An Advanced Demand Generation Strategy is part of your business’s strategic plan. Its goal is sustainable, 

• Long-term revenue growth, 
• Profitability, 
• Improving total shareholder returns
• Market share growth, 

Strategy sessions with business leaders and or the board generally start with these three steps, 

1. Explore Strategy across three-time horizons (short, medium and long-term)
2. Encourage productive and stimulating Strategic Dialogue (always leave a chair vacant for the voice of your buyer – ​Steve Jobs famously said that you need to create an environment where the best ideas win. Independent Chairs ensure the best ideas win)
3. Engage a broad, decentralised group of stakeholders. Groupthink is comfortable – it’s easier to go along with the crowd than to fight against it. The lack of friction leads to less creativity and poorer outcomes. Allow stakeholders room to push against the bias of Groupthink by setting up a time for alternatives before decisions.

Typically as the strategy sessions get closer to preparing next year’s draft budget – various sections of the business come under fire to justify their proposed spending. 

Marketing and Sales budget preparation is one of the first to gain scrutiny – in my experience. 

 

Can brand and marketing spending be reduced to shore up this year’s financial results? 

 

Boston Consulting Group has come to the rescue with its definitive recent research. It reveals 

• Reducing investments in brand marketing during downturns backfires,
• Key performance metrics suffer when businesses decrease their investments in brand marketing,
• Costs more: Regaining lost market share due to previous cuts in spending on marketing requires 85% more spending to regain market share. 
• Total shareholder return declines. The TSR of companies that decreased brand spending from 2017 to 2019 was six percentage points lower over the 2018 to 2021 period than the TSR of those that increased brand spending – note if you want angry shareholders – reduce your marketing spend. 
• Market share drops – cut brand spending. You lose 0.8 percentage points of market share relative to those that boosted brand spending.

The formula: If you reduce brand-marketing investments, you will suffer from 

• Market share loss, 
• Reduced sales, 
• Decreased shareholder returns, 
• Higher future costs to build back,
• It leaves businesses no more profitable in the short run, 

Best practise

• Boost or maintain spending during a downturn,
• Radically improve where you spend brand marketing to gain more ROI,  
• Marketing, like other forms of investment – is through a multiyear lens. Increasing investment cuts have multiyear financial impacts, 
• If urgent cuts are needed – factor in it will cost 85% more to regain lost market share in the future, 

The story’s moral – do not cut marketing – will cost 85% to regain lost ground. Instead – lift marketing spending – and gain more. 

More growth frameworks that may assist

Regards 

David