2024 isn’t an easy year to be a Chief Marketing Officer (CMO). Budgets are stretched, making it even more necessary for ad agencies and marketing teams to deliver results and earn their keep.
Customers are becoming savvier, meaning that the established marketing norms are becoming less effective, with PPC and social media marketing failing to deliver the expected results.
For most agencies and CMOs, this necessitates a focus shift, a move away from multiple leads to quality leads, answering the corporate demand for high-value returns for every marketing budget penny.
So, why is this happening, and what can be done about it?
Change in marketing focus
With the cost-of-living crisis rapidly following the pandemic, all businesses are facing budgetary pressures. This is impacting all sectors of industry and all departments within each business.
For CMOs and marketing agencies, it means the need to do more with less – to make budgets stretch further and deliver better results. But this is being made more difficult by the increasing awareness of consumers.
Not only are consumers more aware of advertising practices and the algorithmic nature of targeted advertising, as social media and other online spaces have become increasingly overpopulated with ads, but they are also more cautious, verging on suspicious.
While 90 per cent of business executives think customers highly trust their companies, only 30 per cent of consumers do. This dramatically impacts the effectiveness of pay-per-click (PPC) and other established marketing avenues.
And that’s before we’ve even touched on the problem of ad-blindness. As the number of digital ads and banners increases, so does the consumer’s ability to consciously or subconsciously block them out.
The bottom line is that traditional ads are no longer working. So, agencies and CMOs need to adopt alternative approaches.
Delivering ROI in marketing
While ads have lost their oomph, other marketing strategies are continuing to deliver results.
Offers
Special offers, promotions, freebies, discounts, loyalty programmes, and giveaways are perennially popular with consumers. The idea of receiving something for nothing will always appeal, and loss leaders will always benefit a business, as long as they offer value to its customers. The difficulty here can be in tailoring offers to appeal to the business’s target market without generating too much loss for the business.
Personalisation
Personalisation is great in certain circumstances. When trying to promote products to existing customers, putting the right goods or services – based on previous transactions – in their inboxes only makes sense. The same applies to targeted discounting. But when trying to attract new customers, personalisation runs the risk of being viewed as creepy, particularly as consumer awareness of targeting is increasing. Personalisation can be off-putting in the wrong place, so it must be used wisely.
Content upgrades
With SEO still driving most organic traffic, content remains king. So, all businesses need to pay attention to their digital content. Not only to generate and maintain brand image, but to attract customers and get products seen by the right people. The important thing here remains keyword selection and finding low-competition keywords that can get the brand noticed in the right places.
Referral marketing
Referral marketing means monetising word-of-mouth. However because referral marketing is based upon trust, it carries additional weight for a business. 84 per cent of consumers say they trust peer recommendations above all other advertising sources, while 76 per cent of customers say that they are willing to refer a friend if they have had a good experience with a business. That’s why referred leads are 2 times more likely to convert than leads acquired through paid marketing channels.
However, businesses have to be careful with their source of referral. While brand ambassadors are an option, you may find that affiliate partners hold less sway with consumers since the recent high-profile fall from grace of some of the world’s leading influencers.
Instead, it can be better to focus on creating a referral programme where existing customers can benefit from a special offer in return for personal recommendations to friends and family.
Many of the world’s most successful startups – businesses like PayPal, Dropbox, Uber, and Revolut – were built upon referral programme marketing, using the power of trust to extend their reach effectively and cost-effectively.
You just need a pool of existing customers to ask for referrals, a well-established brand identity, and the budget to cover attractive referral rewards. And with customers acquired through referrals having a 37 per cent higher retention rate and a 16 per cent higher lifetime value than non-referred customers, it holds the potential to be a budget well spent.
There’s no getting around the fact that 2024 presents a tough marketing environment for both ad agencies and CMOs. Customers are smarter. Budgets are tighter. And expectations are higher.
So, if a business’ established strategies aren’t working, finding a new approach could be key to success, and referral marketing, mixed liberally with personalisation, offers, and augmented content could well be the best way forward.
By Kirsty Sharman, Founder of Referral Factory
