Objectively, How Do You Know If Your Brand Needs a Reset?

(Classic emergency 1:1 between CEO and CMO re: continued post-cyber-monday softness, but transitioned to broaching the topic of a brand reset in 2024)

*we join as they transition topics to the reset*

CMO: I've been wanting to discuss something that's been nagging at me for a while now

CEO: talk to me

CMO: i'm concerned that the fundamentals of our business are weakening, even though we're hitting higher and higher revenue numbers

CEO: tell me more

CMO: i know we don't like to talk about it, but if we turned off our facebook ads and our promos, our revenue would fall through the floor. It's been getting progressively worse over the last 3 years, and I worry we're not acknowledging how big of an issue it is.

CEO: i acknowledge that's an issue. i'm not as close to the specific numbers, so what exactly do you mean that it's been getting worse over the last 3 years?

CMO: Over the last 3 years, the revenue coming from organic traffic sources on our online store have actually been steadily declining.

CEO: but we've been growing

CMO: yes, we've only been growing the revenue coming from paid channels. we've been spending ad dollars to fuel our growth. that's fine if the revenue coming from organic sources is also keeping up, but it's not.

CEO: i don't follow

CMO: we've been chasing so hard at these top line revenue growth numbers that i've allocated all of our resources (ad spend, creative budgets, etc) to driving highly-measurable short term revenue growth. this became a red flag for me last week when our facebook ads stopped delivering for 2 days and we had the two worst December week 3 days in the history of the company.

CEO: oh that's what happened?! i thought we had a bug blocking checkout or something. site was working fine?

CMO: yup - site was great

CEO: yikes. so do you now think our '24 revenue number is in jeopardy?

CMO: we can hit the revenue number

CEO: great!

CMO: but we'll just be kicking the can down the road.

CEO: what do you mean?

CMO: you know how we've been doing those P&L deep dives to isolate why our contribution margin hasn't been growing?

CEO: yes, but we've got big COGS improvements coming in '24 that will take that number up

CMO: unfortunately, my latest rev of the forecast has our marketing costs more than canceling out gains from COGS improvements. we can only lean on existing customers for so long.

CEO: so what do we do

CMO: two words...brand. reset.

CEO: i knew you'd say that. let's chat tomorrow about what this looks like, how we do it successfully, how we communicate it to the stakeholders, and what fixed cost changes are needed, if any.

CMO: it's the right thing, even though it's the hard thing. see you tomorrow.

*end*

(This is part 1/4 of the critically unaccalimed series of a once-epic brand realizing they've been chasing revenue to the detriment of overall brand desirability in the marketplace - something all brands experience. See links below for parts 2-4)

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