2020 was a year that none of us saw coming and no company, industry or person was unaffected when the world turned upside down in March.
As we kickoff the new year, we will take the valuable lessons we learned in 2020 and apply them to our businesses and marketing strategy for 2021.
Our CEO, Susan Thomas, has helped enterprise tech companies secure more than $8.1 billion in exits and valuation increases in the last five years alone. Thomas has channeled her decades of experience in Silicon Valley into the five predictions, listed below, that CMOs must consider when setting their strategy for 2021:
Budget Cuts Will Catch Up with Technology Companies
COVID-19 caused businesses to reduce costs and re-think their revenue and plans for 2020 and beyond. In 10Fold’s nationwide survey published this fall, the 2020 CMO Report, 61% of B2B technology companies reported their marketing budgets were cut during the pandemic. Most surprisingly, 60% of the respondents reported that their key performance indicators (KPIs) had not changed, despite these cuts. Producing the same results with less resources isn’t a viable option for the masses, and yet the impact of this change will likely take six to nine months to become apparent based on a typical enterprise sales cycle. This confluence of events will likely cause missed revenue numbers and churn in marketing and sales staff in 2021. Marketing agencies must be prepared for an influx of calls from marketing executives who understand the need to build top of funnel demand quickly, but don’t have the internal resources.
Technology Has Become the Great Equalizer for Smaller Businesses
The rise of SaaS applications for every function of a business and for businesses of every size, robotics process automation (RPA), application developers with AI experience, and “rentable” technology “as a service” have created a great advantage for small businesses that would otherwise not be able to afford automation and access to sophisticated business analytics. With these benefits much more affordable and accessible, there is no reason even a small business cannot “go digital” to reduce costs and fuel growth. With these advantages, small businesses across industries will be as attractive as their larger, more expensive counterparts to customers of all sizes.
Victory Will Go to the Swift (and Adaptable)
If there is one thing the pandemic taught us in 2020, it is to be nimble. We saw companies pivot to adapt to the needs of the workforce that was largely working from home, to shoppers that found it dangerous or very inconvenient to shop in-person, and even to those that needed to be entertained during what became very long and monotonous days. That meant sales cycles became shorter for solutions that were relevant to buyers. Unexpected items like trendy bicycles (selling for an average of $2,000 per bike) were out of stock for months. We also learned that buyers already feeling somewhat desperate based on the pandemic-based predicaments valued vendors that could respond quickly and offered easy access to products and services. Evidence for this can be seen for those seeking hand sanitizer, to those deciding to engage in a website makeover. Companies that can continue to quickly adapt through the much-anticipated new normal phase, will continue to succeed.
Focus and Industry Expertise Will Continue to Increase in Importance
As we’ve watched the funding landscape in B2B tech, and from my own experience as a limited partner in two venture capital firms, the investment community is quickly turning toward investing in solutions that solve specific problems for functional groups (such as HR, sales, and operations) and for companies in very specific markets such as healthcare, finance, etc. They are not wrong. Companies working within those industries likewise prefer vendors with solutions and services that look and feel “tailor-made” for them. These customized solutions will be largely preferred over “horizontal” products and services that convey no understanding for their industry, buyers, or market dynamics. This is particularly true in the case of communications agencies – where there must be an inherent understanding of the industry and dynamics to deliver responsive and effective communications around a crisis and the unexpected, as well as planned announcements.
Global Economic Uncertainty Will Drive a Requirement for an Explicit ROI
Traditional marketing and communications agencies have relied on “brand awareness” as the sweeping explanation of value that they create for their clients. Until we can put a dollar amount on brand awareness, especially within smaller companies, services such as these will be de-funded or eliminated altogether through 2021 while budgets recover from the pandemic. There is an opportunity for these agencies to move toward becoming strategic partners that support everything from top of funnel demand generation to support for middle and bottom of the funnel in the buyers’ journey. Buyers, such as marketing executives, must also adapt their buying patterns to evaluate solutions that demonstrate a data-driven approach that delivers ROI. Without a shift from both buyers and sellers towards an ROI-driven approach, many buyers and the companies that support them will not measure up as planned.