- Q2 earnings provide a valuable data point on how your customers are weathering the downturn
- Earnings reports are a great way to get insight into your customers’ organizational needs
- Avoid getting overwhelmed by selectively sampling your audience to validate hypotheses or characterize trends for specific segments
“Hello darkness, my old friend.”
These are the words sung by Simon & Garfunkel over the closing scenes of the seminal film The Graduate. The protagonist chases his true love across California, steals her away from her fiancé at the altar, and hops on the next bus with her. As the couple breathlessly takes a seat in the back of the bus, a look comes over his face that seems to say, “Now what?”
This COVID-19 year can feel a lot like that epic chase. So many portfolio marketers have done a heroic job leading their companies through disruptive change, tracking changing buyer needs, rewriting messaging, rushing new campaigns to market, teaming up with sales, and generally braving the storm. And their reward? More uncertainty.
For many organizations, July and August will produce some of the most difficult corporate earnings reports in memory. Summer this year — usually a time between events and product launches to get a leg up on 2021 planning — will be just another several weeks of video chats and conflicting news. It’s easy to get mired in uncertainty, but good portfolio marketers know to listen to the market for answers. A good place to start is by turning earnings season on its head and focusing on the insights rather than income statements.
In April, my colleague Katie Fabiszak wrote that the first task for portfolio marketers in this time of crisis, after the initial response, is to reexamine their target audience and revise plans. That was good advice then, and it’s good advice now. As the market moves from response to rebuilding and on to recovery, each phase will look different and marketers must recalibrate their target audience. Marketers should now look back at the assumptions they made in April and treat them like hypotheses. Were they borne out in Q2? What do forecasts look like for the rest of the year?
One of the most common questions we get from portfolio marketers is what signals they should be listening for to understand when their buyers are coming back. Barbara Winters and Katie Fabiszak presented a great session at Summit this year on advanced data-gathering techniques for buyer insights. One thing to keep in mind is that buyers describe their needs in several dimensions: their individual needs to get their job done, their departmental needs, and their organizational needs. Quarterly earnings can provide some helpful insights into your buyers’ changing organizational needs.
To get the most insight out of corporate earnings, consider the following guidelines:
- Sample scientifically, not randomly. The idea of mining earnings reports for audience insights can be daunting when we consider the size and breadth of our audience. But marketers don’t need a representative sample to gain insights. Sample key customers in key industries that are changing most quickly, such as travel, transportation, healthcare, and collaboration. Are there segments you expect to be insulated from change? That’s an important hypothesis to validate as well. The research community calls this “purposive sampling” — using subjective criteria to generate insights about a specific characteristic of the population — and it’s a valid method to use.
- Normalize for the new normal. Look at earnings reports in context. Start with a set of expectations, then weigh the report from a specific company against those expectations. For example, a provider of marketing technology might look for insights on marketing spend at its client segments. Consider that Forrester has projected that companies on average will spend 28% less on marketing by the end of 2021 and determine whether your targets are under or over this number.
- Partner with sales. I once got angry at an account manager when we were nearly late for a client meeting because he was checking his portfolio on his phone. He explained he wasn’t looking at stocks — the client had just reported earnings. We spent most of the meeting talking about how to help our champion respond to the new direction of the company. I apologized profusely to the account manager and learned a new technique. Your account managers know their customers intimately and know how their markets work. Partner with them to review earnings of key customers, or bring them a sample of earnings insights — positive and negative — and work together to identify the opportunities and challenges that will define your go-to-market strategy in the second half of the year.
- Go beyond the 10-K. Earnings reports are formulaic and necessarily terse. You may find better insights from mining the transcript of the earnings call. Market analysts try to tease out new numbers for their models — but often get more qualitative responses that can be very telling. On earnings calls, companies are likely to speculate on the dynamics of their market that are expressions of their organizational needs. For example, in Forrester’s Q2 conference call, the executive team revealed that although we expected good attendance at our online events, that revenue would be 20 cents on the dollar relative to in-person events. That’s a perfect expression of our organizational need for a virtual events platform provider to pursue.
In times of uncertainty, portfolio marketers need to look for every opportunity to get real data about the direction of the market. With buyer needs changing so rapidly and buyer moods subject to the evolving forecasts of different regions across the country and around the world, organizational insights are likely to be more stable indicators of market direction. Listen to what they’re telling you and you’ll be homeward bound.