This year, driving sales is in and brand building is still out.
Those are among the findings of an exclusive BtoB survey of 422 marketing executives, which revealed that while b-to-b companies appear ready to boost spending in 2004, they generally will do so in an effort to produce short-term, measurable results, such as driving sales.
BtoBâs 2004 Marketing Priorities and Plans Survey, which was conducted last month via e-mail, found that to boost sales, many marketers are choosing to communicate directly with customers and prospects. A majority of these b-to-b marketers plan to increase spending on e-mail marketing and direct mail, while holding steady their investments in print, broadcast and events.
In the study, 48.2% of respondents said their advertising budgets would increase in 2004 compared with 2003. But 36.1% said their ad budgets would be flat in the same period. Only 15.7% said their ad budgets would decline this year.
These findings jibe with the 2004 marketing plan of Kimberly-Clark Professional, a unit of Dallas-based Kimberly-Clark Corp., which supplies Kleenex and other paper products to businesses. Doug Sutton, the divisionâs director of segment marketing, said the companyâs marketing budget will be flat this year, adding that KC Professionalâs primary marketing goal in 2004 will be customer retention.
KC Professionalâs marketing objective placed the company with the 7.1% of respondents who said that customer retention was their primary goal. Driving sales, cited by 31.7% of respondents, was the most common marketing goal for 2004. A close second was customer acquisition, which was cited by 28.6% of respondents. Brand awareness was third, with 15.7% of respondents saying that it was their primary marketing goal.
Sutton said the companyâs media decisions for this year will be driven by its focus on customer retention. Like 45% of respondents, KC Professional plans no change in its print spending. In BtoBâs survey, 37% of respondents planned to increase spending; 18% planned a decrease.
"We spend next to nothing on print," Sutton said. "We had a pretty robust schedule five years ago, so we cut back for all the same reasons that everyone has: How do your understand what your ROI is on print? And no one seems to be investing for the long haul in brand building anymore. Itâs all about getting results sooner rather than later."
To generate these short-term results, Sutton plans to use direct lines of communication with customers: online, direct mail and telemarketing.
Like 62% of survey respondents, Sutton said he plans to boost online spending. The company will also increase its spending on direct mail.
In BtoBâs survey, 54% of respondents plan to boost direct mail spending; 38% planned no change and 8% planned to decrease spending.
In terms of staffing, KC Professional was in line with the 30% of respondents who plan to increase marketing department headcount in 2004. But the majority of respondents (64.2%) said there would be no staffing changes. Only 5.8% plan a headcount reduction.
The marketing approach of Liftomatic Material Handling, a small manufacturer in Buffalo Grove, Ill., also had much in common with other survey respondents. It plans to up its budget in 2004 by as much as 12% in the U.S., according to the companyâs VP-sales, Todd Berg.
Like many survey respondents, Liftomatic plans to focus on customer retention. "We call it âgold mining,â mining from our existing customer base," Berg said. "We try to up-sell existing customers on new products and new ideas. Itâs less expensive than going out and developing whole new customers."
To this end, the company will boost its e-mail marketing expenditures by about 25%. It will also increase its direct marketing effort by as much as 7%. It plans to increase its print spending, too, but only because trade publications were able to provide targeted programs to demographics Berg covets.
Like Liftomatic, Software giant Computer Associates will keep its broadcast budget flat, according to Mike Paradiso, CAâs media director. The difference is CAâs will hover in the tens of millions of dollars, while Liftomaticâs will remain at zero. CA also plans to boost its 2004 print budget and its Web spending, particularly in sponsorships.
BtoBâs survey of marketing executives suggests optimism about the economy. Perhaps the surveyâs most striking finding is that 84.3% of respondents are increasing or keeping their ad budgets flat. They would only do that if they were confident that their customers were ready to spend, too.