Evidence-based strategic thinking in B2B growth effectiveness should not be in short supply when you consider the budgetary decisions involved.
But compared with B2C, data-driven insight is thin on the ground when it comes to the big picture and the kind of thinking which drives sustainable growth in uncertain times.
So for the LinkedIn-funded B2B Institute, a new think tank, it made sense to dig deeply into the data through a B2B-specific lens to create The 5 Principles Of Growth In B2B Marketing: Empirical Observations on B2B Effectiveness. Authored by econometrics expert Les Binet and strategic planner Peter Field, the report draws on the IPA databank for primary input and offers conclusions that are timely and relevant to every industry.
Starting from the principle that contrarian thinking gets results — which the researchers have long advocated — the research offers new ideas for balancing marketing investment between long-term brand building and short-term sales activation. They challenge the industry to better measure the former and understand the lasting impact of their work, calling for courage in rejection of consensus-optimised messaging.
While recognising the tentativeness of the findings (due to sample size and scope of the IPA dataset with its low proportion of B2B data despite the 1,500 case studies gathered over 40 years), the researchers’ recommendations are distilled into 5 primary principles.
Together these encourage B2B marketers to consider new ways of looking at what they do, and the people who are the targets of their messaging:
Principle 1: Invest in share of voice
The first of the 5 principles put forward in the research is that B2B brands that set their share of voice (SOV) above their share of market (SOM) tend to grow. Where the buzz is, sales follow — a long-held truism in B2C, but demonstrably also applicable to B2B.
The researchers concluded that the effect is even higher in B2B: For consumer brands, 10% extra share of voice causes market share to rise by 0.6 % points per annum, all else being equal. For B2B, the corresponding figure is 0.7%.
Therefore they recommend using the excess share of voice (ESOV) equation to set target share of voice relative to market share and invest in advertising accordingly to achieve that, just as is common in B2C.
Principle 2: Balance brand and activation
In order to achieve an increased share of voice, B2B brands will need to invest in their long-term brand building.
This means creating memorable messaging that works on an emotional level and drives cumulative results. But this doesn’t clearly show up in the usual ROI metrics, which are now so easy to extract in performance marketing and which steer brands towards short-term decisions and continual iteration for immediate gain. It’s very cost-effective now to split-test, tweak, optimise ads on the fly in response to real-time data but this can obscure the importance of taking a longer-term view. Brand building has always been known to reduce price sensitivity and increase margins but it remains harder to pin down quantitatively.
Binet and Field concluded from the IPA data they reviewed that the most effective split of marketing budget was 46% allocated to brand, with 54% on activation — to be used as a guiding principle rather than precise ratio — but to encourage data-driven optimisation for every brand.
Perhaps some of the bias toward short-term thinking is driven by an intuitive understanding of the third big idea though:
Principle 3: Expand your customer base
B2C marketers have always had plenty of evidence that penetration rules: customer acquisition beats loyalty, every time. Brands grow by getting more people to buy them.
In B2B, where high-ticket sales and high-lifetime-value customers are nurtured and account-managed, there may be a lack of emphasis on customer acquisition strategies, which means brands are leaving money on the table. Loyalty is not a growth engine, and campaigns that focus on this underperform on every metric. It seems that the idea that acquisition is expensive — so it’s better to sell new things to existing customers — has taken hold at a level that is simply not supported by the data.
Furthermore, investment in acquisition increases brand awareness, which stimulates loyalty as a by-product, which doesn’t seem to work so well the other way around. Reach strategies, talking to non-customers and customers together, are the most effective use of budget. In fact, the Ehrenberg-Bass data from the IPA set cited for this conclusion strongly supported going for broad appeal, to as many category buyers as possible, rather than niching down just because the targeting tools exist to do so.
The implications for B2B stress the essential need to know your market —and where those buyers are — and ensure messaging reaches those who influence those buyers as well as those whose career paths may take them into that target (see principle 2, long-term brand awareness starts early).
“That means marketing really is a numbers game; the most successful brands tend to be those that have the most customers, and they tend to be the brands that talk to the most people in the market, most often.”
Principle 4: Maximise mental availability
When you talk to customers and prospects regularly, you float higher in the collective consciousness — and brands should be measuring mental availability, to ensure they’ll surface when buying decisions are made.
Behavioral economists have been talking about availability biases for years, and there is overwhelming evidence for the fact that we simply think about things less than we believe we do. We think we’re making rational considered choices, whereas instead, we’re reliant on lazy heuristics to filter our options and jump to conclusions, hundreds of times a day.
We all know about this when we’re picking out a familiar brand of soup tin in the supermarket without a moment’s thought. But it’s long been assumed to matter less in B2B, where surely high-stakes big-ticket decisions are subject to careful thought and evidence-based consideration?
Not so much, the researchers conclude, and this is why brand-building and share of mind truly matter. Being famous, being memorable, being current in the broader conversation, all of these things are important to simply being present in mind when decisions are made.
How do we become memorable, and bypass reliance on that rational thinking we haven’t got the mental energy to perform? It may be easier than it sounds:
Principle 5: Harness the power of emotion
The evidence is clear: for the long-term awareness which influences choice in ways we’re not inclined to track, emotional messaging is more effective. Even in B2B.
Of course rational messaging works in the short-term, when it comes to getting buyers to act on a brand preference. But overall, the IPA data synthesis indicated that B2B decision-making is really only a little bit more rational than B2C. We might use data to back up our B2B decisions, especially when we’re enterprise buyers who specialise professionally in this kind of decision-making and are committing other people’s budgets. But our system-one thinking (to go back to the behavioral economists mentioned above) defaults to the emotional relationship first. How do I feel about this brand?
Because we know we’re supposed to be rationally comparing functions and facts these emotional components may be mostly unexamined, and respondents can’t always say why they feel more warmly toward one brand over another — but somehow an emotional association has embedded itself firmly in memory and mind, and is hard to resist.
It’s also self-fulfilling, creating a halo effect (the affect heuristic). Advertising which makes a buyer like a brand more will have a lasting impact on positive beliefs about its benefits, as we seek confirmation bias and to reinforce our embedded viewpoint.
Emotional priming can be subtle — from a touch of FOMO to a hint of identifying with unspoken role-based dilemmas. But the message from the researchers is clear: don’t be afraid of invoking feelings, in B2B marketing.
Conclusion: B2B is not so different after all
While mindful of the limitations of the primary dataset (where B2B was a small segment), the researchers’ conclusions are very clear. Effectiveness in marketing growth comes from share of voice, reach, and brand awareness, and this shouldn’t surprise us. B2B buyers aren’t robots, or rational ‘econs’, they’re flawed emotional humans like the rest of us.
Of course, they’re adopting different roles and mindsets continually and these are reinforced by earlier decisions and repetition, but in this sense, there is probably more variation within the B2B buyer role than between B2B and B2C: with the CEO of an SME having to make a vast range of choices across a spectrum of areas of responsibility, and perhaps resorting more to intuitiveness and heuristics than the specialised enterprise purchasers who are comparing choices within a much deeper and narrower market.
But they’re all humans primarily, and the messaging which resonates and builds meaningful and lasting connection will need to cut through emotionally first. Then build a lasting and congruent association with the values that matter, so that they’re high in heart and mind when the choice is made.
Perhaps it is contrarian to conclude that, no matter how whizzbang our latest real-time dashboard of live optimised response visualisations appears, and however much it suggests we’re all simply tweakable testable data points, we are all only human. Deep down, we haven’t evolved out of our biases and emotions — and when you’re selling any message, it’s important to remember that.
About the Author:
As a market research veteran and founder of NYC-based B2B market research consultancy firm, Adience, Chris Wells has worked with dozens of companies over the years.