How B2B marketing really drives growth
LinkedIn’s new think tank, The B2B Institute, has just published the most in-depth study yet of B2B marketing effectiveness. Here’s what it should change for your strategy
October 16, 2019
Marketing has more than its fair share of received wisdom – and B2B marketing arguably has the most of all. There’s the assumption that your campaigns should be targeting the people making buying decisions today; that you must convince them with facts not sway them with emotion; and that you need to put more and more budget into performance marketing and lead generation campaigns to deliver the results your business needs.
Received wisdom isn’t necessarily wrong. The reason it’s passed on is usually because it works – to some degree, anyway. However, because it’s rarely challenged, we don’t get to test it against other strategies. As B2B marketers, we don’t know how much growth we’re leaving out there by following the same approaches that we always have.
What’s been missing from the B2B marketing conversation is robust data about how different marketing strategies drive growth. We’ve lacked concrete information about how different approaches to media spend, targeting and creative impact sales, profits and revenue. We’ve struggled for science about the precise relationship between B2B marketing and the bottom line.
The most in-depth analysis yet of B2B marketing effectiveness
This robust data is missing no more. LinkedIn’s new think tank, The B2B Institute, is this week publishing exclusive new research on The Five Principles of Growth in B2B Marketing. It’s been carried out by the legendary researchers Les Binet and Peter Field, and it uses IPA data to establish a framework for effective B2B marketing. It tests the assumptions we’ve always operated on, and sets out to answer the question of whether B2B needs to follow different rules to B2C – or whether it’s a special marketing case.
The B2B Institute has a mission to promote an evidence-based approach to B2B marketing, and spark an open discussion around strategy that goes beyond the same old tactics. This is the first research project that the Institute has commissioned – and its findings have big implications for how B2B marketers plan.
B2B isn’t as different as we’ve made out
The study finds that there are no special rules for B2B – no reason for B2B marketers to neglect emotion, communicate largely about product details, or de-prioritise brand marketing to focus on lead targets. We don’t have an excuse for focusing on tactics for the bottom of the funnel – and ignoring wider marketing strategy.
Like their B2C counterparts, B2B marketers need to balance their marketing investment between brand activity that builds emotional connections and salience at scale – and activation marketing designed to target the most likely immediate buyers, generate leads and drive sales. When B2B marketers focus their campaigns solely on the bottom half of the funnel, they undermine long-term profitability and growth – and they make their activation marketing less effective and efficient.
As The B2B Institute’s Global Director, Jann Martin Schwarz, puts it:
B2B Marketers need to realise it’s not “either/or.” What’s really needed is a balanced, “yes, and…" approach that combines opposing concepts, such as short-term vs. long-term impact and emotional vs. rational messaging. This will help them better understand diagnosis and strategy before jumping into tactics.
In place of received B2B wisdom, The Five Principles of Growth in B2B Marketing offers data-driven recommendations for effective B2B marketing strategies:
Principle 1: Grow your Share of Voice to grow your Share of Market
There’s a clear correlation between the Share of Voice (SOV) that a brand has and the Share of Market (SOM) that it will achieve. If you want to grow your SOM, you need to invest in growing your SOV by increasing marketing budgets relative to the competition. For B2B businesses, 10% Extra Share of Voice (ESOV) grows market share by 0.7%. You can use this formula to set budgets and make the business case for them.
Principle 2: Aim to balance your budget evenly between brand and activation marketing
B2B businesses grow best when allocating 46% of budget to brand-building activity and 54% to activation marketing focused on an immediate response. Brand marketing requires more investment over time and delivers less of an immediate return – but its effects last much longer. The influential memories built by brand campaigns make future activation marketing significantly more effective. However, creating these memories takes time – and means that brand activity needs to be measured over a significantly longer period.
B2B marketers need to stay focused on immediate lead generation and sales targets to deliver ROI. However, you also need to use the breathing space this provides to shift more budget to longer-term brand activity.
Principle 3: You need parallel targeting strategies
B2B businesses can’t grow by targeting their existing customers alone – they need constant customer acquisition. And the best way to achieve this is ensuring brand campaigns reach all of your potential current and future buyers. B2B strategies need two targeting approaches: wide (and therefore more effective) for brand activity; more specific for activation marketing.
4. Awareness isn’t enough – aim for brand fame
As in B2C, B2B brands get huge advantages from being the first name that jumps to mind whenever someone thinks about their category. Campaigns with the objective of building brand fame deliver far more large business effects than those just building awareness. Aim to become famous by taking bold positions and applying brand codes consistently over time, making sure people always know it’s you they’re hearing from.
5. Get emotional for long-term impact
B2B marketing neglects the immense value of emotional engagement in supporting long-term growth. It’s true that rational arguments and product detail work best for activation campaigns targeting those most likely to buy. However, marketing that appeals to emotions is far better at building brands and driving long-term profits and sales. The long and short of it is that B2B brands need emotional appeal. It makes them famous, and primes people to view their offer more positively. If people like your brand, they want to believe your product messages.
The Long and Short of It: Brand and Activation both matter – so don’t just spend on one
As a B2B marketer, you’ll be more effective and more efficient over time if you distinguish between the equally important roles of brand and activation campaigns, and aim to push different buttons with each. Build your brand with an emotional angle based on empathy, not on product messages and differentiation. Save the rational detail for activation campaigns that are more focused on immediate opportunities. And work on finding a way to distribute budget more evenly between the two.
“Evidence-based frameworks like this can spark broader thinking about B2B marketing that helps marketers move the strategy on from “I need to generate leads right now,”” says Jann Martin Schwarz. “By building these new ‘mental models’, the B2B Institute can be a real enabler of growth for our clients, and that’s an important part of our role as a trusted advisor.”
You can access the full report, The Five Principles of Growth in B2B Marketing, from The B2B Institute – and look out for more posts exploring how to apply the findings to your strategy on our blog.