About 27.2% of marketers believe their customers want trusting relationships with their vendors. This insight comes from the February 2020 The CMO Survey conducted by Dr. Christine Moorman at Duke University’s Fuqua School of Business and sponsored by Deloitte and the American Marketing Association. The interest in customer relationships marks a significant increase from the levels reported in last August’s survey. At the same time, only 10.4% of marketers expect their customers to focus on price, which is a big drop from six months ago.
Growth of eCommerce
Of course, marketers know that maintaining an existing customer is more profitable than bringing in new ones. Some marketers may feel their customer relationships are more important because they have fewer opportunities to improve them in person. eCommerce continues to be a big driver of sales, increasing from 9.9% to 13.5% of revenue in the past year. Online revenue activity is highest in b‑to‑c product (18.1%) and b‑to‑c service (15.6%) sectors. And the industries with the heaviest concentration of online revenue are education, consumer services, and transportation.
Marketing and Advertising Trends
Overall growth of marketing budgets in the next year will average 7.6%. This growth breaks out by sector as:
- B‑to‑B services 7.9%
- B‑to‑B products 6.9%
- B‑to‑C services 8.4%
- B‑to‑C products 8.4%
As a percent of firm revenue, the average marketing budget stands at 8.6%, a significant increase from the 7.9% level in February 2018.
Part of the marketing budget goes to advertising and the general trend of reducing traditional media spending will continue. In the next 12 months, marketers in b‑to‑c services (-3.3%), b‑to‑c products (-6.4%) and b‑to‑b services (-1.3%) will cut spending on traditional media. Only b‑to‑b product companies will boost traditional ad spending, by 3.7%. Marketers will instead spend more on digital formats, planning to increase those ad budgets by about 13.0%.
The Focus of Marketing Spending — Trusting Relationships
With marketers focused on customer relationships in the next year, they’ll increase CRM spending by about 9%. That’s significantly more than they boost brand spending (7.1%). New service (3.7%) and new product introductions (6.1%) are lined up for smaller increases.
Businesses are also looking for the right way to measure the outcome of their marketing investments. On a scale of 1 to 7, marketers rank ROI as 4.7 in terms of importance. Year-over-year growth gets a higher score, 5.4, for marketers. If you’re talking with prospects about your products and services, be sure to mention that you’ll help them track YOY growth when they spend with you.
Are your clients focused on trusting relationships this year? You can help them understand how well their digital investments are connecting with their key audiences. Check out the Digital Audit tool at AdMall by SalesFuel for more information.