok becomes mainstream, Twitter (and new competition) evolves, YouTube gains clout and the metaverse beckons, brands need to constantly chart new directions. Few brands can–or should–be everywhere. But they all need to know how and why their customers use social.
- Reporting: Tracking and socializing results should be done through business outcomes, not marketing metrics. This makes it more possible to connect brand and demand performance. No one in the board room wants to hear about clicks. The point of reporting is to evaluate past performance and make better, more effective strategic decisions for future efforts, getting the most out of limited resources.
4. Welcome More ESG Moves into the Marketing Tent
As governments, investors, employees and customers demand more accountability, environmental, social and governance policies are under the microscope–and their weaknesses are showing. Marketers can and should take on more, addressing the many ways ESG issues directly impact brand value. More CMOs are putting sustainability commitments and public announcements on the front of bottles, addressing it in packaging and formulation.
They’re becoming more aware of how vulnerable brands are to greenwashing claims. That means focusing on the key proof points needed to substantiate ESG efforts.
But most importantly, CMOs recognize that ESG has become a customer preference and a strong one. People want companies to make less harmful products and to behave responsibly. It’s no longer possible to think that only subsets of consumers care about the planet or labor practices. It’s a trend that will only intensify.
We’ll see more businesses realize that ESG shouldn’t be thought of as a single set of initiatives. It’s a commitment a company makes, which then translates into many facets of operation and consumer engagement.
5. Rewrite Their Personal Purpose
Many CMOs are facing a significant amount of internal and external headwinds which can lead to a sense of frustration by not being able to deliver the impact they’re looking to achieve. While their creative energy and strategic skills may have propelled them to the top job, the harsh challenges of the last few years have sucked much of the fun out of their careers. Bludgeoned by the Great Resignation, skirmishes over hybrid work policies, positions that seem unfillable and looming economic storm clouds, many feel more like survivors than visionaries. They have less freedom to be creative. And motivating teams while managing department-wide burnout takes much more of their time than it once did.
While the last few years may have presented a number of challenges, there’s ample opportunity to start taking their purpose-branding lessons to heart and redefining their career goals. Expect to see CMOs applying the lessons from tough times to dig deeper for motivation and find new ways to reignite their passion for marketing. Their goal is to transform resilience from a corporate buzzword to a personal mantra.
We’re not surprised that the average CMO tenure hovers at 40 months, the lowest in a decade. Periods of constraint are inherently more demanding than growth spurts, and CMOs have to do more with less. But cutbacks also fuel innovation. We expect to see CMOs build trust with customers by leaning into personalization. They’ll find new ways to collaborate, forming creative partnerships that span silos. They’ll enrich their brands with thoughtful experimentation. And in doing so, they’ll unlock uncommon growth–even in a recession.