Learning from Consumer Marketing
A recent McKinsey global survey of chief marketing officers and senior executives on how companies budget, plan and measure marketing campaigns concluded that “consumer-focused companies are stronger marketers” on the basis of their more disciplined use of metrics and benchmarks in allocating marketing resources and measuring performance.
Now, most healthcare marketers operate in the business-to-business (B2B) space and we are painfully aware that business-to-consumer (B2C) companies typically have far more marketing resources, but the McKinsey results point to something worth reflecting upon. If our resources are more limited, would it not make sense for us to pay even more attention to how we allocate budgets and track results? The results of the survey suggest some best practices that healthcare marketers should consider.
A clear and global view of marketing budgeting and spending. The survey showed that consumer companies are more likely to have standardized processes for allocating and communicating marketing spending across business units, channels and geographies. Likewise, they are more likely to conduct systematic, regular and quantitative reviews of marketing mix and effectiveness, and to use past effectiveness as a gauge for future allocations.
Planning with an understanding of barriers to purchase. Our B2C counterparts “take a much more comprehensive approach to understanding barriers to purchase, with 46 percent of B2C companies using a mix of quantitative and qualitative assessments . . . ”
Targeted vs. across-the-board budget cuts. More than half of the companies surveyed plan to decrease marketing spending in the next 12 months, and among those that are planning to cut budget, 40 percent are making across-the-board cuts. Just as interesting, companies where marketing spending is clearly allocated and understood across the company are likely to make cuts that are more targeted.
A time for budget increase? One third of the companies surveyed plan to increase marketing spending over the next 12 months. High-priority campaigns (52 percent) and digital media (38 percent) are the top two areas where spending will be increased.
The authors concluded that B2B companies “have an opportunity to improve their performance just by catching up to what their consumer-oriented peers are already doing to manage their marketing programs” and that companies that have a good grasp of their marketing spending are more likely to make targeted cuts and/or increase spending on high-priority campaigns. I agree. Why not make better use of the budget, build performance measures and then use the demonstrated ROI to expand future efforts?