Majority of CMOs (73%) plan to take a low risk approach this year by relying on existing customers to fuel growth in 2021 rather than banking on acquisition. About 39% of CMOs plan to increase sales of existing products to existing customers, while 34% will introduce new products to existing customers in 2021, said Gartner's CMO Strategic Priorities Survey 2021. On the other hand, only 18% say they plan to enter a new market using existing products, while 7% intend to enter a new market with the introduction of new products.
In fact, 74% of respondents from the financial services sector said increasing sales of current products to existing customers was their go-to strategy, compared with only 21% of respondents from IT and business services. On the other hand, respondents in travel and hospitality were most likely to favour the option of introducing new products to existing customers, with 50% selecting this as their primary strategy to fuel growth.
Of the 39% of marketers who are sticking with sales of existing products to existing customers, 48% plan to do so through increasing promotion and distribution efforts, while 30% plan to do it through decreasing prices to attract or new customers. At the same time, 22% intend to do so through acquiring a competitor in the same marketplace.
Meanwhile, of the 34% of marketers who will introduce new products to existing customers, 47% will do so by investing in new research, development and promotion to create and market those products, while 27% will do it through strategic partnerships with other firms to gain access to each other's distribution channels or brand.
While focusing on existing customers has benefits such as being low cost and low risk, Jay Wilson, vice president analyst in the Gartner Marketing practice said this low risk is matched by relatively low return. At the same time, Gartner also sees CMOs being overly ambitious in terms of the change they expect to bring to how their organisations interact with customers. According to Wilson, CMOs need to ensure their own strategic approach is match to the company's goals, especially with the scale of recent change companies have experienced as a result of the pandemic.
Gartner's study also explored 11 key strategies and asked CMOs which would be rescaled to accelerate new growth, reinvented to be better positioned postpandemic, returned to prepandemic levels, reduced lower than prepandemic levels, or retired because they are no longer sustainable. Respondents' top answer for nine of the 11 was to reinvent efforts. Further, half of respondents plan to rescale or reinvent six of the 11 strategies, while almost 31.8% said they plan to rescale or reinvent eight of the 11.
That said, Gartner noted that CMOs cannot reinvent and rescale everything while still executing effectively and remaining agile in such uncertain times. It added that those who attempt to reinvent too much simultaneously risk failing to do any one thing right while overburdening their teams.
For every strategy that has been chosen to rescale, Gartner said another must be chosen to reduce or retire. And for each strategy that has been reinvented, another must return to pre-pandemic levels and approach. As the right priorities will be different based on category, position, and challenges as well as opportunities, marketers need to be choosy about the strategies and tactics they choose to expand or change.
Despite the aim to rescale and reinvent, 24% of CMOs say they expect traditional retail to return to pre-pandemic levels and 26% believe the same for physical events. According to Gartner, this indicates that many CMOs are able to see a path to pre-2020 normal. It also proves that COVID-19 has not rendered traditional channels irrelevant.
To realise the greatest returns this year, CMOs should be selective, document decisions, and scenario plan. When it comes to being selective, CMOs should focus on efforts that are most essential in the short-term, most aligned with their growth strategies for 2021, and best suited for their organization’s capabilities and resources. The rest should be delayed, deprioritised, or delegated.
Meanwhile, it is important to ensure that every decision to reinvent, rescale, reduce, retire, or return to pre-pandemic levels is documented for other stakeholders. Doing so will prove to others on the management team that marketing's priorities are focused on the highest returning initiatives. Concurrently, CMOs should also institute formal scenario planning to support a constant cycle of iterative adjustments as 2021 economic conditions warrant, Gartner said. The report surveyed 381 marketing executives in North America, the UK, France, and Germany at companies with US$500 million to US$20 billion or more annual revenue.
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