“Paralyzed.” That’s how the New York Times describes marketers facing today’s economic headwinds. Tariffs, inflation, geopolitical turmoil – it’s a recipe for inaction. But taking a “wait and see” approach is not the answer. The good news is data-driven foresight can help to turn uncertainty into a competitive advantage.
To navigate the risks, there are three things you should focus on: understanding the impact, re-engineering growth, and building for the future.
Economic storm ahead? Map your impact zone
First, you need to understand exactly how economic factors will impact your KPIs. Instead of gut feel, there are a range of powerful techniques you can use to map your impact zone, including:
- Scenario planning: By modelling different potential futures that take the impact of factors like tariff increases into consideration, you can anticipate potential challenges and opportunities. For example, what happens to your sales if you increase prices to account for higher raw material costs?
- War-gaming: By simulating competitive landscapes, anticipating competitor moves and identifying vulnerabilities, you can develop proactive strategies to maintain or grow market share in light of significant market shifts.
- Demand signals: By analyzing leading indicators, such as new car registrations or consumer confidence indices, you can identify early warning signs of economic shifts that enable you to adjust your strategies before the competition.
For example, we built a model that isolated the impact of inflation and interest rates for a leading online real estate marketplace. The result? They discovered that new customer acquisition was doubly sensitive to interest rate hikes above 5%. While knowing that customer acquisition is harder when interest rates rise might seem obvious, quantifying that impact and understanding the specific threshold where it becomes critical is the kind of insight that informs strategic decisions.
Re-engineer growth with strategic optimizations
Once you know the impact, you can use the insights to re-engineer growth. This isn’t about blindly slashing budgets, it’s about identifying what’s working, what’s not, and how you should adapt in light of change. Examples include:
- Optimizing media mix: Shifting budget from saturated channels to those with untapped potential to ensure you hit your goals.
- Personalizing customer experiences: Tailoring messaging and creatives to shifting customer needs and preferences.
- Improving customer retention: Focusing on building loyalty and reducing churn.
- Uncovering new audiences: Exploring which groups might be trading down from premium brands or who might be more receptive to specific media partners or tactics.
For the online real estate marketplace, recommendations we made across all marketing touchpoints saw the cost per acquisition of a new customer fall by 17%. This was achieved while enabling the company to meet short-term goals and increase long-term brand awareness.
The future isn’t fixed: embrace foresight to prepare with confidence
Much of the data that marketers rely on today to make crucial decisions is inherently backward-looking. But in today’s VUCA (volatile, uncertain, complex, ambiguous) world, relying solely on past performance is a recipe for obsolescence. It’s crucial that you bake data-driven foresight into your marketing process to overcome the picture of paralysis painted by the NYT.
By incorporating techniques such as scenario planning, war gaming, and demand signals into your decision-making process, you can anticipate future challenges and opportunities and develop proactive strategies to achieve sustainable growth. Just as important, using these approaches help to demonstrate that marketing has an understanding of business drivers and the impact that pulling different levers can have on business KPIs. This helps marketers with another pain point – increasing trust with other senior stakeholders.
My advice is stop guessing and start growing with foresight. The future belongs to those who prepare for it.
Contact Claudia to discuss how to embed data-driven foresight techniques into your marketing organization.