CMOs Optimistic; Quality Trumps Price

CMOs are much more optimistic about the U.S. economy than they were 6 months ago and expect marketing budgets to increase, according to a recent survey conducted by Duke University (Fuqua School of Business) and the American Marketing Association (AMA). The “CMO Survey” conducted in Feb 2012 surveyed 269 B2B and B2C marketers online, found marketing budgets were expected to increase 8.1% over next 12 months. Budgets were expected to rise at a higher rate for B2B companies than for B2C companies.

Marketers were also asked to rank their customers’ top priorities. The number one customer priority was quality, cited by 26.3% of respondents, followed by services 21.4% trust 18.9 and low prices 16.4. Six months ago (August 2011) when the economy appeared to be weaker, low price and quality tied for first place, followed by trust, service and innovation. Christine Moorman, Professor and author of the study noted when economy is tightening up marketers expect customers to care about price. In this reversal, price became less important and services went up.

Listen up marketers: it's never all about price. Competing on price is a short-term strategy that will inevitably fail. There will always be a cheaper competitor. Quality is a better long-term strategy. It’s hard to beat better, in any economy.