During the last downturn, I remember a cartoon from the Harvard Business Review by Bob Vojtko showing two guys looking at a single sheet of paper saying, “we are able to cut our marketing budget in half by just guessing.” Unfortunately, for many requesting next year’s marketing budget right now, that cartoon is uncomfortably close to reality. The question going into 2021 for many marketers is: how do we do more with less, and where do we prioritize our dollars for maximum growth results?
With revenue and margins down, it should not surprise marketers that budgets would take a hit, or that measurable results would be demanded by senior leaders. A recent Deloitte CMO survey found that over the last 10 years total marketing budgets have continued to rise, however those budgets are expected to go down. And almost 2/3 of leaders surveyed said that the overall marketing function has increased in importance especially during the pandemic. So with lower budgets and higher pressure to produce results, how do marketers steer through this situation successfully ahead?
Navigating uncertainty requires focus. And that starts first with understanding your ideal target members, where to reach them, and how to serve them better – all vital steps to successful marketing and targeting strategies that can be measured. In order to create this focus as marketers we have to prioritize our initiatives.
Here are the three budget areas that marketers should not cut in 2021:
- Marketing Technology (Martech) Analytics
- Digital Marketing
Marketing Technology & Data Analytics
An August survey by Gartner of 432 marketing leaders shows that heading into 2021, roughly 2 in 3 (68%) expect their Martech budget to increase in 2021 despite the budgetary impacts of COVID-19.
Why is that? Certainly, understanding the data around member relationships is the first reason. Financial institutions are sitting on a wealth of data, and most know that they are only seeing and able to learn from a fraction of it today. Many credit unions are already hard at work going through a “digital journey” to organize, focus and visualize their data.
While organizing and visualizing data is an important first step, it’s the actions you take with that data that actually drive tangible results. Leveraging data for increased targeting, personalization and impact is one of the greatest under-tapped opportunities in 2021. It’s often called the “Last Mile” of data analytics, but it’s often not the focus of IT and BI teams in leveraging data.
Business Intelligence Platforms that are able to mine, append and enrich your existing member data in the cloud are called Customer Data Platforms or CDP’s. CDP’s are just starting to gain traction within the financial industry, as marketers move beyond the limitations of legacy MCIF systems, because of their ability to better understand member relationships and profitability and then apply that data into actionable targeting and personalization. Strum offers a state of the art Azure-cloud based CDP called Strum Platform which helps fill in the gaps of understanding your existing member lifestyle segments and relative profitability, along with driving actions and tracking ROI results.
CDP’s help in fostering deeper trusted relationships and richer onboarding, while the Deloitte study noted that trusted relationships have a significant increase in importance and priority in this COVID-19 period.
It’s important during a time of uncertainty that your brand reputation and tone of voice is highly relevant and you are perceived as being there for your members – right when they most need you. More than ever, consumers are dialed into what brands stand for, and they are looking for leadership, empathy, wisdom, and above all alignment with their personal values. (My colleague and principal at Strum Agency, Karen McGaughey, shared her brand and culture insights earlier this year with 3 Steps to Ensure Your Brand is Poised to Adapt and Lead, which is a great read.)
When the economy is doing well, flaws in consumer brand perceptions can be easily dismissed. Steady growth can hide weaknesses and below average NPS scores. But when the economy is in a downturn it is harder to ignore those flaws any longer. During this time, it is important to recognize when to adapt or even pivot your brand to position for higher relevance, future growth and success.
Many credit unions are struggling with, or suffering from, one of the most central components of their brand – which is often perceived as taboo to even discuss – and that is a legacy name that creates consumer confusion and misperception about if the organization is “right for me,” inclusive and welcoming, or even “accessible to join.”
Doing a new name – or rebranding should not be taken lightly, so before jumping in feet first, evaluating name equity and brand alignment is key to the success for remaining relevant and sparking growth. But the time to invest is now, and credit unions that use this moment to address any challenges head on – be that name, logo, brand positioning, lack of online capabilites, or whatever it might be – will surpass those who just hunker down and treat this moment as a temporary storm to weather. (Check out a recent Strum webinar with Frontwave Credit Union to hear about the importance and value of a bold new name and brand transformation for overall organizational alignment and appeal to members.)
Having a name and brand that is clear and provides focus overall energizes the entire organization, along with creating a clear vision and path of what everyone should focus time and energy on. This organizational focus also ties directly to the first category, because having deep data-driven insights on which segments your brand needs to attract is vital to marketing success.
The final marketing budget item to not only not cut, but actually increase is a continued investment in digital marketing and advertising. While traditional advertising continues to play a role in the mix of awareness and differentiation, the growth of digital and social advertising has caught on fire due to the pandemic. More people are home, streaming content, on computers, and looking at ways to better their financial situation.
Deloitte identified a 4% increase in social and mobile advertising, at a time when marketing spending was otherwise very conservative. The ability to precisely target and personalize messaging so that you can show (not just tell) the right targeted consumers how you are the right solution for what they need right now – coupled with the immediate performance feedback for further insights and optimization – is why digital marketing is critically important for savvy financial marketers and for tracking results of marketing budgets.
Digital marketing and the other two budget priorities of data analytics and strong branding are, of course, all mutually reinforcing. Heading into 2021, if these three areas are not receiving growing shares of your marketing budget and team resources, it’s not too late to re-evaluate your priorities and adapt.
Right now credit unions have a wonderful opportunity to step in and provide that knowledge, guidance, and help that their members need during this uncertain time. Ensuring your brand is in order, understanding and effectively leveraging all the rich data available to you, and using smart tactics to connect with target audiences in a highly personalized way are your best bets for a 2021 year that can feel dicey, but is really a huge opportunity to position your institution and brand reputation for future success.