For every CMO or marketing leader supporting greater brand-building investment, it feels as though five CFOs are waiting to tell you it has no demonstrable impact on commercial growth, instead suggesting that marketers focus their efforts on tactics that drive short-term returns like demand generation, writes Transmission’s Chris Bagnall.
Despite a body of evidence supporting brand investment in a downturn, just 26% of B2B CFOs believe that brand marketing should be given a higher priority in times of economic uncertainty. Now, brand’s diminutive standing in the eyes of B2B finance departments is nothing new. It’s a topic that’s seen much debate over the past few years and one Transmission has explored at depth in our ‘Closing the CMO-CFO brand value gap in B2B’ research. So, how can B2B companies use brand building to drive growth in the long term? And what roadblocks will they likely encounter along the way?
Addressing B2B’s product delusion
Product-led messaging has been a mainstay of B2B marketing for as long as the industry has existed. It’s a hangover from the days when B2B marketers believed that the costs and risks associated with business purchasing strip buyers from their usual decision-making habits. That they buy the best solution for their business’ needs.
To underline just how pervasive this view is, we found that 84% of CFOs believe B2B buyers will purchase the best solution, product, or price and not the best brand; A statistic made significantly more worrying upon learning that 71% of CMOs agree. However, we should already know that donning our formalwear and opening our work laptops for the day doesn’t magically remove the consistently inconsistent nature of human decision making.
While a product or solution-led approach to messaging certainly has its place in the later demand generation stages of the customer journey, research has shown time and time again that distinctive brand creative makes buyers more likely to pay attention to an ad, more likely to buy, and more likely to pay a premium.
In fact, a study by BBN analysing 850 B2B case studies found that when buyers start actively looking for a solution, only one to three relevant brands immediately come to mind. After up to 10 competitors are added to the roster and the consideration list whittled down to final contenders, they buy from one of the three ‘front-of-mind’ brands in 90% of cases. In other words, the brand that’s best known is the brand that’s usually bought.
Herein lies the issue with what The B2B Institute’s Jon Lombardo and Peter Weinberg call ‘product delusion’. If a buyer isn’t aware of who you are as a brand, they won’t be receptive to messaging singing the praises of your solution. This is where the value of brand building makes itself known and when you’ll most likely see pushback from non-Marketers.
The two-way street to alignment
Overcoming varied views towards the brand's business value can feel like a steep hill to climb without understanding how to approach the conversation. Misalignment between Marketing and Finance is an age-old challenge that continues to shape opinions and entrench views like ‘product delusion’ even today – a fact reflected by our insight that 62% of CMOs want to invest more in brand over the next 12-24 months compared to just 31% of CFOs.
Rather than maintaining a stereotypically adversarial relationship, businesses would be best placed to recognise the two functions are working towards the same goal: growth. Both CMOs and CFOs agree there are difficulties in demonstrating brand’s commercial value. Thus, the two remits should work together to connect brand to the bottom line.
Once again, our findings support this view: While CFOs feel that marketing leaders should provide more accurate tracking and reporting of brand programme metrics, CMOs want the finance department to demonstrate a deeper understanding of brand marketing goals and strategies. This suggests that CFOs want brand to be measured in metrics they understand best, not the best metrics for measurement. Equally, CMOs must better demonstrate how brand can be a tool for growth.
Contrary to what the finance department believes, brand does have an ROI. The challenge comes from the fact it’s measured in timeframes outside of fiscal years – something Roger Martin and Head of The B2B Institute, Eugene Schwartz discuss in ‘The Throughline’ interview. However, as 57% of CFOs believe 12-24 months is the optimum period to measure the ROI of brand programmes, working closely with the C-suite to educate them about how brand marketing is a tool for growth is a necessary first step to building a high-performing brand.
No matter what, we Marketers must be able to more consistently show impact to secure future brand spend. It’s a two-way street to alignment, and both functions need to be on board.
Investing in brand building allows businesses to go long
So, what can you do to build a high-performing brand and demonstrate its impact on your business? To start, identify your distinctive brand assets. Research shows they not only make campaigns more effective, they’re also 23% more likely to contribute to increased market share and profit gain.
Whether it’s your logo, your design language, or even a mascot, consistently leveraging highly distinguishing brand elements in your marketing can be a powerful way to build a strong and instantly recognisable brand. Over time, this builds memory structures among your audience that bring your brand to mind whenever they see an ad including those assets, laying the foundations for future consideration.
Showcasing brand’s impact, on the other hand, can be done through Share of Voice (SoV) and Excess Share of Voice (ESoV). If brand building helps businesses stay front of mind in the roughly 95% of buyers who aren’t in an active buying phase, understanding and measuring your SoV and ESoV allows you to grasp how many future buyers you’re reaching, influencing, and building familiarity with.
For B2B industries where price plays a significant role in purchase decisions, committing to ESoV can be a game-changer. Having a greater SoV than Share of Market (SoM) gives brands scope to grow their market share. Research has found a ‘rule of thumb’ relationship showing a 10-point increase in a brand’s SoV correlates to a 5-20% reduction in price sensitivity as stronger brands can more easily protect market share and profit margins.
How you invest in growing your SoV is up to you. An increasing number of B2B businesses are using TV advertising to boost awareness of who they are and what they do, with spending doubling since 2018 in the UK. Social media platforms have dedicated awareness campaign planning objectives. And we at Transmission have our Brand Intelligence solution that dynamically tracks and benchmarks SoV and SoM over time. However, as mentioned above, the key is to leverage what makes your brand distinct wherever and whenever possible.
Investing in brand building allows businesses to lay a path to future growth while also driving short-term sales performance here in the now. We can’t stress enough the importance of its ability to build awareness and familiarity beyond the same 5% of in-market buyers your competitors will also be targeting. However, as with all things in B2B marketing, there needs to be alignment internally and a clear idea of what to leverage and why before you get started.
Gain greater insight into the fears, doubts and uncertainties held by B2B CFOs towards brand. Explore the results of Transmission’s ‘Closing the CMO-CFO brand value gap in B2B’ here.