The Principles of B2B Marketing

The Principles of B2B Marketing

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Hello. And, welcome, to the first ever episode of. B2b, edge a, hit, new TV show that some critics are saying maybe, the next game of Thrones a lot of critics have been saying that I'm. Peter of house Weinberg, this is my colleague John John, would you like to introduce yourself, yes, John Lombardo, from, the b2b, Institute, it is true we have many critics have been saying that this is on the top didn't say TV shows of the upcoming slate I'm, playing Jon Snow in this game of Thrones reprisal. Wonderful. So. I think we're gonna start off with some boring logistical. Details, always a good idea, as. We walk through the research, some of you might have questions, those. Symptoms are perfectly, normal if you are joining through slide oh you, can submit your questions on the right side of the console, if, you're tuning in from LinkedIn live just, tell us what you want to know or what you think and we'll, do our best to, answer a few questions at the end of the show and we'll log on to LinkedIn afterwards, to answer any questions that we miss we. Will be sharing, the. Slides after. The presentation. And if you want to share any of the ideas we would love that feel free to use our hashtag hashtag. B2b, principles, also. Don't forget to take the survey at the end of the show we'd, love your feedback and finally. If you like what you learned today you can download the full white paper on our beautiful, website b2b, While. You're there we would be honored absolutely, honored, if you would consider signing, up for our newsletter, and if. You really just can't get enough of this sweet, sweet content. Please feel free to connect with me and John on LinkedIn we, would love to hear from you, okay. Now we can get into it let's get into the research, today. Well we really want to talk about is growth and the b2b marketing strategies, that maximize. Growth. We're. Going to start off on a negative, note which is always a good idea, so I would say the marketing, function, is in, trouble the scope, of the role has contracted. From, four p's to, 1p and in many b2b organizations, marketing. Is seen as a mere sales support function. So I think you could say that whatever we've been doing, for the past decade, it hasn't really been working and, maybe, now would be a good time to try something new maybe, it's time to, reevaluate the, fundamental. Principles. Of marketing John. And I honestly believe that marketing, is the single most important, job in a business and with the right principles, in place maybe. Marketers, can become the growth engines, of all companies. But. Where would we start what, might these new principles look, like well to answer that question we, commissioned, some new research, from, Lisbon net Peter fields, in the IPA now. Some of you might be familiar with these names the, IPA is a trade, organization. In the UK and it sits on top of this massive, database. It's 40, years of, econometrics, data, on hundreds. Of brands, lezbo. Net and peter field have spent well over a decade, analyzing. This data to determine what, marketing, strategies, correlate. With, the most growth, and when I say growth keep, in mind I'm not talking about click-through. Rates or engagement rates I'm talking about market. Share revenue. Profitability. What. Banette and field call very, large business, effects, honestly. This is some of the only research in our industry, that links marketing. Inputs with business, outputs, which is one reason why banana fields research is having, a pretty massive impact, all over the world now. Historically. Banette and fields research hasn't, distinguished. Between b2b and b2c marketing, but. Net and field had never done a b2b cut of the data until. Now until now, I am overjoyed to, announce to you that we here at the b2b Institute, have, commissioned, the first-ever, cut. Of the, b2b data from banette and field this is really a seminal, moment in human history so, I'm so glad you, could join us, but.

The IP ADA data isn't, the only data that we're going to reference today we're also going to leverage another, type of data, a very, underrated. Type of data called, common, sense which, is often in short supply, these days. You're. Going to see about a billion. Charts, and graphs today but I really want to encourage you to be skeptical, don't, just trust the data think, about, the ideas, reason. Through the principles, and I think what you'll find is that all of these recommendations make, a lot of sense. Even, without the data so. Now let's discuss the principles of, growth in b2b what. We want to prove today is that the key to growth is balance. The problem. With modern marketing, is that it's unbalanced. We are overly, invested in a narrow set, of strategies the, strategies, you see here in red we. Need to consider the other side, of the equation the, strategies, in green we, need to achieve a, better balance, between long, and short reason, and emotion broad, and narrow targeting, and, now I will turn it over to my esteemed colleague, John is going to walk us through the, first principle. John. Well it was both. Optimistic. And pessimistic your, insurance going, for Ellen's now just gonna own stable balance rather through my favorite TV on the radio song here comes trouble, for. Marketers though yeah but the. Good thing is we have some some work here to help people, get out of trouble, so, remember, we're talking about balance, here we're, talking about short-term growth and long-term growth and that's what the first principle covers now. In our opinion this may be banette and field the biggest idea the, idea there are two types of marketing that require different approaches, to creative, and distribution, and measurement, one. Of the central mental. Models that banette and field offers explaining, that there are in fact two types of marketing there's what is called sales activation, and what's called brand building now, the first type of marketing is called sales activation, you can see a short explanation on your screen here sales, activation, specializes.

In Delivering short-term. Growth. And. Sales a commission of course is producing quick increases, in sales or leads right stuff that you get right away however, it's important to note that those, results often decay, just, as quickly as they arrived and so in the end activation. Campaigns really don't produce long-term. Results they really produce short-term results, of. Course in b2b we generally, call this type of marketing, lead generation. Or demand generation but. That's probably not an accurate, description of how this process actually works I think. One of the important things to understand is that sales. Activation, doesn't create demand it captures, demand but doesn't create demand, now. The second type of marketing is what we're calling brand, building, you, can see here on the screen brand building now brand building is different it specializes in delivering long term, growth. However, unlike. Sales activation, brand. Building not only delivers long term growth but also short, term growth this, represents, an interesting asymmetry. Brand. Building delivers both, short-term growth and long-term growth know primarily long term growth whereas. Sales activation, principally, delivers short term growth I always like to say if you were going to do just the one I think you would do brand building because it gives you the short and the long where, as sales that activation, really just gives you this short the. Fundamental, value, of brand, building really is that it reaches future, buyers creating. Future demand and ensuring, a durable, stream of future sales and profits, because. We must remember most sales will occur well into the future, and that's why over time brand building really as the only type of marketing that reaches into the future brand. Market becomes the biggest driver, of business, growth now. Fortunately you. Don't have to choose between, brand, building and sales activation, my, mother always told me as a child you can't have your cake and eat it too turns. Out marketing that's not true turns out you can have your sales activation, and eat your brand building too that's, just how catchy good, right it's like and people are gonna start saying that my mom's after you're watching this so this is great yeah it's mom their, job and. In general what unites key need to know from the NED field is simply they let you do both in fact they've coined to say to the 6040 rule which we'll get into but sensible. And profitable, marketing is really about balancing, short and long-term growth I think we can all agree balance, is good now. Sales activation, as mentioned. Maximizes. Short term growth and brand, building as long-term growth, these. Have to be measured and managed, differently we get into the different ways to measure and manage later in the webinar but just keep in mind that mental model of sort of sales activation, brand building now. Let's, get to the second, mental model from Benenden field which is called the 60/40, rule and. In fact if you look at the early banette in field work it's. A lot like Picasso's early work and they. Actually, this idea of the 60/40, rule the 60/40, rule stating that in b2c, marketing the. Companies which grow the fastest in the short term and the long term spend. 60 percent of their budget on brand building and 40%, of their budget on sales activation. Which is what you see on the screen here, well. As Peter mentioned we did a cut of this data for b2b this is the first time anybody's, cut the data for me to be we, discovered the balance is slightly different I would call it the 50/50. Rule now, why the difference, well. Generally, speaking sales. Activation, is harder in b2b than it is in b2c, and of course we see that through the length of the b2b sales, cycle, they think about the b2b sales cycle there are dozens of touch points required, to close a deal there are many more stakeholders, that are involved in that decision, and of, course there may be functional. Product, benefits that need to be communicated to you and your team and your bosses if. You give a really simple example it's, the difference between b2c, and b2b coca-cola. Doesn't, need to test spend time explaining the functional, benefits of soda now, Microsoft on the other hand needs, to put in a lot more work to close a big deal a, multi-million.

Or Multi-billion, dollar IT contract. This. Isn't to say by the way that activation. Is more valuable it's just to say that it requires more resources. There. May be some small businesses, and slow entrepreneurs. On the phone they'll. Be delighted to know that we didn't just look at the, blend is it 50/50, or 60/40 we actually looked at it by maturity, of business and, what the data shows is something interesting it shows that early growth companies often should, spend more money on short-term, sales activation, and they should do so for two reasons number one, small. Businesses, they, just gotta make money and keep the lights on make payroll you know make products, that's. One of the reasons right just keep the lights on number two it, turns out there's a novelty, effect at play often for new categories, and new products where, buyers will try the new proctor tracted to the novelty and so in some sense early products, benefit from the halo of being a new brand with novelty, however, as. Companies get bigger and as, the novelty, fades companies. Must think longer-term and they must invest in brand building which, critically reaches future buyers not just current buyers and. They must use that of course brand oak - then charge higher prices which is another idea we, talked a little bit about in the future. So ultimately this. Is another way to think about you know how to grow by size of business a, lot. Of mental models so far we, got another mental model for you here which. Is the funnel the funnel is maybe the well most, well-known construct, in marketing and certainly in b2b marketing and it generally talks about the top of funnel and the bottom of funnel as you can see we just flipped the funnel we, think it's actually helpful if you flip the funnel on its side and think, more about growth over time what. We talk about here as short-term, growth and long-term growth now, the mental model we like isn't top of funnel and bottom of funnel which, some people ridiculously, call tofu and Bo foo I don't like that I'm more of an in market and out of market marketer, myself now, why, do we like this construct, of n market out market, we. Like it because we believe it's more customer, centric in two specific, ways so, number one you have to remember your customers, don't think of themselves being in the brand building phase or, the sales activation. Phase that's what you think of as the market it's not what the customer thinks the, customers either I'm in market, to buy something where I'm out market and not gonna buy anything so. That's number one be more customer centric in your framing in market out market now, there's a second reason that's really important as well marketers. Actually have two customers not just the customer we just discussed but a second, customer an internal, customer, I like. To call that person finance, the CFO the person who really runs marketing, now. We, believe that in market out market, maps more closely to how CFOs, think as well because. CFOs think of current, and future cash flows all, stocks. And bonds are priced by Wall. Street in the markets, and, what they do is they look at your cash flows over time they discount, them back to the present and then they say okay they have disciplines.

In The future so, I'm gonna give them the price of one hundred and forty dollars on the market and in fact most of the, money that underpins the current stock price something like eighty percent of the cash flows underpin your current stock price are generated, ten plus years in the future and the. Only kind of Marken that reaches people well into the future priming. Them well before they need to buy to, buy your brand is out market, it is, brand, building, that's, the kind of marketing that we think maps not just the way the customers think but also ultimately the CFO's, think and, really, if you just think about it most of the people that buy your product over time they exist well into the future the people they're gonna buy this quarter that's a small percentage of all people they're gonna buy well into the future let's. Just give you a very crisp example, let's say you are buying a cloud computing solution, there's, gonna be very few people are gonna buy just, this quarter but, if you think about the rest of the year and then your two year three year four year five is way more buyers in the future so, as I said it follows, that you'll want to run brand-building which reaches a broad audience and then gives you the profits you want durably, over time. You've. Got to recall of course that these are two different types of buyers and market is very different from out market and, they need a very different approach when it comes to creative, distribution, and measurement that's. What we get to here now we're. Thinking about creative, if, somebody's in market give them rational, messaging you know 15, minutes to save 15% give, them that rational, message however, if somebody's not in market and won't be a market for years they're not gonna pay attention to a rational message, they. Don't care about saving 15%, because they're not gonna buy anything what they want instead is a creative, entertaining. Emotional, story something, like you see from Geico and all of its Gekko advertising. Now. When thinking about targeting, if somebody's in market sure have tight targeting, to people give. Them a rational message however, if, somebody's out market you don't want narrow targeting, it's. Just not gonna work unfortunately, the reality is that future buyers they, could be in a different job or industry or seniority, and so if you tightly, target you will exclude, them you won't reach them and, so you want actually broader targeting, we were trying to reach future buyers with brand building, and. Then finally, you. Want to think a little bit about sales. Metrics right and. Sales metrics are important, right they are ideas like cost per lead you. Know it's really coming down to a specific number this, is when you're thinking about measurements, this specific, number you care about that short-term cost.

Per Lead lifetime value now, when you're thinking about brand. Building it's more about memory metrics well into the future so, you don't want to use short-term metrics to judge the financial, effectiveness, of long-term brand, building that's a mismatch in time horizon, it is a mismatch in customer, experience, so, when you're running brand, campaigns, to reach out market, buyers you want to use memory metrics such as brand salience, which I love it's got a very mathematical take, which is the likelihood, of a brand being thought of or noticed in a buying situation, there's just kind of like a probability, to that idea that we should be using I encourage. You to read more about brand salience, it's an idea we don't cover in great depth here but it's a fascinating, and wonderful way to make your marketing more customer centric and. Critically. More financially, effective, so. That is balancing, long and short term growth Peter what do, you say about this that was so powerful I mean when you flip the funnel like that I couldn't. Believe I could the finance, people the CFO is watching. They were gasping, I could hear them from here in the studio's incredible, I challenge, you I, challenge you, to. Flip the funnel yourself yeah okay well yeah I can I can you sure they're alert about to flip the funnel again in our second, principle, Fame. Verse awareness. Which explores, the balance, between different. Brand, marketing. Goals, what. Is the purpose, of a brand that's a big question in marketing, today everybody's, talking about it on the conference, circuit let, us give you our favorite answer it's a very simple cynical. Take the purpose, of a brand is to, help customers, make fast, and easy decisions, that's, it brands. Are just mental, shortcuts. Whatever, brand comes to mind quickly in, a buying situation. Is the brand we choose the, technical, term for this is called, mental, availability. Defined, in this lovely quotation. From Professor Jenny Romani AK one, of the greatest marketing minds of our time highly. Recommend, to checking out some of her books now. Most brand marketers, are very focused, on increasing, awareness that's, the goal for most brand campaigns, but, increasing. Mental, availability. Is arguably. A much better goal what, you really want is to be easily thought of in buying, situations.

You Want high share, of mind, to, own as many relevant, neurons, in the buyers mind as you possibly, can so, I think honestly marketers, need to remember that the top of the funnel is not, monolithic, there, are many different shades of, mental availability. And some, are much more profitable than, others. Awareness. Is, actually, the least valuable, form of mental availability. If your brand has high awareness that. Just means buyers know it exists. You may have heard of Taco Bell you may know it exists, but that doesn't mean you think about Taco, Bell when you're hungry which, is much more important, than sheer named, Wrecking mission, salience. Which John talked a little about salience. Is like a level up from awareness, if your brand has high salience, that means it gets thought of easily in an actual buying situation. When. You're hungry, how easily does, McDonald's. Come to mind and what you really want as a marketer, you want the brand to be thought of in as many different buying situations. As possible that's, why if you look at McDonald's advertising. You'll see it's marketing, itself as the right place to eat whether, we're talking about kids grown-ups. Burgers, chicken breakfast. Lunch dinner, McDonald's, is aiming for broad, neurological. Coverage, in all kinds of buying situations. At the very, top of the funnel there's, something, called fame, fame. Famous. Brands, have extremely. High share, of mine they come to mind effortlessly. Apple. Probably, the most famous brand, in the world think, for a second, about how much space Apple. Occupies. In your mind how many neurons they, own they, you know the name of all of the Apple products, you know the name of the current CEO the past CEO, the, location, of the headquarters the Apple brand is almost guaranteed to. Be thought of when, you're buying a phone now. Mental availability, probably sounds like a very b2c, idea, especially. Since we've been talking about McDonald's. And Apple, but, what, the banette and field research shows, is that mental availability. Is just. As important, in b2b as it isn't b2c, whether, we're talking about sugary. Beverages, Burgers, commercial. Insurance, cybersecurity. Consultants. The brand that comes to mind easily, is the brand that gets popped, bought. Sorry here, we've listed some. Of the different campaign, goals, in the IPA databank, and what you'll see is that advertising. Designed, to make a b2b brand more famous, is the type, of marketing, that drives the most business, growth awareness. Also drives growth of course and it's definitely better than no awareness, but awareness, is not a substitute, for fame, meanwhile. Interesting, to note here a lot of our clients are very focused. On changing brand. Perceptions. But, what you see here is that's about half as effective as, its straight-up, awareness, goal so, in general I think b2b, more marketers need to worry a lot less about what, buyers think about their brand and worry a lot more about when, buyers, think, about their brand honestly, your primary. Goal your. Primary, goal is just to get your brand into as many consideration. Sets as you possibly can which, is different from trying to influence, which, brand gets chosen, it's just about getting considered. And famous. Brands, are always, considered, now. This idea of Fame which may sound a little abstract it actually has really big implications. Especially when we're talking about creative. If, the goal of your ad is, just to get people thinking about your brand then, the creative, canvas becomes, much bigger and more interesting. Famous. Advertising doesn't. Need to make sense, it, just needs to be memorable. Consider. Geico. A car, insurance. Company in the u.s. now. Does it make any sense for, an American, insurance. Company, to have a talking, Australian. Gecko, as a mascot, of course. Not it doesn't make any sense, at all, but after. Decades of consistent, creative, does the Gecko start to stick in your mind reminding. You that there is a brand, called, Geico and it sells car insurance yes. That's exactly what it does and once you're in market, for car insurance are, you going to think about Geico, almost automatically, yes you, are the key.

To Memorability, is this, idea of distinctiveness. And consistency. First, your, advertising. Has to be distinctive. In other words it just needs to be a little weird like the gecko think about people, you tend to remember weird, people like my colleague, John right look how where it is right you're going to remember that over a bland, and boring person. And really the same holds, true for brands, so you need to be distinctive, you need to be weird your, advertising, also has to be consistent what, else do you remember you remember things you've seen a billion, times before like, the Gecko and that means you can't be changing, your creative, every quarter now. Most b2b branding, is boring, and genetic, a sorry, generic, not genetic, it's boring and generic and. Honestly it's a bit of a national disgrace may even, be a international. Grace I really don't care how uninteresting. Your category, is if your ad is forgettable, at the end of the day you're not doing your job, b2b, marketers, need to start aiming for fame, here. Is a best-in-class. Example. From HP e in. This LinkedIn, ad HPE, introduces. A big red, IT monster. That gets tamed by, HP, ease technology. It's, a pretty bizarre video. Which, makes the ad hard to forget, and the IT monster, is a reusable concept. They can reuse that for decades also, crucially. The, ad creates, a memorable, link between, HPE, and the buying situation. This, is what good b2b, branding, looks like it's time long, overdue but it is time for b2b, marketers, to start betting big on bold, creative. Concepts, like, the IT monster, if you want growth aim. For, fame. John. Are you gonna start aiming for fame yeah the crew, here told me that they can hear the people on the screen and they're all saying aimed for fish that's a champion, for fish and say shame for, fame yeah you've, created an international hind race all we needed to do is one little webinar, or. Just transforming, global culture one thing worth edible worth just I guess one thing that I guess my mind is slightly blown by is this idea that advertising. Doesn't have to make sense and. In fact by not making sense you're more memorable and you make more sense, it's a liberating, idea yeah a lot more fun yeah and more profitable I totally, agree didn't, see it coming the, gecko Geico, flow progressive, and our little IT monster. Alright. Now, that we're aiming for fame. Let's. Move on to our next principle which, addresses, something. Related, here which is the idea of reason. And emotion, right, these are things that need to be balanced, as well now. We've, got this wonderful funny. Cartoon. Here which, plays on this idea of our. People, totally, rational purely, rational, in b2b or just in business in general we have this misconception everybody's. So rational in business but. Let's put that to the test let's ask all of you at home or, at, work wherever you may be to. Think about your everyday experience at, work think, about the decisions, you see people make in your office. Do, those decisions, all seem perfectly rational to you or are. There many decisions, that might, be not, explained by a ration, but instead by emotion, and feeling, and gut, instinct, I think you'll agree that rational. And emotional decision-making. Are both at play when, at work, and. As we discussed b2b. Buyers are actually rational, and emotionally so that a lot of the advertising, and so if people are rational and emotional at, the same time as our, current experience often, it explains at the office you want to both emotional, and rational messaging, in your marketing, put. A really simple why you need marketing it speaks both to the head and to the heart now. Interestingly. In, b2b, the most famous phrase, and, our history of b2b marketing is almost certainly this idea that nobody ever got fired for buying IBM, which. I think we can all agree is at least as much. As emotional, as it is rational it's probably even more emotional than it is rational it really this just gets the idea that there's a lot of fear and doubt that, b2b buyers experience, when making a purchase so. This. Wasn't a campaign that IBM ran but. People understood this idea of fair and so IBM was wisely as, a compliment pairing this fear idea with rational, ads like the print ad you see here on the right which communicated the features and benefits of the, IBM personal computers right. This sort of rational, advertising, gives buyers the information they need to convince themselves and, again. People, that are on the buying committee with them gives. Them all the information they need to say. That you know IBM is the right choice it's the safe choice for me it's good for us here's, another example we really, like it's a 14 year old 14. Year running campaign, from The Economist, that blends emotional.

And Rational messaging, often in the same ad itself now. The atom the left is communicating, a very clear emotional, benefit which is you'll achieve higher status. Whereas. The, ad on the right is more of the rational benefit buying because it's good value, it's. Worth noting that you don't have to do one or the other some of the best, ads in fact blend both emotional. And rational messaging. In the same ad that. I never read Economist, ad here you can see on your left it really does explain both those things like don't you, know there's, a fear that if you don't read it you won't get the right job but, it's also rationally saying do read it and you will get the right job it's actually blending, the two together now, you may be sitting at home or at work asking. Yourself you, know how do I blend the two how do I the do and that, we should start with a question that we introduced a while back this. Idea of in market and out market, if. A customer's in market for a particular product, or service and. They're actively considering different brands than rational advertising. Is going to be more effective in winning the sale and the bid end field research, indicates that pretty clearly here if you're about to buy car insurance you. Don't want to hear from a talking gecko now, you already know that you're buying something you, just wanna understand the prices and the packages, and you want to choose the right one so rational messaging, makes sense if. On the other hand the buyer is not in market then, rational, advertising. Isn't going to be very effective you're. Not going to pay attention to the nuances of different car insurance packages, if you don't even have a car yet impossible. Emotional. Messages on the other hand will be the thing you want here because they have the advantage of being relevant, and entertained. To buyers even who are not in market we're out marketing those. Emotional, messages are often delivered and creative, stories like the Geico and the gecko or flow, and progressive, or mayhem or we are farmers, that did it. But. In general like these stories tend to stick in your mind for years actually and, if you think about some of the ads I just mentioned or the tune I just sang, you'll remember these ads off and last forever so. When you're finally ready to buy these. Ads often come to the forefront making. You think of the brand and then getting you to buy the brand that's, how emotional, brand building campaigns work in fact to, reach buyers well in advance of a purchase before they have a car but priming them to then buy it when they they, do have a car need to buy insurance, and.

You've Got to remember that most purchases, in b2b they're. Made infrequently, so most customers are not in market today they're out market, now that's one, clear reason, why emotional. Brand building delivers more growth over, the long term then, lead generation does with this short term rational. Messaging that you, can see here from the Minette and field data, you. Know ultimately in the end if, you remember there are many different, emotions at play and you should really focus on the emotions that are important to your category it could be fear, confidence. Curiosity, with. Banette in field we look at some of the most common emotional, themes that, we know exist in b2b advertising, and, you're seeing all of them on the screen now this is of course by no means, an exhaustive list. But. As in life and as at work you must choose the emotions that work for you. Peter. That, was such an emotional performance John, honestly I'm a little choked up you kind of remind me of a Meryl. Streep in a lot of ways which role probably. The deer hunter I think yeah very evocative of that it was a very positive movie, just like the positive message, just like we're delivering here yes yeah very positively, it was it's like a natural, thing to, bring up, let's. Move on quickly, we've. Talked a lot about creative, now it's time to start talking about distribution. And. How best to target. Your ads which. Is what we're going to discuss in our next principle which addresses, the, balance, between customers. And non customers, perhaps, our most controversial. Principle, so just brace yourself, okay I warned you at. Stake here is really a very fundamental, question which is how do businesses. Grow do. Businesses, grow by acquiring. New customers or. By. Getting existing. Customers, to spend more money should, be to B marketers focus, on acquisition. Or, on loyalty and retention, according. To a recent survey of ours. 65%. Of b2b marketers, believe that focusing, on loyalty, is the path to growth, but.

Is That true. The. Short answer is no it's. Not true, I'm sorry bummer don't, kill the messenger but unfortunately. It's not sure it turns out businesses, grow by, selling, to more customers, not. By selling more to old customers. Here. What you see here on the screen here is three different approaches, to growth and targeting, in b2b you. Can either target your existing, customers, you, can target new customers, or you can target both new and existing customers with, a waiting towards new customers, the data is really very clear, hyper, targeting, existing. Customers, to increase loyalty. Is not what drives business, growth acquisition. Strategies, are much, more effective. And the, most effective, strategy, is actually just to reach both, new and existing customers with. A waiting towards, new customers, now with the rise of account based marketing maybe, the hottest trend in b2b today a lot, of b2b marketers, John and I meet have decided they, are are going to focus their efforts on a small, list of high spending, accounts, when, this data suggests, is, that b2b, marketers, should focus instead on breaking. Into new budgets. And reaching. As many potential, accounts, as possible, yeah yeah. Great, that's very helpful everyone's following along much better now now because this is so controversial, we will point out to you we are not the only ones saying this but net and field are not the only ones saying this this research just confirms, the, finding, of the Arenberg bass Institute, in Australia, by analyzing, decades, of sales data across hundreds. Of categories, the researchers. At Arenberg Bass have proven, pretty definitively, that, increasing. Penetration. The, percentage, of customers who buy your brand is what, ultimately drives, business growth brand, loyalty is less important, and in, fact this is a bit counterintuitive it's. Actually often a function of, acquisition. Loyalty, is a function, of acquisition. The law of double jeopardy to, this principles called what, it shows is that the brands, with the highest penetration. Also, have. The highest loyalty, small, brands, get doubly, penalised they have less customers and less loyalty, this, is true in almost every b2c category, and as, you can see here it's true in b2b categories. - like, concrete, suppliers, and coronary, stents so if you really want higher loyalty, you should focus your efforts on acquiring, more customers. Why. Isn't loyalty. More effective, at driving growth, well let's just think this through in, common sense terms and I would say there's three main reasons why first. Of all most customers, are already spending what they can and buying what they need and even if you can nudge those customers, to buy more the potential upside is, usually, much smaller than. The upside of bringing on a new customer. Second, of all think. For a second about the reasons, why customers, become disloyal, if, you actually look into it what you'll find is that a lot of the drivers of churn. Have nothing to do with marketing, or product and sales for that matter churn, is like a natural, process customers. Retire customers. Move budget. Gets cut priorities. Change it happens, it just happens guys, and it's often outside, of your control. Finally. Let's. Think for a second about the factors, that influence, an. Existing, customers, decision, to buy more and let's, use a b2c, example, here imagine. You've never heard of Netflix, and then you see this killer ad for a great new show like, the b2b edge show which will be coming to Netflix soon, and you end up subscribing to. The service now, imagine a year goes by and it's time to renew your Netflix, subscription, what. Do you think is going to be more influential, in getting you to renew Netflix.

Is Advertising. Or, your actual, experience, as a customer. The, customer, experience, of course if you don't like any of the shows and, you don't get any value, out of the service no amount of advertising, is, going to convince you to spend more with Netflix the, same holds true and b2b right the quality of the product, and the quality of the sales support is going to have a very big influence probably. The biggest influence on whether an existing, customer spends, more or spends. Less and in most b2b companies, the, marketing, department is not in control of product. Or sales, that's why b2b, marketers, would be better off focusing. On what they can control. Which, is the non customer. Experience. Marketing, drives the most growth when it's used for customer, acquisition. Loyalty. And retention are, less important, and better, handled, by, the product, and sales organization. And. That's. Our edgiest, principle, maybe time, will tell. Wow. You. Feeling a little shooken. Up by that night now it's a lot so it's just hard hard. For me personally and I'm sure hard for everybody at home and it worked understand, that penetration. Drives loyalty, loyalty doesn't Drive penetration yeah it's, very different from what our mother's always told us growing up my dad always said the opposite but no my, mom was like if you want to retain your customers, and grow your accounts, you have to you, know focus, on loyalty campaign, she was wrong miss Lombardo was wrong it's very sad, she's right about everything else it's true I'm just not that one even my mom is imperfect kind of hard to believe it's, a touching, moment but a difficult one, okay. So we. Shall move on we didn't even get into your funnel by the way you did flip the funnel there oh yeah I've forgotten the name one, there's, a bummer you met the challenge you didn't take credit for it very rare Peter true but a lot of people are gonna watch this episode like a hundred times on repeat and they'll see it a lot of loyalty yeah a lot of lot of lawyers are am loyal viewers, alright, let's move on to our next, principle, which. May be the most important one and. It concerns the balance between, broad. Targeting, and narrow. Targeting. Now. B2b, marketers love to. Target narrowly that's, all about using data, to hyper target, senior audiences, and specific, verticals, just layer upon layer upon layer of targeting, but, again we must ask is this the best. Approach to growth, and. Before we get too deep into the b2b targeting. Strategies. Let's talk about a very obvious point a very cultural. Point perhaps let's just start with an obvious comment, which is that big, brands like McDonald's, are big brands, because, they reach and sell to a lot of customers. Brands. Like McDonald's. And Microsoft, literally, serve, billions, of customers every day you. Are now eating your burgers in the cloud people. Conversely. Small, brands don't have a lot of customers, that's precisely, what makes them small, brands. And.

Have We seen in the as we've seen in the previous principle, small. And big brands grow by increasing the size of their customer, bases not, by focusing, on loyalty now. The problem with narrow targeting, is that most b2b decisions. Are made by networks, of professionals, not. By loan decision, makers here's. An example you can see these, are the sort of buying committees, that seem to be growing more and more every year so. Let's say you are in the ad, business if, you want to drive sales today you may need to narrowly, target, the marketing, director or. The CFO, or the IT manager, the folks you see on the screen here however. If you want to drive sales in four years then, you need to target the audience's we're going to be doing those jobs in the future and of course those folks are very different you. Need to target the agency, director today the finance manager today the junior IT professional, today the, person who isn't the decision-maker today but who will be the decision-maker in four years now. Don't. Take it from me alone, let's, also trot, out some of our wonderful LinkedIn. Data LinkedIn the data shows that every four years forty percent of LinkedIn users change their occupation, company or industry so. Is just a lot of change and, a lot of changes that frankly can't be precisely, targeted, and precisely, controlled, now. Because there's so much turnover you, do need draw targeting, that reaches the folks who are gonna buy today but also the ones that are gonna buy tomorrow as Peter said you want to reach the entire category, target the whole category not, just current buyers right. Reach everybody, well. But as a reminder you shouldn't go too broad, most. People are not going to buy from you, you know and so you don't want to target everybody, in b2b you, need the right balance right, so, the right balance is. Going to be a little bit different it's going to look a little bit more like this you've, got to remember simply that the vast majority professionals, are not marketing directors they'll never become marketing directors and so it would be inefficient, to target to broadly really, what you want is to reach everybody, in the category so, we'll give you another b2c, example, and. B2c you often do want to target everybody for selling toothpaste the joke around here goes you should target everybody with teeth. Except. Very little kids and old people who often have no teeth sadly, Santana. Food. Changes um. So you don't want you know so and b2c you do want to reach everybody probably you'll use TV advertising, right because it's probably the most cost effective way to reach a lot of people however. In b2b the, economics, of media look very different, not everybody, can buy cloud computing, solutions. And. So you've just got to reach as many current, and future cloud buyers as you possibly can without being too too, extravagant so, you want media channels that offer you proper, segmentation, and accurate, reach against your category. Remember. Reach, is really, important, you cannot influence the buyer if you don't reach the buyer there's, too much conversation about engagement and not enough conversation, about reach it's got to be the right reach but. It's got to reach against the category, of, the sequence does matter and Reach is always the first step in the sequence of reaching people and influencing, them this, may all sound painfully. Obvious to you and yet most, of our clients seem determined to hyper, target, and to reach as few buyers as possible, boo. There. Are far, too many conversations, about micro, targeting tiny, segments, with laser precision, unfortunately. This isn't science, we. Wish that it were though, so. You. Know that theory just doesn't hold up so our research. Other research from the Arenberg bass institute shows, that category reach is actually the single greatest predictor, of growth that means you want to reach everybody in marketing young and old or everybody an IT young and old, yet. Most marketers, have no idea percentage of the overall category they're reaching today obviously, you need to start tracking them nor, do most markers have any sense for the share of voice they get against the category. And critically how their share invoice compares, to their, competitors, as. A general, rule way to start thinking about this is what's, called the share of voice rule and it simply means that your. Share of voice needs to be bigger than your market share let me give you an example let's, say you have a 7 percent market, share in cloud computing your. Share of voice needs to be higher than 7, percent in, order to grow your. Share voice could be 12% 15% 20%, but, the critical idea is you've got to be reaching more customers, and you currently have in order to grow peter knives in that countless times today but it's a truth the.

Key Metric here becomes what's, called excess, share of voice or ISA which. Is the difference between your share voice in your share of market we, believe that eSAB. Is one of the most underrated, metrics, in all, of marketing, today, excess. Share of voice is really, important because as I always like to say you have to win the mind to, win the market let's, go through this in a bit more detail though because, this is an important concept and we need to put a bit of numbers aside. It to help you maybe make sense of it so the Benenden field research shows. That for every 10 points of excess share invoice you get on average about 1% increase per annum per year in your growth and market share market share, just be totally clear simply, means how many competitor. How many customers or sales you get as a percentage of the entire market so market, share means more customers now. And eSAB is just, as important, b2b as it is in b2c, as you can see here from the ubin end field research it, just shows that broader targeting, targeting everybody, in the category is really what gives you growth and that is really tracked, says something by ease of. How. Broad is too broad when it comes to targeting on. B2c marketing obviously, want broad targeting, but. You don't necessarily need that here so let's, look at the next idea just to put it in really simple terms because. The math sometimes can be complicating, to people now, excess share of voice let's, say again you have 7% you, want to get a 17%, share of voice 7, percent market share because you 10% isaw gives you your growth, this is a number everybody just sort of needs to start tracking. So. That is it for my my, final bit about broad and narrow sometimes I went broad sometimes I went narrow it a little bit of both which is honestly the right approach in eSAB, now everybody's, talking about Esau, of people. Told me google search results on Esau they're up like nine hundred percent, everyone's trying to calculate its greats already, become a sensation, aim for, fame for faint broad or they're chanting narrow, what. A big impact we're happy he's soft do okay this is probably a good time to wrap up we're gonna get to Q&A but first I just want to recap what we have learned about driving, growth and first. I want to issue a public service, announcement John, and I have always been saying this for about three years but we're gonna say it again you, have to remember that. Growth, does not occur, in a vacuum right. You are competing, against, other companies. And if you want to capture the most value, then, you need ideas, that, are both right and contrarian. If you're doing what all of your competitors, are doing then. You have no competitive, advantage.

By Definition even, if it's the right idea, contrarian. Ideas. Are the most profitable, ideas an idea, that's very well understood in finance, we, often forget about it in marketing, hopefully. Over the past 40 minutes or so John and I have proven to you that these ideas are right but now let, me take a second, to, prove to you that these ideas are not just right but, contrarian, based. On the results, of a recent survey, we did of over, 4,000, b2b marketers, let's. Start with principle, one balancing. Long-term. Growth and short-term, growth according. To Boneta field brand, building, is the greatest, driver of growth in b2b but, crucially. You, need to wait longer than six months to see the effects, of brand campaigns. Now, how many marketers, do you think are willing, to wait six, months John, would you like to guess, four. Percent Wow, thattaboy. Only. Four percent of, b2b marketers, measure, impact, beyond six months which is one of many reasons one of many tragic, reasons why. B2b, marketers, are chronically, under, investing, in brand, in. Our second, principle. Favorite, we talked about aiming, for fame you've heard the aim for fame chant that's going on now the, need, the, crucial need to bet big, on bold, memorable. Creative, concepts. Unfortunately. The vast majority, of b2b marketers are much too risk-averse, and timid, to ever achieve Fame. 77%. Of us would, rather test, and learn on a bunch of little small ideas, than make a concentrated. Investment, in a big idea. Even, though big ideas are much more likely to breakthrough when you're in a hyper competitive media, environment. So can I say one thing you of course John don't. Just test and learn test and learn and bet big yeah yeah fine, you've got a new a new addendum, to test and learn yeah but your tests need to be they need to be big at a certain level to even have a chance of breaking through most things they're so small that they're just guaranteed lesson learned and really bet big yeah we'll workshop this we don't need to do it live on their.

Behind-the-scenes. Look at what's going on let's move on to our third principle where. We discussed, the balance, between emotional. And rational advertising. And how effective, b2b marketing needs to be both emotional, and rational, but. This probably, won't come as any surprise b2b. Marketers are about twice as likely to produce rational. Ads than emotional, ads our, fourth. Principle, explained, why acquisition. Not loyalty, is the biggest driver of growth in b2b of all of our principles, this, one is pretty clearly, the most contrarian, over. 65%, of, marketers believe the opposite, that loyalty, is the path to growth. Finally. We covered the importance, of category. Reach potentially. The single, greatest predictor. Of success in, b2b but. Only half of marketers, believe, that Reach is important. Most of us prefer narrow, targeting, to broad targeting, even though rod targeting. Is the, path to future profits, yay yay. All, of this presents you with a massive, opportunity again. The most profitable, ideas are, not just right there contrarian, and we. Believe at least in our minds these principles, fulfill both of those requirements, and, I would say as an industry now. Is a good time to start exploring, new, models, for growth and restoring, balance to, marketing, strategies, which is the ultimate formula, for growth I'll. Also have a very quick and light sales pitch for you here which is that we do believe LinkedIn. As a platform, is actually designed, for this new growth model something. We're going to be working on proving out in the next few years if you as a client like these ideas and want to partner with us on executing, against some of them please. Reach out yeah. LinkedIn is the IT monster, for you yeah where, will be your IT monster you're the IT monster, for you and, now I think we have some time for Q&A right, let's do it what, do we got on the pod. What. Do we have on the pod, Wow. The. First question from the audience. Is. What. Do you think about. Byron. Sharp. Great. Great yeah absolutely I think double, law of double jeopardy super. Controversial, obviously. But seems to be proven out in the data I'm guessing, the questions, aren't working on the machine and you're just kind of trying to ad lib hearsay B's going on maybe maybe see I can tell we've worked together for very long but what do you think so I think he's great well I guess we can recite some of the questions, we get asked a lot yes. So I will just play the role of the audience John. Yeah please every, time we present somebody, says you know but how can I not be short term when Wall Street is so short term the finance, department is, short term we got quarterly, earnings grow how can we break out of this short term trap what, would you say to me John, I would make to you the future, cash flows case for marketing we talked about it earlier we flipped the funnel from bottom. Of funnel top of funnel to in market out market and most. Of the money that supports, the, stock. Price of any company actually is like 80 percent of that money comes ten plus years in the future and so if that's how. Wall Street thinks about judging, your company which is mostly on your future profits then you should think about judging, your marketing or aligning your marketing to the future profits as well and brand, buildings good for future profits sales, activation, is good for current profits you need both but, the balance always needs to be tilted long term tilted, brand-building tilted. Out market, tilted, future cash flows and so, invest in brand building his brand building provides future cash flows are we doing that today though Peter, I don't, think so but as the CFL really resonates, with me no no I'm just gonna change up my whole strategy hmm. What, else do we get asked a lot about pricing. Power I think is a poorly.

Understood Be, upset we talked about that a little we. Could well. I mean I we don't you know we don't have it in here but Buffett what a Buffett say about pricing car Buffett, yeah he's actually a huge fan of this show he's probably watching right now so, Warren Buffett crucially, he says that the number, one thing to look for in a business is pricing power good, businesses, can, raise their pricing, without losing, any customers, bad businesses, raise a 10 cents lose everyone I think, a lot of our clients are really, obsessed with this idea of volume, all they care about is driving more leads how many leads did I get this quarter they almost never stopped to, ask themselves what I would say is a pretty fundamental question. Which, is not just how many leads that I drive but how much were, those brands, willing to pay for, our products and services and I think a lot of the research shows mark, Ritson makes this point in his mini MBA program, actually, increasing, pricing, power is, often, a much easier way to boost the profitability, of a firm than increasing volume, increasing, volumes price tough, but price you just have to change a number basically you, can grow the profits, 10 percent according to some exercises. So I think marketers need to think a lot more about pricing power and the types of marketing, that deliver pricing, power would, you say that's like brand building or is that more sales activation. More, of a brand building, mmm, anything why do you say that well I mean some people would say that the purpose, of a brand is literally just to charge higher prices I mean that's in an alternate, definition to the one that we have but it's another very reasonable, one but. You want to reach people well, in in advance of the. Buying process right, and you, want them to think certain things about your know your brand and think certain things about your brand often those people just buy out of convenience not, based on the cheapest price and so, if your people are buying more out of convenience or, ease then. They're probably willing to pay the prices you charge they're, not looking to compare it to something else I think we forget how many decisions, are. Actually. Probably a little bit more ad hoc then than, we realize, in that case brand, building reaches the people do, you think it's a strong brand you just pay the prices that they ask for right it's why luxury, marketers, don't, usually run sales activation. Ads you're not gonna see a bunch of lead gen ads from Cartier they on pure brand buildings, that's what allows you to boost your, pricing, power alright love luxury love luxury market many b2b marketers how about this question this is a one, of the questions we always get let's say that I take everything in this in this presentation all, these principles and I say okay brands really important, well, I get that now it reaches, future buyers it, gives me the ability to charge higher prices it, just generates more short and long term growth I'm all-in on on brand marketing my, brand building it but you know my colleagues, who are in performance, marketing or lead gen they're able to go into the CFO and give this one number this cost per lead what, metrics, do I bring in to articulate, the case or argue the case for brand marketing what are some of the things that that we talk a lot about that we care about yeah well I think first of all this research helps link, the, marketing, input which is branding, to financial, performance so, I think you know not to sound a little too delusional, here but I think our research will help brand marketers, make that case internally. Greed in, terms of metrics, you should track we recently did sit down with Professor Jenny Romani ak and she made some interesting points about kind of the three key things you really need to measure to know if your brand marketing, is working she talked about category, reach which, we talked about are you reaching all potential, buyers she. Talked about measuring, distinctiveness. Which is interesting we said you know the Geico gecko is weird you don't mix it up with the mascots, from you know progressive, or statefarm right so you need to actually measure your, distinctive, brand assets, and make sure they're only linked, with your brand and not a competitor, brand and that everyone has heard of you right she, need category reach you, need distinctiveness, and then the final piece is this idea of memory structures. And owning the right neurons, this, one's a little complicated but she showed us a pretty simple tracker I thought, where you can just say what, are what she calls category, entry, points, like what are the cues that, lead.

To You buying in a category, and on that category, entry point unfortunately have not got you of why we're dying out of time oh great well would have been a great point you what a lot is great but yes category, reach share of voice category, entry points all very important area for it really important it is so just. As a final reminder if you liked what you learned today we'd, love for you to download the report which, is at b2b Institute, org sign, up for our newsletter, which is called b2b, edge of course, connect with Peter and I on LinkedIn, and with. That I'm John Lombardo from the b2b and dude Peter, Weinberg from, the BTB Institute thank you so much for joining thank you I don't forget to take our survey we've got a survey these. Particular get. To take the survey thank. You wrong camera right survey.

2019-11-16 03:21

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Awesomely refreshing content! Regarding the rational vs emotional advertising discussion, one thing missed out on is how emotional advertising disappears when lower level execs(when they are the ad viewers) have to communicate value to multiple stakeholders, i.e. rational msging is required in this case. emotional advertising works better for top level decision makers.

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"Marketing drives the most growth when it is focused on customer acquisition and not customer retention."

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