Since the start of our ‘The State of Marketing UK Budgets’ series, we’ve uncovered how the uncertainties of a tumultuous 2020 have affected marketing budgets across the UK.
We’ve identified which areas of the marketing function have had to contend with cuts to their annual or quarterly allocations. We know that events have received the biggest cuts this year and will play a minor role in next year’s marketing plans.
It would appear that the government’s planned UK vaccine rollout isn’t enough to convince marketers that physical events are worth the risk of early 2021 investment.
In this blog, we will take a look at the wider business challenges our marketers have faced this year, from customer retention to what to do with rainy day funds and the new role that marketing could play in helping to achieve business success in 2021.
Budget cuts increase marketers’ digital pain points
A recap of the top five business challenges that our respondents faced this year shows that the overall up to £480,356 cut in marketing budgets experienced per business translates into enhanced pain points across the board.
The most pressing challenges for marketers as they raced to meet goals that had been set during a different climate i.e prior to the pandemic were:
- Customer retention (26%)
- Maintaining volume and quality of activity (23%)
- Social media strategy (21%)
- Customer acquisition (21%)
- Reducing spend (20%)
When considering these figures, it’s worth noting that the nature of marketing in itself means that many of these challenges are directly linked to each other, meaning that our marketers had to tackle them simultaneously.
For instance, in a scenario where a reduction in spend halts marketing recruitment, leading to a gap in tech skills and knowledge, which then leads to a businesses’ inability to implement and maintain data driven, tech enabled activity that could drive customer retention.
New challenges, but digital reigns supreme
The business challenges our marketers are anticipating for the year ahead paints one of the clearest pictures of the immediate effects of the pandemic on marketing budgets.
Maintaining a social media strategy has dropped out of the top 5 completely, whilst Customer Retention increases by 9%, to become the biggest challenge for 35% of our marketers.
This is followed by a closely linked customer focused strategy: Maintaining volume and quality of activity (26%) which can help to build and maintain brand awareness, leading to increased retention.
The remaining three challenges are particularly interesting because 23% of our marketers have to reduce spend in 2021, whilst 19% have identified ecommerce as a major challenge for next year. And in keeping with the more digitally focused marketing landscape, 18% will prioritise audience targeting.
The focus on ecommerce is a new but important addition because the adoption of digital commerce has accelerated by multiple years in only a few months this year.
In fact, in 2020 the experience that mattered most to customers was a decentralised and mostly digital only experience powered by ecommerce capabilities.
This includes social selling on platforms such as Facebook and Instagram, and the renewed focus on omni-channel which resulted in digitally led instore transformations such as interactive make-up counters.
What hasn’t changed is the importance of understanding customers
Businesses can gain a competitive advantage by investing in ways to understand their customers’ varied perspectives, which will help them to deliver personalised and contextualised engagement.
According to Salesforce, one important way for brands to do this is to ensure that everyone in the marketing department has access to real-time customer data that facilitates a more enriched understanding of the customer base to enable automated, personalised experiences.
But its own recent study shows that only 37% of organisations with at least 250 employees had the skills and technology to keep pace with digital projects during the Covid-19 pandemic.
This suggests that it is the responsibility of businesses to not only invest in updating legacy systems and tech, but also ensure that their employees are part of this digital investment and are reskilled to use the tools that will help them to compete in the marketing stakes new year.
An important business lesson for 2020 is that all companies must adopt a digital first mindset to survive in the ‘next’ new normal. This primarily involves investment in core digital capabilities and tech such as marketing automation to allow for agile pivots in response to more changes in customer behaviour.
With effectively segmented customer data insights at your fingertips to track, analyse and respond to any changes, you should be confident in your ability to tackle many of the marketing business challenges ahead.
To find out how our 200 marketers are planning to tackle the new challenges of 2021, follow our exclusive The State of Marketing UK Budgets’ infographic series, to receive deeper insights from our research.
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