The $1.2 Trillion Hidden Cost Hindering Marketing Agility: Ineffective Communication

Success for marketers increasingly comes down to agility in adapting their operations. That’s more true now than ever amid an uncertain economic landscape and ongoing inflation that are evolving consumer and business demands. Brands face a multi-sided challenge: better engage audiences across more places, while finding ways to build in more efficiency and agility.

What many leaders do not realize is that one essential—and overlooked—factor is significantly impacting their ability to meet these goals: poor communication. According to our recent study with The Harris Poll, U.S. businesses lose an estimated $1.2 trillion annually due to poor workplace communication—or over $12,500 per employee every year. That’s the equivalent of over 5% of America’s GDP.

This problem is especially felt in functions like marketing that rely on consistent, clear, and engaging content and interactions. When communications falter, it creates immense costs for marketing organizations—eroding engagement with customers and prospects, creating inconsistent brand messaging, and hampering the level of productivity that’s now pivotal to drive growth.

How can CMOs and marketing leaders prepare their organizations for long-term resilience and growth? Let’s look at the opportunity that awaits by overcoming the impact of poor communication.

Meet New Customer Demands With Better Communication

The marketing function has undergone significant shifts in the past year, leaving leaders dealing with a range of challenges that make it difficult to focus on long-term growth. This explains why nearly three-fourths (73%) focused on low-risk, low-return strategies this past year rather than look to develop new markets.

On the customer side, the explosion of e-commerce and omnichannel spurred the need for marketers to engage audiences across an increasing number of touch-points. Managing this uptick was challenging enough, but in the wake of the pandemic and economic disruption, consumers and buyers now also expect more personalization and empathy from brands. This means marketers need to improve the quality and efficiency of interactions to capture customers and build loyalty.

Communication plays a direct role in the ability to meet these demands. For example, 1 in 4 business leaders reported decreased customer satisfaction due to poor communication, and 1 in 5 even lost business or sales. Beyond the direct impacts, improving communication also reduces organizational breakdowns that have ripple effects on customer engagement, satisfaction, and growth.

Reinvent the Employee Experience by Improving Communication

Marketing teams also face new challenges in staying engaged and aligned as the workplace becomes more fragmented and dispersed. In fact, nearly three-fourths (72%) of business leaders agree their team struggled with communicating effectively over the last year. Working across more locations and contexts creates more opportunities for disjointed interactions, impacting both productivity and the ability to deliver a compelling experience.

Most leaders recognize the need to better support employees; for example, the majority (57%) are prioritizing employee satisfaction and retention this year, even ahead of customer satisfaction. But what they may not realize is that communication is directly linked to levels of employee stress, morale, and turnover—presenting a significant opportunity to reimagine the employee experience. Improving communication with greater clarity, consistency, and empathy is imperative to instill confidence among employees and meet their evolving expectations.

It’s time for CMOs and marketing leaders to reinvent their organizations for whatever the next era may bring—and this starts with a foundation of effective communication. Communicating clearly and consistently reduces costly slowdowns, enhances the customer and employee experience, and drives the efficiency necessary to scale.

Addressing the Impact of Effective Communication

So where can CMOs start in evaluating the impact of better communication on their organizations? Here are three questions they can ask themselves:

1. What business outcomes are most critical in the coming year? (YoY growth, higher output/volume, lower costs, etc.)

2. In what ways are communication issues impacting these goals? (Slow or off-brand interactions, inefficient content production, inability to manage higher volumes, etc.)

3. What are the business consequences if these issues are not addressed? (High costs, trade-offs between speed and quality, slowed growth, employee turnover, etc.)

CMOs can no longer afford to ignore the cost of poor communication if they are to adapt and meet their goals this year. This is where technology can play a role—business leaders (88%) and employees (63%) alike wish they had better tools to communicate effectively, so investing in new AI and augmented tools and capabilities can be a first step to empowering employees across the board.

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The bottom line is that the cost of ineffective communication only continues to grow—but so does the value gained by overcoming it. As leaders rethink productivity and engagement in a changing landscape, investing in effective, efficient communication will be the catalyst of adaptability and growth.