Marketing’s solution to inflation: Account for every dollar

The dynamics between businesses and customers are changing – even as you read this. After a tumultuous few years, inflation is the current hardship. You feel it at the pump and at the grocery store, and it’s impacting everything from travel costs to home buying. Things are different. The marketing you did four years ago needs to adapt. Marketers need to… dare we say it… pivot.

In the wake of inflation, what should marketers do to get ahead?

To ensure that CMOs are meeting inflation’s need for accountability, CMOs must transform their approach to marketing in the following ways:

Measure your ROI differently

Clicks and traffic are no longer indicators of success. They are vanity metrics. Today’s CFO wants to know whether marketing spend is generating business. Inflation is a crisis that companies need to confront, and profitability must be center stage. If it’s not adding business value, marketing will be seen as discretionary.

“The question CMOs need to answer is, did you attract more customers, and did they spend more money? Marketing leaders need to ensure that there are sales at every margin,” said Jason Galloway, Principal at KPMG.

Get to know the transformed customer

Core to increasing ROI is getting reacquainted with customers. Ask questions like, what are they buying? How are they buying? How much are they spending now that prices are on the rise? Why are they buying from you? And what kind of feedback have they shared? The answers to these questions are within your data – and this data must be connected to your company’s performance. Connecting customer acquisition and retention to performance is paramount. “Performance is just as important as messaging. If you promise a customer something, you better be able to deliver on that promise,” said Jennifer Linardos, Director of Marketing Consulting at KPMG.

With unlimited options, customers seek to buy from brands that they trust. When customers do not trust a company, they will shop with another brand instead.

Be proactive

Many of today’s marketers have approved budgets at their disposal and are not yet feeling the urgency of changing their marketing spend strategy. But that complacency will soon come to an end.

It’s time to be proactive. See what customers want and need – and are willing to spend their valuable dollars on – and increase channels to profitability. Companies must create their customer journey with as much diligence as they would create the product journey.

Now is the time for marketing leaders to accelerate, innovate, and transform their approach to spend. “Drive the conversation instead of being driven by it. When you’re proactive, you can dig into certain areas that you never looked at before and find new opportunities to increase ROI,” said Ryan Doubet, Managing Director at KPMG.

This has led KPMG to create a new operating model that optimizes planning, performance, and productivity that helps CMOs run the business of marketing. A common terminology and set of metrics enable marketing teams to connect their business strategy to their marketing goals, plans, and budget, and to make data-driven decisions that drive profitable growth.