It is easy to understand that with today’s uncertainty, the first thing that comes to mind for many businesses is to cut, stop, eliminate, or slow their marketing, hiring, innovation, and productivity budgets. While almost every piece of available data points to a slowing economy and reduced purchasing power for businesses and consumers, this may not be the best strategy.
Inflation is not “transitory” as originally advertised.
The cost of money is now back to a more realistic basis, i.e., it is not “free”. And the apparent harbinger of not only the economy but everyone’s mood, the markets are down 15 – 22% depending on your market or index of choice for the year. Every piece of news portends a global recession. Feel discouraged yet?
Maybe we should take a step back and look at the current landscape a little differently. Sometimes simply changing the angle at which you look at something changes its perception for you.
We have had an unprecedented level of growth over the last 10 or more years.
In the marketing space, it seems there are an unending number of new services and technologies that seemingly answer every challenge companies face, and in return, glean a percentage of the ever-growing marketing budget.
According to Statista, global digital advertising spending has grown from $27B in 2010 to over $299B in 2020. This is a 27% CAGR increase over those ten years and is a result of growing display networks, social media properties, the exponential growth of mobile, and overall growth in spending at the expense of traditional advertising mediums.
Excluding cinema advertising—which was drastically cut in 2020 because of COVID-related theatre closures—social media, OTT video, and search saw the strongest year-over-year growth among advertising channels in 2021 (+42%, +42%, and +39%, respectively).
At Lead Assign, we don’t see the advertising budgets our clients deploy, but we do have a unique window on the leads they create which is a good proxy for their overall spend. Managing the intelligent distribution of those leads is our business and we can see a couple of interesting trends, especially as we hear of downward pressure on budgets overall.
Trend 1: Top companies increase lead generation.
In general, our clients know their lead generation is guaranteed to be handled by a sales team member so they typically double down on lead generation instead of cutting back on it. Any erosion they have in their revenue or their pipeline can be offset by increasing their demand generation.
Trend 2: Sales cycle times tend to increase.
When customers or consumers are more hesitant to spend on goods and services, the sales cycles increase. There is more thought into the final purchase, and in B2B sales, this can be especially true. When sales productivity drops, sales teams need to work smarter. It’s here where we see the benefits of, not only prioritizing speed-to-lead, but also ensuring every lead is in the right sales team members’ hands to offset the increased sales cycle.
Trend 3: Reducing unnecessary internal IT spend.
Customizations of the existing software stack tend to be put on the back burner. Customizing your sales pursuit handling or extending your CRM to your sales partners very quickly gets shelved. Typically, these projects require large groups of stakeholders and significant budgets. We’ve seen more reliance on ensuring the stack is “right-sized” and “fit for purpose” appropriately.
Trend 4: Pressure on ensuring marketing ROI.
The holy grail of marketing spending is knowing close attribution concretely. Did the $1 on social media drive the sale or was it our brand targeting on search? When times are good, marketing benefits from the rise in sales opportunities. In a downturn, the organic opportunities shrink putting revenue attribution in focus.
What Lead Assign Sees
We are in a unique position to understand not only where our clients’ leads come from, but also which channels have the highest efficiency given our tight coupling of the lead source to CRM tracking. As a result, we see revenue teams double down on high-performing sources, especially in times of uncertainty.
Overwhelmingly, we see our clients at a minimum keeping their lead generation consistent but more often increasing their lead generation activities as a potential recession looms. The adage “smart companies double down when times get tougher” seems to hold, but with an important distinction: they have the tools to understand and optimize their lead generation, and thus, their marketing budgets.
Although the state of the economy is an important factor in your business success, it isn’t the only factor, and in fact, is not the most important. The ability to understand your marketing and lead generation with enough granularity to be able to turn the appropriate dials to drive additional growth is the most important factor in your success – regardless of the state of the economy.
Making the most of your marketing spend is no easy task, yet many companies find a way. For more information on how the modern travel agency converts its leads effectively, check out our case study.
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