B2B Brand
Marketing Guide
B2B marketing – head or heart?
Before we define a best-practice B2B marketing strategy, we have to consider the psychology that drives business buyers, and how they make decisions. Whether it’s head, heart, or a combination of the two, understanding what motivates our audience will help us find the right balance of brand advertising and performance marketing tactics.
The myths of B2B brand marketing
People are emotional creatures. That’s why brand-building appeals to consumer audiences so successfully. People become so invested in their favourite brands, from cereal and fizzy drinks to phone networks and operating systems. But what part does emotion play in B2B marketing? Let’s explore some common misconceptions.
1. Business buyers make rational decisions. Right?
Wrong. People don’t become rational the moment they step into the office. When we consider the emotional perspective, it’s clear that purchasing decisions are made by buying committees with a shared, primary concern: how will I be judged on this decision?
Behavioural science teaches us that this worry is the shared, unspoken driver. The rational considerations are used to justify decisions. But everyone on the buying committee knows that if they engage a well-known brand and things go wrong, the blame will fall on that company. If they choose an unknown brand, the blame will fall on them. Choosing a strong, big-name brand takes the risk out of this decision.
2. Sales activation or performance marketing is the most effective way to measurably grow a B2B business. Right?
Nope. Product/service-led companies tend to view marketing as ‘the price you pay for an inferior product or service’. Sales-led companies are driven by short-term sales targets, and they want leads. Now.
While many B2B marketers recognise the commercial potential of longer-term brand building, they face an uphill struggle to make their case within the organisation.
But the 5 Principles of Growth in B2B Marketing report empirically proves the business case for longer-term B2B brand-building and its impact on growth, by demonstrating:
- B2B brand building increases ‘mental availability’ and ensures your brand enters the buyer’s consideration set.
- Effective brand campaigns reach every buyer in your category.
- Creative brand campaigns that capture the attention of the head, heart and guts are delivered consistently over time, growing significant sales in the future, not just in the short-term.
- Increasing loyalty does not significantly add to growth, but customer acquisition does.
3. Once our brand is fairly well established, we should shift the focus to performance marketing. Right?
Wrong again. Performance marketing (sometimes referred to as sales activation or lead generation) targets the 5% of prospects who are in-market at any one time.
Brand advertising primes the remaining 95% to ensure your business is top of their list when they enter the market. It takes consistent effort to keep your brand front-of-mind for this majority of people, so that you’re on their list when they move into that 5% group.
5 Principles of Growth in B2B Marketing shows that the best performing B2B brands have an optimal balance between long-term brand-building and short-term sales activation.
Head vs. heart
So we know the driving force behind B2B decision making, and we’ve got the data to back it up. But is it rational or emotional? The answer, according to psychologists, is that we’re all human. And our thought processes follow the same basic patterns.
One of these is our tendency to use mental shortcuts to reach a decision.
Nobel Prize winner, Daniel Kahneman, famously put it this way:
“Human beings are to independent thinking as cats are to swimming. They can do it, but they prefer not to. The brain is largely a machine for jumping to conclusions.”
So how does that help us narrow down our marketing mix?
Balancing brand strategy and performance tactics
Sales activation focuses on an immediate response, and is generally a rational sell, featuring a piece of informational content, an offer or a product/service feature capable of generating a cost-efficient response.
It’s tightly targeted at prospects who are in-market with an intent to purchase, and designed for simple, quick responses. Sales activation is great for short-term lead generation and delivering a directly measurable return on investment (ROI). But it’s unlikely to be memorable, so the effects are short-term and won’t contribute to long-term growth.
In contrast, brand building drives long-term growth, with its effects lasting longer and accumulating over time.
It takes creative impact at a ‘head, heart and gut’ level to create a lasting memory that influences buying decisions long after the adverts run, with a reach that’s much broader than sales activation campaigns, targeting the whole of a market, and its effectiveness relying on repeated exposure. Image source: Binet & Field, 2013.
The timeframe for any brand-building to take significant effect, and pass the sales activation peaks shown in this graph, is typically 5-6 months. This is important to note and will help manage expectations with the board and C-suite.
A real-world example from P+S
Not convinced? We recently decided to test this theory out for ourselves, using the website data of one of our clients. And the results were pretty impressive.
Not only did we find that brand traffic – both direct and brand search – built consistently over time in line with their brand building activity, but we also found that the conversion rates from website visits to meeting requests and paying clients was 50% higher than any other traffic source.
And if that wasn’t enough, we also discovered that in territories where there is low brand awareness the conversion rates from lead generation campaigns increased over time as the effects of our brand building efforts kicked in.
Key takeaways from this chapter
- Performance marketing (sometimes referred to as sales activation or lead generation) targets the 5% of prospects who are in-market at any one time.
- Brand advertising primes the remaining 95% for when they enter the market.
- B2B brand building increases ‘mental availability’ and ensures your brand enters the consideration set.
- Choosing a strong brand de-risks the decision for a B2B buying committee.
- Brand building campaigns will only start to show shifts in your brand’s equity after 5-6 months of activity.
- In B2B, the optimal budget allocation is 46% for brand and 54% for sales activation.
- Brand equity is treated as part of the company’s long-term value, and is accounted for as an intangible asset in the company’s ‘above the line’ balance sheet.
- Lead generation campaigns are accounted for in the P&L, with a short-term spend versus cash-flow focus.
In B2B, the optimal budget allocation is 46% for brand and 54% for sales activation.