Of the 76 C-suite executives surveyed, 50% reported being first-time CEOs with less than five years’ experience and no prior experience during an economic downturn.
This is primarily due to leadership structured around production logistics and operations, explained Evan Eckman, partner, Chief Outsiders. Instead, labor shortages, supply chain disruption and out-of-stock products require a redirection towards strengthening sales and marketing strategies.
“A lack of sales and marketing has certainly contributed to the lack of preparedness for those CEOs who were operations focused instead of marketing focused,” he explained.
Future proofing business via marketing technology and analysis
One common mistake Eckman found CEOs made was cutting marketing budgets while pushing operations strategies. The surveyed executives listed e-commerce, marketing planning and sales channel development in need of the most support, while 39% reported their marketing team having an average to below average understanding of new marketing technology.
Companies should expect marketing leadership to deliver an analysis on marketing investments “the same way an operations lead can on equipment and process,” using marketing technology that can essentially deliver a more transparent and comprehensive ROI.
Innovative developments in AI-driven marketing technology, for example, offer impactful results within a shifting economic landscape. As the fundamentals of marketing involve identifying and understanding consumer needs to match and persuade them to buy products and services, integrated AI apps can enhance these capabilities. Features like predictive sales-lead scoring in CRM, CRM-based sales coaching and e-commerce product recommendations, among others can improve a company’s ROI, according to Harvard Business Review.
It's reasonable to assume that the value driven marketplace will continue through 2028, added Eckman. “Shift the direction of your company to be successful in a value driven market.”
Value shopping is shaping the post-pandemic consumer behavior, retail market
As price continues to influence many Americans’ purchasing decisions, consumers are seeking private label products and shopping at discount/club stores more. Further, consumers are looking for more cost-efficient ways to feed their family so meal extension products are high on the list.
“As the market shifted, all the training and experience was focused on managing efficient operations instead of pivoting to a new marketplace where consumer needs have changed,” Eckman added.
The surveyed CEOs reported that their factories are currently running below an optimal 80% capacity due to continued labor challenges and growing consumer demand for more affordable private label products. However, the problem isn’t a supply chain problem, Eckman clarified. Rather, the marketplace has shifted to value over volume.
‘We entered a new cycle that was very disruptive’
“The companies that have been successful recognized that they needed to pivot the organization and address issues immediately and not wait for the marketplace to change. Business cycles last on average five years and we entered a new cycle that was very disruptive. The inexperienced CEOs look at the marketplace from a 2019 lens and were unable to recognize there had been a seismic change in the marketplace,” explained Eckman.
In the post-COVID period, labor costs rose approximately $0.12 an hour and with significant input costs being made, the marketplace was unable to adjust to these shifts.
Eckman suggests CEOs invest in their current employees with training, upskilling programs, cross-functional improvement initiatives, among others as offering more money and driving labor costs will ultimately cost the consumer and contribute to inflation.
The survey is available by request. Contact Chief Outsiders here.