'LEADS, LEADS, LEADS'... OH PLEASE!

Punch!'s Strategy Lead, Danny Philamond, challenges entrenched perceptions of B2B marketing to try and break some of the ineffective strategies that are dominating B2B thinking.

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THE CURRENT LOW BAR WITHIN B2B SHOULD BE SEEN AS A HUGE OPPORTUNITY

I recently saw a lovely piece of work that categorised individuals and businesses as either an Ostrich or an Eagle. The Ostriches were described as a ‘person or organisation failing to see or act upon the need for a sustainable growth strategy’ or more aptly as simply ‘head in the sand’. The Eagles as a ‘person or organisation with a far-sighted vision committed to sustainable behaviours and growth strategies’[1]. Despite these terms being used by a well-known wealth management brand discussing sustainable investments - the thought and analogy can easily be applied to B2B marketing. In B2B, there are a lot of Ostriches. Agencies, marketers, and brands that have their proverbial heads in the sand.

Why? Because the majority of work has drifted even further from the evidence on what’s most effective. B2B is stuck in a cycle of rational, tactical, and short-term strategies. Although this sounds like something to be saddened by, in reality, it’s exciting as the low bar within B2B is a huge opportunity to gain a real competitive advantage. If your entire competitor set is focusing on ineffective strategies, then you can behave differently in order to get ahead. The teams and brands who listen to the evidence first will reap the biggest rewards.

HOW CURRENT BEHAVIOUR IN B2B IS DRIFTING FROM THE EVIDENCE...

By ignoring the readily available evidence on the most effective, B2B marketers are making their own job harder and making it more difficult to produce results in the long term. It’s important to be very clear from the outset that the discussion of key effectiveness principles (or rules) isn’t just theory. It is evidence that’s been building for well over a decade from the likes of The Ehrenberg-Bass Institute, Les Binet, Peter Field, and more recently from The B2B Institute, and WARC.

Here are three key principles (there are many more) where current B2B marketing behaviour lags behind the statistical evidence on what is most effective at driving real business growth.

  1. Budgets need to be split between short term activation and longer-term brand building
    Data from IPA effectiveness case studies between 1998-2018 suggests efficiency is maximised at 46% budget allocated to brand and 54% to activation.[2] The majority of B2B brands assign most, if not all of their total marketing budgets to what would be considered short-term ‘activation’ tactics, and zero or barely any to true ‘brand’.

  2. Growth is driven by targeting audiences who aren’t currently in-market
    Professor John Dawes of the EhrenbergBass Institute in Australia has shown that just 5% of customers are in-market at any one time, so 95% are out of market.[3] Therefore the bigger opportunity is the people who aren’t currently in-market - the 95% of future buyers… or future revenue. Most current B2B activity is aimed at the 5%.

  3. The need to harness both rational and emotional persuasions
    In B2B decision making emotional considerations are equal to or more important than rational ones in 70% of cases.[4] Although rational arguments are best for those in-market in the short-term (it’s twice as effective at 20% to 10%), emotional persuasion works best for those who are out of market (2.5x the effectiveness of rational). Most B2B campaigns are focusing solely on rational creative and messaging to achieve sales goals in the immediate short-term

There are two common objections we hear when discussing this topic that it’s important to note:

  1. ‘The principles may apply to B2C but not to B2B’
    The evidence is based on solid and detailed research and is primarily rooted in analysing 10-20 years of case studies of the most effective marketing campaigns across all categories.

  2. ‘My [product, brand or category] is unique because of [generic statement]’
    These principles apply to B2B as well as to B2C - the ‘rules’ have been validated with B2B case studies to prove it applies in our discipline.

Therefore, while both objections are worth discussing, neither are ultimately supported by data nor evidence.

‘… BUT YOU WORK FOR A B2B AGENCY THAT DOES ABM?'

It may seem ironic for an agency that specialises in ABM to be discussing the need to balance short-term gains with brand building. However, ABM is a symptom of the wider problem, rather than the cause of it. As a strategy, ABM is rooted in a deep understanding of the audience and so produces incredibly relevant campaigns that reach people who are in-market right now.

We are working with a number of clients who have listened to the evidence and so are now balancing their highly-targeted ABM activity with more brand activity that is broad-reaching and highly creative. The objective of this activity isn’t in-market leads but is instead to be remembered and known in order to drive future sales. This is the direction that more B2B brands need to be going in.

HOW B2B BRANDS CAN CHANGE THEIR BEHAVIOUR

If a B2B brand came to us asking what they could do today to change, these would likely be some of our recommendations, knowing their main challenge is likely to be a lack of awareness or understanding of their brand:

  1. Be memorable - do something different that will be remembered by your audience, whether they are looking for a solution now or in two years time.[5] Why? Because the most effective businesses (whether B2C or B2B) are those that are remembered, and so come to mind when someone is ready to buy a product/service.

  2. Recalibrate your budget - of course you will need to generate leads now but, ideally, you should be assigning 40-50% of your budget to ‘brand’ activity. Why? This activity will be speaking to the much bigger proportion of your audience who are out of market. Plus, siphoning even a small chunk of your overall budget to activity that gets you more known by your target audience will also make your demand gen more effective in the long-run. It’s a no-brainer.

  3. Pick a creative idea that scares you - to be noticed in the short term and remembered in the long term you need to get people’s attention. Too many B2B brands churn out the same suite of content assets that get lost. Why? For points 1 and 2 to be effective you need to cut through with what are usually quite ‘lean’ media budgets. If the idea scares you it’s usually because it has an element of risk, so it’s bound to be different to what your competitors are doing.

  4. Quantify how many accounts are in-market - if you know how often your target accounts switch solutions then you can work out how many are in-market at any one time. If you don’t know the average deal cycle, then use 5% as a guide as to who’s in-market. Why? If you need a way to justify spending some of your budget on longer-term brand-building activities to the CFO, then having current and future revenue figures will help you to build the business case.

    Follow the steps below to get get to a number:
    1. Size up your TAM (right fit accounts you can target). Let’s say this is 300.
    2. Determine the average deal cycle. Let’s make this 5 years here.
    3. Work out who is in-market this year. If we have 300 accounts, and they switch solutions every 5 years, then around 20% are likely to be in-market in the next 12 months. So around 60 accounts.
    4. Divide by a typical campaign length. If you’re running a 6-month campaign that will reduce to 30. accounts that are actively looking during your campaign period (270 will be looking in the next 5 years). Worth remembering you are also fighting with all your competitors for these 30.
    5. Work out the current and future revenue opportunities. Multiply 30 and 270 by your average deal size to give you a figure for the revenue you can generate now, and what can be generated over the next 5 years.

BEING DIFFERENT AND TAKING SMALL RISKS IS EXCITING. IT ALSO WORKS

Despite the fact, B2B has drifted from the evidence on what is most effective for driving real growth. It’s a really exciting time to work in B2B. The fact most B2B brands play it safe and rely on the same channels, content, and tactics means there is a genuine opportunity to behave differently. By taking a relatively small ‘risk’ you can distinguish yourself from basically everyone else in your category.

The point of this piece is to challenge entrenched perceptions, push B2B marketers outside their comfort zone, and ultimately try to break some of the ineffective strategies that are dominating B2B thinking.  If you agree with everything in here then that’s great, let’s chat and do some great work together. If you don’t, then even more reason to chat as I’d love the opportunity to discuss your thoughts, and to try to challenge your opinion.

Reach out via: danny.philamond@punchabm.com


[1] Lombard Odier (2019) Building portfolios around Eagles to deliver superior returns for our clients. Available at: https://www.lombardodier.com/ostrich_eagle (Accessed: 28 October 2021)
[2] The B2B Institute, ‘The 5 Principles of Growth in B2B Marketing’
[3] Advertising effectiveness and the 95-5 rule: most B2B buyers are not in the market right now, Professor John Dawes, 2021
[4] The B2B Institute, ‘The 5 Principles of Growth in B2B Marketing’
[5] How Brands Grow: What Marketers Don't Know, Byron Sharp, 2010