MARKETING: from budget constraints to strategic profit drivers
As I read through the Gartner Q3 2024 CMO Journal, it became clear to me that we are facing a pivotal moment in marketing.
The challenges are multifaceted, with drastic budget cuts and issues in the customer experience (UX) and experience management (XM) journeys coming to the forefront.
These issues are not just about numbers; they expose deeper, systemic problems that need to be addressed.
Budget cuts: A wake-up call
The news of a 15% reduction in our marketing budget, from 9.1% to 7.7% of company revenue, hit hard. This reduction is not just a matter of trimming excess; it forces us to reconsider how we operate on a fundamental level. The average marketing budget was 10.5% of revenue back in 2019, but it has since fallen steadily to this new low. This significant drop underscores the financial pressure we face to deliver more with less.
The G′growing perception problem
One of the most concerning issues highlighted by Gartner is the increasing perception of marketing as a cost center. Nearly 47% of CMOs, including myself, believe our departments are seen in this light, up from 39% last year. This perception is not only frustrating but detrimental to our efforts. When marketing is viewed as merely a cost, it is often the first area to face cuts, especially in tough economic times.
The importance of UX/XM
What really struck me is the role of the UX/XM journey in shaping this perception. When the customer experience is fragmented, our marketing efforts, no matter how well-intentioned, fail to deliver the desired results. Gartner’s research shows that companies with a strong understanding of their audience are 39% more likely to exceed their revenue goals. This statistic highlights the importance of not just attracting leads but also ensuring that those leads have a seamless and satisfying experience from start to finish(q3-2024-cmo-journal).
Aligning Marketing and Sales
One of the key takeaways from my experience is the critical need for better alignment between marketing and sales. Too often, leads generated by marketing fall through the cracks due to poor follow-up, inconsistent messaging, or a lack of personalized engagement. Gartner points out that organizations with strong Marketing Operations (MarOps) are better equipped to exceed their performance goals. Companies that invest heavily in MarOps, with some planning to increase spending by 45%, are likely to see a significant improvement in their ability to align marketing efforts with broader business objectives.
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Rethinking AI and data-driven strategies
While AI and data-driven strategies have been touted as the future of marketing, the reality has been more complex. Despite significant investments, the anticipated cost savings from AI have been slow to materialize. However, the potential of AI to improve customer segmentation, ad targeting, and personalization remains undeniable. As we move forward, the challenge will be to better leverage these technologies to deliver measurable ROI and demonstrate their value to the organization.
My commitment going forward
As I reflect on these insights, I’m more determined than ever to close the gaps in our UX/XM journey. This means working more closely with our sales teams, ensuring that our messaging is consistent and that our approach is cohesive across all touchpoints.
I’m also committed to rethinking how we use AI and data to better serve our customers and improve our bottom line.
My questions for reflection
Now 2024 is shaping up to be a defining year for marketing.
The challenges are real, but so are the opportunities for 2025.
By addressing the gaps in our UX/XM journey and ensuring that our marketing efforts are closely aligned with sales follow-up, I believe we can transform our department from a cost center into a true driver of business growth.
How much budget cut did you get in 2024 and even more expecting for 2025?
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