We are all trying to make sense of the new world we inherited from Covid. But it isn’t just the pandemic that’s shifting society; other macro events like what to do about the unfolding climate disaster (fix it, but how?) add an important dimension and all of it influences the direction of CRM for the foreseeable future.
But a key question looms: Are we still too close to these events to be able to make sensible predictions about how and where we will work, buy, and sell in the years ahead?
There are layers upon layers of complexity and timelines to consider.
History is a guide, though when you need clarity, it can be inscrutable. For example, at the start of this century, in the dot-com recession, business travel cratered and Webex and other conferencing systems looked to make a killing disintermediating airlines and hotels when face-to-face meetings were called for.
Indeed, these pioneers in the market did well in the first few years after meltdown. Were Webex and its kin a success?
Business travel eventually recovered, and conferencing came to hold an important position even as tech companies began splurging on in-person events. It was only in the pandemic that new vendors like Zoom, Microsoft Teams, and Google Meet among others re-discovered and expanded the niche, a gap of almost 20 years.
So, it’s fair to ask what happens next in our market. I’ve accessed two recent reports for relevant analysis:
I also add my skeptical comments below.
My fundamental critique of both reports is that they may be right, but they are premature.
In both we are taking a good deal of primary data from the aberrant year 2020 and projecting a straight line from it into the future. Sort of like fortune telling — and if fortune telling is your idea of high science, you might wish to read something else.
Last year was indeed a crazy, traumatic, and out of proportion time; and while it is true that such times provide the inflection points needed to end and begin eras (see dinosaurs) the fact, at least in this case, that there are intelligent and wealthy humans pulling at least some of the levers should give us pause about drawing straight lines from past to future.
The human element can and does weigh alternatives, factors the costs inherent in any action, and then sets courses that might be counterintuitive.
Let’s begin with McKinsey, whose report says in part that “pandemic-induced changes in shopping behavior will forever alter consumer businesses.”
McKinsey says that “The implication is that brands that haven’t figured out how to reach consumers in new ways had better catch up, or they will be left behind.”
Well, okay, maybe.
This sounds like the desperation we heard about the end of brick-and-mortar retail during the internet’s first flowering. That was sort of true, but it took decades to roll out the infrastructure, not just at the corporate level but also in all the internet backbone technologies.
The result? Brick and mortar took a hit, some malls are emptying, and big retailers that were the mainstay of those retail oases are filing Chapter 11. But still brick and mortar persists, led by entrepreneurs with vision.
But let’s say that McKinsey is right, and we’re all going to do more shopping and working online in the years ahead — perhaps even most of it. Salesforce says, “Great! We have data to support this and the systems to make it happen.” They present a plethora of data culled from a survey of over 8,000 people in marketing from executives to worker bees. Some of the things they say include:
- Sixty-six percent of marketers expect revenue growth over the next 12 to 18 months.
- Ninety percent of marketers say their digital engagement strategy has changed [accelerated] since the pandemic began.
- Seventy-five percent of marketers say the pandemic has permanently shifted how they collaborate and communicate at work.
- Marketers expect a 40-percent increase in the number of data sources they use between 2021 and 2022.
- Seventy percent of CMOs align their KPIs with their CEO’s.
These statements are all good and important, but they would mean more if there was a sprinkling of end customer input to validate them. In other words, that’s the supply side argument, what about demand? As is, I would fully expect marketers to forecast revenue growth and to align with their CEO’s KPIs. But that’s their job so they aren’t unbiased.
Perhaps the thing I question most is how, in the middle of the pandemic, can anyone talk about a permanent shift? The survey ran in the May-June timeframe so one could be forgiven for being overly optimistic when it looked like Covid was on the run. But given what we know just weeks after the survey ran, would we still make the same forecast?
Here’s where the importance of intelligent people comes in compared to a more fatalistic outlook. There is a great deal invested in the old paradigm, as is always the case when one shifts. That’s why we wring our hands over being too early or too late to take advantage of market moves.
But consider all the commercial office space in long term leases that might become under-used, thus representing a drain on balance sheets. We coined a name in manufacturing industries: Rust Belt. What will we call it when tumbleweeds roll down the concrete canyons of major cities?
The push to digital marketing is not free. Significant investments in video, audio, and interactive content (just for starters) will be needed, and they’ll require new skillsets and different people to be added to the marketing cohort. Where will the money come from to support these jobs if not from reducing spending on rent and other hard costs associated with working from the office?
This can certainly happen, though at least some of it might have to wait until expensive leases run their courses. The result could just as easily be some years of stagnation like we saw in the 1970s, 1990s and after the financial crash of 2008.
I think the great tell here is this. The Salesforce survey says that “As marketing evolves, training is falling behind,” which almost proves the point. In a broad array of areas from content marketing to data science, employees give low marks for skills development. Fewer than half, say their organizations are keeping up with the need for training in many areas associated with marketing.
My takeaway from this discussion is that most people involved think there’s something here. I think they’re right, but there are also limits on what we can do immediately. So, look for the easy and reversible steps to take place over the next 24 months. Sure, we can work from home or anywhere else; we’ve got that down to a few cloud subscriptions and CRM vendors will like that part.
But we won’t know if things are serious until we see more signs of companies investing in retooling their employees, hiring new specialists, and businesses tackling the serious problem of making video and audio production and broadcast much easier.
Also, when we see a bubble bursting in commercial real estate because no one wants to pay those sky-high rents, then I think we’ll be on to something.
Lastly, keep reading those reports. They aren’t supposed to be perfectly correct; they are intended to make you think.