Businesses adapt to the ‘new normal’

UK businesses are adapting to the new normal of being positive in a pessimistic environment, expanding with cautiousness and looking for flexible working conditions in order to respond to sudden changes in tide.

According to the Marketing Confidence Monitor, run by the Chartered Institute of Marketing (CIM) and supported by Deloitte, despite consumer spending remaining low over the next three months and concerns over wider economic issues, companies are cautiously optimistic about their own performance in the next year.

Study findings

The study, which is conducted quarterly, seems to have revealed a ‘new normal’ for businesses, with 38% of respondents more confident in their business’ ability to meet its financial and growth targets this year compared to last year. Furthermore, there was an increase in overall confidence score of more than one and a half points since October 2012, demonstrating a positive outlook for 2013.

Upbeat business confidence is allied with a widespread acceptance of limited growth and static investment. Almost half (46%) of businesses expect marketing spend to remain unchanged over the next three months, and the vast majority of businesses are adopting low-risk strategies for 2013. Most marketing professionals are looking to target organic growth through their existing customer base, rather than planning any new marketing hires in the next quarter.

Anne Godfrey, chief executive of CIM, commented: “It’s encouraging to see that small businesses are pressing forward with marketing investment and jobs – critical for fuelling growth – but it’s clear that most businesses are having to adapt to prolonged periods of limited demand and reduced investment.

“At the moment there is a cautious optimism in organisations’ ability to survive in this harsh climate, but the forecasted decline in consumer confidence is particularly worrying: we’ll be watching the next quarterly update of the index keenly to see whether today’s relatively positive outlook can be maintained.”