Companies that move too quickly to cut marketing budgets in the economic slowdown risk damaging their ability to hold and add customers when conditions improve, a market research firm says.
In helping companies make the right decisions in dealing with the current downturn, Gartner is recommending that organizations this year automate six marketing processes that the analyst firm says will help drive revenue, cut costs and drive return on investment.
Three of the processes, customer retention management, lead management and online marketing, focus on boosting sales, while the others, creative production management, marketing fulfillment and financial management, are designed to improve accountability and cut costs, Gartner said.
Here's a brief explanation of each of Gartner's recommendations:
Retention management: Organizations should calculate the profitability of customers and develop retention programs for those they want to keep,Gartner says. Such programs would include understanding how the customer is affected by the economic slowdown and finding ways to support them. Event triggers can be set up to identify when a customer's circumstances may change and staff should be trained on how to respond. Companies that develop effective retention management processes will reduce churn of profitable customers by at least 10% within six months,Gartner says.
Lead management: Marketing insights should be used in the lead management process to improve lead quality and ensure higher conversion rates by sales,Gartner says. For example, marketing data and content can be used to augment leads before they're sent to sales. Companies that automate the lead management process will increase revenue by at least 10% in six to nine months, despite the down economy.
Online marketing: The Web is a cost-effective way to reach customers and is one of the easiest channels for measuring marketing return on investment.Gartner recommends identifying and prioritizing three or four online marketing initiatives and making room in the budget for those that deliver high ROI. Companies that invest in new online marketing processes will increase revenue at least 10% within six months.
Creative production management: Automating creative production or product launches gets products out quicker, improves resource allocation and efficiency and cuts marketing costs without cutting programs,Gartner says. A marketing resource management module for creative production management can incorporate calendaring, tasks, project management, business rules andworkflow to free up time for more-creative work. Companies that automate creative production will cut 15% or more off of their creative advertising budgets in three to six months, the research firm says.
Marketing fulfillment: Often a component of marketing resource management software, marketing fulfillment applications provide anytime access to collateral via portal, print-on-demand and procurement capabilities, helping to reduce paper, shipping and physical storage costs. Investing in such technology would eliminate 5% or more of marketing waste within three to six months.
Financial management: In a tough economy, improving marketing's accountability is important to prevent the financedepartment from cutting the budgets for valuable programs. Gartner advises the creation of a standard set of planning, budgeting and financial management processes for the marketing organization that, in turn, include processes for monitoring and alerting. This allows for ongoing financial management and reallocation of funds, the researcher says. Marketing organizations that invest in financial management capabilities will see fewer budget cuts.