In today's fast-paced business world, it is essential to adapt and evolve your Go-To-Market (GTM) strategies to overcome budget challenges. In this article, we discuss key tactics to ensure marketing efficiency and effectiveness, even when budget constraints loom large.

1: Advocate for Marketing Efficiency and Effectiveness Above Budget

In difficult times, top management often considers reducing go-to-market efforts, leaving marketing on the defensive about budgets. Some managers may even convince themselves that sales alone can be sufficient.

But this approach has a fundamental flaw. Today's prospects continue to be heavily influenced by their environment, trusted companies and the wealth of information available. Statistics reveal that 84 per cent of B2B buyers start their buying journey with a recommendation, and peer recommendations influence more than 90 per cent of B2B buying decisions.

Even the most successful sales teams with the best bonuses can't bridge the gap when marketing is lacking. They also struggle to deliver customer experience and effectively communicate the value of your brand. Research shows that deals are 67 per cent more likely to close when sales and marketing are aligned. successful alignment can double revenue, even in challenging environments, compared to scenarios where sales trumps marketing.

Price and product are just two of the many levers in your GTM strategy. Neglecting critical marketing levers such as brand differentiation, ecosystem engagement and positioning can lead to plummeting margins. While marketing cuts may reduce customer acquisition costs, they can lead to a significant drop in annual contract value of up to 45 per cent

Reducing marketing budgets during downturns can disrupt revenue targets and reduce portfolio impact. Instead of supporting recovery and growth, such decisions can put significant downward pressure on profit margins.

According to research, marketing budgets grew at a 72 per cent slower rate (from 10.4 per cent to 2.9 per cent) in 2023 compared to the previous year. Most of these budgets were allocated to marketing technologies, driven by the need for accelerated digital transformation. However, most digital transformation initiatives struggled to deliver returns in the short term.

Successful projects are well scoped, focussed and highly accountable. Smaller digital transformation initiatives have delivered much higher returns (around 9 to 22 times more) than larger, over-designed ones over the past three years. The main themes of success have been better training, simplified customer experiences and approaches based on decision intelligence.

For CEOs, boards, COOs and CFOs, defending marketing budgets with theoretical or outdated high-level data can be seen as a defence of inefficiency. Effective marketing organisations self-regulate by proactively evaluating the effectiveness of their technology and reallocating funds from underutilised areas.

2: Review Your Vendor Selection Process

Investments in marketing technology are one of the areas most likely to see budget cuts in 2023 and beyond. The rush for accelerated digital transformation has led to significant investments in systems that aim to increase engagement, intelligence and efficiency. However, this rapid investment has left many projects in limbo and systems orphaned.

To effectively manage your technology investments, it is essential to return to a systematic and accountable approach to technology selection. The cost of resisting technology investment was higher than the margin for error before and during COVID. In an environment where funds were plentiful, overinvestment was common, but times have changed. If you have invested more than average in marketing technology, you have an opportunity. You can emphasise your success with the right investments while eliminating problematic budget items that hinder your effectiveness. Trying to defend all aspects of your technology stack will not lead to success.

Over the last few years, revisiting your supplier selection process can have a significant impact. Consider the following:

Utilisation Status and Needs Assessment: Revisit technology investments that support underutilised or non-existent use cases.

SLA Performance and Roadmap Alignment: Evaluate how well vendors are meeting your needs and anticipate future market requirements.

Review Heavily Controversial and Unanimous Decisions: Review past decisions, especially those made without much scrutiny. Analyse them according to new criteria and act accordingly.

Returning to a systematic and accountable approach to technology selection can help you optimise your marketing technology stack.

3: Adopt a Value Creation Culture

Once a buzzword. Growth Hacking, has gained a negative reputation due to its low success rate, limited strategic value, opportunity costs and associated corporate and brand risks. A shift from a culture of random growth hacking to one of creating real value for customers is essential for long-term success.

"Value creation" involves creating offerings that fulfil customers' basic needs. Today, it extends to "adding adjacent value" to existing platforms or GTM strategies and fosters a sense of community by adding partners to traditional stakeholders.

Transitioning to value creation requires in-depth research and a solid understanding of your capabilities and customer base.

The three potential value creation actions are:

Review Market Value Gaps: Consider which of your existing GTM capabilities can fill existing market gaps

Invest in Market Intelligence: Stay informed by monitoring evolving market dynamics and early-stage startups in your industry.

Create Incentives to Create Value: Incentivise mature experimentation and avoid rewarding clumsy, cumbersome solutions.

4: Prefer Market Share to Growth Piracy

Market share should be your top priority for maintaining or expanding marketing budgets during challenging times. Many CEOs regret not prioritising market share in more favourable times. Market share strategies have lagged behind growth-at-all-costs tactics, even when they are essentially solving specific problems better than competitors.

Transitioning to market share strategies is a second-order level of thinking where real business models can demonstrate success. It requires a deep understanding of the market, competitive intelligence, company capabilities and the brand ecosystem.

Your company can gain market share in a variety of ways, including improving customer experiences, buying strategies, innovation, expanding into new markets, building partnerships, and positioning your brand effectively. Sometimes it's a matter of letting competitors make mistakes.

However, it is important to remember that more market share is not always better. Market share can reduce profitability and increase business risks if pursued haphazardly. Carefully evaluate market share strategies and develop contingency plans to guide complex GTM investments.

A Message to CEOs and Boards of Directors:

Allow marketing and GTM leaders to present their case before implementing budget cuts. Recognise well-researched and proactive strategies. Review and re-evaluate decision-making processes. Reward opportunities to create lasting value. Focus on market share strategies to accelerate growth during the next economic upswing.