While it is true that in their early years, businesses can do extremely well without brand-building, eventually most businesses hit an inflection point when growth slows, and the time comes to start investing in advertising to ensure further organic growth.
Until now, data relating to how a brand can drive growth in the B2B market has been limited. To address this need, The B2B Institute, a think tank funded by LinkedIn partnered with the world’s leading thinkers on brand effectiveness, Les Binet and Peter Field, to present their findings on the core principles of B2B marketing. The principles outlined below provide a summary of the key points highlighted in this think tank supported with our additional industry-led observations.
- Invest in share of voice
FINDING: Investing in share of voice (SOV) is a method that is widely employed in B2C, and it now looks as if it will work in B2B too. In short, the principle is rooted in setting a brand’s share of voice above their share of market (SOM). The rate at which a brand grows or shrinks tends to be proportional to its “extra” share of voice (ESOV), defined as the difference between SOV and SOM.
OPPORTUNITY: This offers businesses that invest in advertising a useful rule for setting budgets; set the share of voice relative to market share targets using the ESOV equation; then estimate what spend is likely required to achieve that share of voice.
- Balance brand and activation
FINDING: In B2B, brands should balance their budget between long-term brand building and short-term sales activation (e.g., lead generation) with a 45% brand /55% activation split. On the one hand we have sales activation (any activity that aims to get an immediate response: usually a piece of information, an offer, or a performance claim). On the other hand, brand building usually works on an emotional level to create long-term memories and associations that continue to influence purchase decisions long after the advertisement has been viewed.
OPPORTUNITY: While sales activation is good for short-term selling, and ROIs can be high; brand building excels at driving long-term growth. Communications plans should therefore balance sales activation and brand building.
- Expand your customer base
FINDING: It might seem that there are two ways a brand might grow – either by
gaining more customers (increasing penetration), or by selling more to existing customers (increasing loyalty). Many think both strategies are equally effective but the data suggests long-term growth depends on expanding the customer base, rather than trying to sell more to existing customers.
OPPORUNITY: Although the data suggests that existing customers should also be targeted to reinforce their choice, the implication of the study is that communications should primarily be targeted broadly to new prospects and their influencers. At BDB, we operate on the principal that B2B target audiences might be quite a small group, so media choice should reflect the stakeholders as precisely as possible. Brand targeting might also include those who are not yet in a buying role, but whose career paths may soon put them there (such as university students).
- Maximise mental availability
FINDING: In B2B, campaigns that build ‘mental availability’ (the extent to which the brand comes readily to mind in buying situations) tend to be more effective and successful.
OPPORUNITY: Even if B2B customers are more rational, the data suggests that mental availability still matters. Campaigns that aim to increase share of mind are much more effective, and the more famous they make the company, the better the business results.
- Harness the power of emotion
FINDING: Emotional campaigns (those that try to make prospects feel more positively about the brand) are more effective in the long term than rational campaigns (ones that try to communicate information).
OPPORTUNITY: Rational persuasion works well for short-term sales activation because people who are actively buying find product messages useful in helping them make more informed decisions. But long-term brand building requires a more emotional approach to capture customers attention before they reach the decision-making phase. These customers are much less interested in product information at that moment, so they either glaze over product messages out or quickly forget them. A balanced campaign will therefore incorporate both rational and emotional messages.
Did you know that 73%of millennials are involved in B2B purchasing decisions?1
The next two principles look at how to capture the next generation of B2B buyers:
- Find your brand purpose
FINDING: According to a study by Accenture, 80% of people say purpose is at least as important as experience and younger generations increasingly want brands to make them feel a part of something bigger.2 There is a growing recognition that businesses exist within society and therefore should take responsibility for the outcomes they produce, both good and bad. The shift in business mindset of “doing less harm” to “doing well through doing good” — is increasingly of interest to investors making it a priority area for growth.3
OPPORUNITY: Brand purpose can be a source of much-needed emotional relevance for B2B brands, communicating societal benefits that carry more meaning than product functionality. Purpose answers the question, “What would the world lose if your company disappeared?” It should also take into consideration what a company can genuinely stand behind and what can be and infused in the organization’s business model.4
Externally, customers want to work with partners that uphold their personal values, whereas internally, employees expect their jobs to bring a significant sense of purpose to their lives.5
- Communicate with authenticity
FINDING: Authenticity is rooted in a brand’s commitment to making an impact. As transparency becomes increasingly important, companies that choose to have growth at any cost are no longer universally tolerated.6
OPPORUNITY: Being open and honest in B2B marketing allows buyers to get to know and trust their potential new partners. In B2B this means being transparent about your products and services and not overpromising – therefore highlighting strengths without downplaying weaknesses.
- Set bold growth goals
FINDING: The all-too-familiar approach to setting growth targets—taking last year’s figures and adding or subtracting a few percentage points has always been counterproductive. Now, the pandemic has rendered year-on-year comparisons meaningless.7
OPPORUNITY: Changes in customer sentiment, competitor behaviour and market conditions will inevitably threaten to throw growth plans off course. Having the means to measure progress systematically is therefore a major asset to allow maximum impact.
Pursuing growth can be challenging but the ingredients for effectiveness – high share of voice, broad reach, high mental availability, emotional brand building and rational activation should help tilt the odds in your favour – especially if supported by setting bolder growth goals and using purpose and authenticity to attract the next generation of B2B buyers.
References
[1] https://madewithmerit.com/millennials-make-73-per-cent-purchasing-decisions-b2b/
[2] https://www.accenture.com/us-en/insights/interactive/business-of-experience?c=acn_glb_businessofexperlinkedin_11652973&n=smc_1120
[3] https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/help-your-employees-find-purpose-or-watch-them-leave
[4] https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/more-than-a-mission-statement-how-the-5ps-embed-purpose-to-deliver-value
[5] https://www.gartner.com/en/articles/employees-seek-personal-value-and-purpose-at-work-be-prepared-to-deliver
[6] https://www.ft.com/content/a84647f8-0d0b-11e9-a3aa-118c761d2745