In a recent survey SBI conducted of nearly 150 CEOs, we asked how they anticipate commercial spending in 2023 relative to 2022 with a positive shift, negative shift, or no shift. Most revealed that they still plan to increase their commercial budgets in 2023, but with a more conservative approach by spending 50% as much as they did in 2022. This was consistent across Marketing, Sales and Customer Success.
While we see a trend in adopting a less aggressive growth investment strategy, as compared to ‘22, this adoption is dependent on a few key factors. Certainly, recessionary conditions are affecting investment strategies. Other contributing factors include raising compensation costs and a focus on retaining A-players in the face of The Great Resignation. For example, Marketing's budget increase in 2023 is anticipated to drop from a 10% increase to a 5% increase. The drop in budget increases specifically for Sales and Marketing shows that many CEOs are still emphasizing growth, but they are taking a more measured approach in 2023. High-growth CEOs understand that they won’t hit their targets by cost-cutting alone. They are reallocating savings from operating expenses, gained from a fundamentally changed work environment as virtual or hybrid, into go-to-market investments with a focus to accelerate growth.
Even with slightly cautious budget increases in the Sales and Marketing functions, this commercial investment signals to us that many CEOs remain committed to growth compared to what we saw in FY 2021. Rapidly changing macroeconomic conditions have not deterred the focus on what it takes to achieve sustainable growth. We will continue to monitor this as things unfold in the global markets.
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