According to the February 2014 edition of the biannual CMO Survey, optimism for the U.S. economy reached its highest point in five years. On a scale of 0 to 100 (with 100 as the most optimistic), the top marketers who form the CMO Group reported an average score of 66.1. This shows significant growth when compared to the February 2009 rating of 47.7, almost 20 points higher in fact. Furthermore, this optimism was shown across all sectors, from biotech to consumer packaged goods.
CMO optimism for the overall economy and for the marketing leaders’ own organizations are at their closest point in 5 years as well. This is significant, as CMOs tend to be more optimistic about their own companies due to vested interest and access to private information. While the difference between CMO optimism for the economy and their own companies was a 16.5 difference in February 2009, in February 2014 it is 7.1. This narrowed gap in terms of expectation indicates a more confident view of the economy overall.
At the core of this optimism trend are improvements in key customer metrics that point to increased spending and economic growth. Some of the metrics considered include entry of more new consumers into the market, increase customer acquisitions, an overall expansion of purchase volume, and boosted customer retention ratings. Additionally, the CMOs are predicting that customers over the next year will shift to a strong focus on product quality versus low price, hinting at a trend where customers are ready to spend again and not so focused on cost savings as the number one priority.
One of the main impacts of this increased optimism involves more risk taking on the part of small businesses. Over the next years, CMOs are expected their companies to spend an additional 11.1 percent on market development strategies, 11.5 percent more on product and service development, and 15 percent more on diversification initiatives. These strategies are considered much riskier than a simple market penetration strategic roadmap, which is actually projected to decrease by 11 percent.
Reference: Moorman, Christine. “CMO Optimism, Confidence, and Company Growth Strategies.” The CMO Survey, 2/19/14.