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Secret to Brand Growth? Mental and Physical Availability
43 Plays1 year ago
In this enlightening episode, Henrik Petersen a fractional CMO who has over 20 years of experience in B2B marketing for software companies such as Zendesk and Microsoft, delves deep into the pivotal role of marketing in sculpting a company’s brand. He emphasizes the transformative power of a ‘Love Brand’ and the unparalleled value it brings to businesses in the digital era. Using vivid examples, Henrik deciphers the nuances of brand perception and the factors that drive consumers towards familiar names.
Discussing the barriers many companies face, Henrik pinpoints brand awareness as a chief challenge. He sheds light on the importance of brand investments, highlighting scenarios where consumers gravitate towards brands they recognize and trust. Drawing from specific examples like ‘shield logistics’, he elucidates the psyche of B2B buyers and the inclination to favor known brands.
As the conversation progresses, Henrik confronts the dilemmas brand marketers face, especially when resources are scarce. For smaller brands, he underscores the delicate balancing act of managing budget constraints while striving for impactful brand presence. Through candid revelations, Henrik offers a fresh perspective on brand marketing in today’s competitive landscape.
In today’s episode, we discuss :
- Introduction
- Business owners’ views on marketing
- Grow business revenue & margin with marketing
- Branding increases the margins of the business
- Convince stakeholders to invest in marketing via the sales funnel
- When and how to invest in brand building
- First step in brand building is to identify growth barriers
- Physical availability of products
- How advertising works
- Advertising creates brand memories
- Ways to justify marketing investment with CEO & CFO
- Marketing with a limited budget
- Don't keep changing your brand messaging
- Associate your brand with a specific job to be done
- Case study of Salesforce
- Build long-term growth by marketing to non-consumers
- Understanding customers who are in-market and out-of-market
- Secret to Brand Growth? Mental and Physical Availability
- Physical availability
Tune in for an episode brimming with insights, real-world examples, and actionable strategies for businesses of all sizes.
Recommended
Transcript
Introduction and Guest Introduction
00:00:00
Speaker
Welcome to Winning with Data-Driven Marketing Podcast. This podcast is brought to you by WASD.ai Market Research. I'm Julie, your host in this podcast, and in every single episode, we talk to industry leaders, marketers, and growth experts in Asia about how to use data to enhance the ROI in their marketing activities.
00:00:22
Speaker
We bring you real case studies while giving you background on how these leaders build their career to where they are today. Joining me today is Henry Peterson, a fractional CMO who has over 20 years of experience in B2B marketing for software companies such as Gendes and Microsoft. Henry is now also the CMO of Brand2B who work with startup founders executive to deliver sustainable and profitable growth.
Marketing Myths and Misunderstandings
00:00:49
Speaker
Now, for those of you who have been following our podcast, you'll be no stranger to Henry because he's also our podcast speaker for our fifth episode, where he shares a lot of insights and best practices about how to use data and market orientation to create a leading strategy. Now, our conversations were so fruitful that we have to actually bring in Henry for the second episode. And this episode, we're going to go through a little bit deeper into several myths that we believe our target audience are also curious about.
00:01:19
Speaker
So before that, hello, Henrik. Welcome to join us again. Hi, Julie. Thanks for inviting me back. It's a pleasure to be on the podcast with you again.
00:01:31
Speaker
Yeah, in our last conversations, you mentioned to me something that we actually didn't get to cover. You shared that you actually talked to quite a number of business owners. So I am personally curious as a business owner myself, what are the insights that you can share with us after so much conversation around business owners around what's their view around marketing?
00:01:54
Speaker
Yeah. Yes, I do get the opportunity to join. I try to join as many opportunities I can to meet with business owners. I think there's a couple of things that I've observed is that they generally feel, generally they
00:02:15
Speaker
often do not have a marketing background. And they often have a lot of question, a bit of frustration sometimes with marketing, where they feel like it's a very cluttered world where in marketing we talk about a lot of things that doesn't always make a lot of sense to how they think about business.
00:02:37
Speaker
So that's one observation is that just they feel like marketing is a really cloud space. And we talk about a lot of new things. Marketers, we talk about new shiny tools and new way of doing things. And then the second part is the question I get almost always is, so how can marketing help grow our business?
00:02:58
Speaker
And a lot of times they have already invested in marketing, right? So they have been doing things maybe for a long time and they often feel like they don't really see the results that they were hoping for. And again, it usually focused around how do we grow the business?
Simplifying Marketing's Value
00:03:16
Speaker
How do we bring value to the business?
00:03:19
Speaker
So I think today maybe we can talk about that. I'd love to share more about that. I'm going to discuss why is it that they at least have the perception that marketing is not working. And I think very often it has to do with not understanding the
00:03:35
Speaker
how marketing brings value. And of course, also sometimes maybe marketing is not doing what we should be doing, but I think very often it's just that as marketers, we're not good at explaining in the language and the terminology that business owners and also very often finance use to determine value, business value.
00:03:56
Speaker
Yeah. I can see, I can see how that two things is what a lot of business owners may find hard to grab, especially when they don't have a marketing background. Right. So I'm very interested to go into the second question, like the second insights that you mentioned, like, so how to grow business with marketing, right? So in our, just now, but before we, we joining in the, in the podcast session itself, you mentioned a couple of things that, um, if we can simplify the marketing concepts, right?
00:04:25
Speaker
on how do they actually help to grow the business? Can you talk a little bit more about that part? Yeah, sure. I think if you had to put the hat on as a business owner or as a CFO or a finance person, when they look at one venue, what they're usually looking for is growth. Growth in terms of revenue growth, ensuring new markets, market penetration, winning,
00:04:54
Speaker
a high percentage of the existing buyer. And so growth is typically one bucket they're looking at. The second one is profitability or margins. How do we either retain or maintain our margins? How do we increase our margins? Those are the two things they're usually looking for. And another way of breaking it down is to look at what you can say is the reach of your company.
Key Areas for Business Growth
00:05:20
Speaker
How do we increase the reach? That means how do we reach more customers? How do we get more consumers, customers, buyers to buy our products or use our services? And then the second part is around, basically you call it sell more. How do we expand the wallet? So once you get a customer, how do we get them to, how do we keep them? And how do we get them to buy more products? And like I said, the third one really is the margins. How do we,
00:05:48
Speaker
maintain healthy margin for products, right? And I think the good news is there are maybe not so much news, but like the good story that my team can actually help on all three, right? So we have well-positioned to help with both growth, but also with margins. And I think the main
00:06:06
Speaker
where marketing can help is really around building the company's brand. And again, this is both consumer and also B2B. So most of my experience actually isn't B2B. But for B2B brand also, there's a lot of value in strengthening your brand. A stronger brand means you can reach more people. More people will know your brand. More people will consider your brand. But also a strong brand typically also can
00:06:37
Speaker
demand higher premiums, higher pricing. So that's where I think we as marketers can figure out what we talk about even though we are working on social media or digital or events, we need to figure out how do we tie the conversation back to what we do in terms of value to how do we help the companies reach more, sell more and increase margin.
Short-term vs Long-term Marketing Strategies
00:07:01
Speaker
There's also a lot of times that I heard marketers saying, I really want to grow the brand because I see that as a sustainable way to grow. But my direct report on my business owner actually are impatient and actually keep on asking me about how does marketing drive growth in this month, in next month, in this quarter.
00:07:22
Speaker
So I find myself marketers may sometimes find themselves only available to the short-term techniques. What's your view on that? Yeah, I think you're right. I mean, I think that's very common in companies that I think in the last couple of decades also. I think we've seen that shift where I think as marketers, we have kind of seen that, okay, we need to justify
00:07:45
Speaker
the ROI or what we're doing, right? And the easiest way to do that very often is to focus on on activities that typically has a very short term ROI, right? So that means we focus more and more on
00:08:01
Speaker
I mean, the language I think we often use is demand gen, lead gen, performance marketing, right? Things we can measure this month, this quarter and say, look, we spent, you know, $50,000 this quarter on performance marketing and these are the leads we got back. They are in the pipeline now, so hence this is our wireless. So I definitely agree that that is a trend and has been a trend.
00:08:25
Speaker
I think, and we can cover that today also here, I think when you talk to business owners, I think if you explain some of this concept around why it's important also to invest in your brand, they do actually get it. I think very often we're just not very good enough at explaining it as marketers.
00:08:43
Speaker
So I think they do see the value of the brand where you ask business owners, you know, don't you want your brand to be having a famous brand, a trusted brand? They absolutely do, right? And the same when you talk to finance, they also see the value of a brand. I think one way to explain this is to use the sales funnel or funnel.
00:09:07
Speaker
So whether you like it or dislike them, you'd use a funnel, but the funnel is a very good way to illustrate this, right? Where typically you have the funnel where you have awareness, preference, awareness, consideration, preference, and buying.
00:09:22
Speaker
whether you add loyalty at the end, maybe. But you could say again, if you kind of illustrate saying like if nobody knows your brand, well, that means nobody's going to be considering your brand. And again, very few people is going to buy your brand. So illustrating that, putting some numbers in place and saying right now, only 2% of the market knows about our brand. That means we are kind of limited to a very small piece of the overall market.
00:09:49
Speaker
I think the other thing also we can use is around price premium. Very often when you don't have a strong brand, you may often have to discount your pricing to get the deal. What you get is not ideal because you are looking to increasing or earning higher margins to create a profitable business. I think those are some of the ways to explain it, but I'm happy to also that we can go into that a little bit later to
00:10:17
Speaker
find other ways to kind of illustrate why it's important to build your brand awareness and your strength of your brand.
Timing for Brand Investment
00:10:27
Speaker
Maybe if this is a good time, we can also go into it now. How do we know when is the right time for us to start investing in building brands? And when we say investing brands, I think a lot of people wouldn't necessarily disagree, but there's also the questions around
00:10:46
Speaker
other than how much to invest or when to invest and what exactly does investment in brand entails? Yeah, good question. So definitely like I said, like when I've, some of the talks I've been to and meeting business owners sometimes, I do meet with business owners who are startup founders who are just very, very, very early stage in their business where they are
00:11:09
Speaker
still exploring their business model. They still haven't figured out whether they are this kind of company or that kind of company. So at that point, I would say it's probably a bit too early to put too much effort into building a brand. It doesn't mean you can't do something. You still need to figure out, of course, test the market and try and get some customers to prove your business model. But I probably wouldn't put in a
00:11:34
Speaker
a lot of investment into building a building brain because brain building does take time. It's not something you build over a quarter. It's a year-long and multi-year, sometimes multi-day investment you need to build on. But then the other part, I was like, if you never get started, then you never get there.
00:11:52
Speaker
But if you're really that early stage and you're still in that phase where you're still exploring different business model, it's probably a little bit too early, right? So if I can find another way of kind of putting that out, you say like, think about yourself when you are young, but like, we've been a bit late, but for young people maybe who are still in there early, like in their teens and twenties, trying to figure out what do I want to be like, right? It's like all the companies that define your own brand,
00:12:22
Speaker
Am I going to be a lawyer? Am I going to be a doctor? I'm going to be a professional football player. I don't know what
00:12:30
Speaker
whatever your ambitions might be, right? But when we're young, we're still trying to figure out who we're going to be, right? And I kind of see that's the same as an early stage startup. Sometimes we, you know, we have one idea of how the product can be used, but then as we start to older customers, we figure out actually it can also be used in a totally different way. And we figure out that actually our business is not really in the analytics phase, it's in something else. It's in the data cleansing space, right? So that's kind of like the same way you're young, you still try to figure out who you are.
00:12:59
Speaker
Once you've got determined, okay, I'm going to be a lawyer, then you can start investing and getting the right education, building the right networks, buying the right clothes to be a lawyer. I don't know. But before you make that decision, it's probably a bit too early. So that's kind of like a different way to kind of explain like early stage. So once you've kind of identified what I would call your deliberate strategy, you know this is the markdown.
00:13:24
Speaker
going after and you have checked that there's a good size of market, then you can put a more deliberate strategy and budget in place to go after that market. Got it.
Barriers to Growth and Misconceptions
00:13:38
Speaker
And once a company already identified that you know they are in that space, what would you suggest they kick-started to invest in brand awareness?
00:13:51
Speaker
and helps them to serve with a more mature company. Yes, I think actually the way I would look at it is to say, so like when I talk to my clients and they come to me and say like, how do we grow? I normally look for what are the barriers to grow, right? So of course it varies, but typically and it
00:14:13
Speaker
Very often, even if you are a startup with some years of experience and you are an established mid-sized company, but you haven't really invested that much before, typically, I would say there is a common
00:14:28
Speaker
theme around what are some of the barriers, right? So typically it's friend awareness. Nobody knows you exist, right? So probably you build a fantastic product or fantastic service, but nobody knows you exist. So nobody's calling you, right? So how do we get the world to know that we're actually out there? We have a solution to the problem.
00:14:50
Speaker
The other challenge could also be that we are just not available. So maybe our product is not available to those customers in the form of, you know, we can't sell this product in that market or those set of customers, right? So how do we make the product available? And that could be both in terms of packaging, distribution, pricing, right? So how do we fix that?
00:15:15
Speaker
But I'll say in most cases when I talk to companies, and also like I said earlier, most of them have already tried something right. So usually they have already on Google doing their Google ads. They have already maybe done some events. They have maybe some telemarketing people doing telemarketing for them. They typically only tried that. So typically the generally is that there's just not enough people and it's back to the reach. They're just not reaching enough people.
00:15:43
Speaker
Right. And also the second line is nobody knows or nobody trusts that brand. Right. So if you don't know a brand, but often it feels very risky to buy a new brand. So I think those are typically the barriers. So then you could break that down with the how do we fix, how do we remove those barriers? Um, um, so that, and that means how do we increase brand, uh, awareness? How do we increase, increase the brand consideration? And also how do we capture more of the demand?
00:16:19
Speaker
And also part two, why do people not invest in brand? I think also part of the reason is also sometimes even as marketers, we maybe don't have an accurate understanding of how advertising actually works. I see this quite a lot. There is a belief that if we just run a campaign, if you push out a campaign, whether that's an ad campaign or an email campaign, then it will persuade people to buy our product.
00:16:40
Speaker
So I was thinking this morning,
00:16:48
Speaker
But when you think about it, and also if you look at all the research that's been done, that's not really how advertising works, right? All promotion works. I mean, sure, like you can have examples where you show an ad and somebody sees you at it and say, okay, I need to buy your ice cream or I should need to buy your product, right? But in general, that's not how advertising works. And to kind of illustrate it, we can take an example, right? So I think a couple of weeks back, I had to ship a package from Singapore to London.
00:17:18
Speaker
And I had to make sure it got there the next day. Um, so it has to be an express delivery and then to make sure that it was there and I'm, I would know that, you know, it's on its way. I want to be able to track the package. Right. So, so then you say now I have a job to be done. I need to ship a package somewhere. So.
00:17:39
Speaker
Already, as soon as I kind of had, you know, I knew I had to do this, I already in my mind, I already had a few options in mind. One of them was DHL logistics, because I've used them before, probably because I knew that brand. And in my head, right, I kind of knew that they do express, and I also knew that they do tracking. So already now you could say, as soon as I have that need, I kind of in my mind already knew one option at least I had, right.
00:18:07
Speaker
Sure. Then I went to Google to search, right? To look for their website. And also when I search, I can see like in the Google search, there's a few other companies that come up. I can't remember the names. I was just express and express. There was a few other options, but these are not brands I know. Like, so you could say like, would I click on them?
00:18:27
Speaker
Maybe it was somebody in a brand I've seen before and might consider it, but these are brands I've never heard of before. So would I take the risk of putting my package to somebody I've never heard before? Maybe, sometimes maybe I do, but most likely we go with a brand we would know of, which I did in this case, right? So you could say,
00:18:51
Speaker
Here the brand is really powerful because it could have been another brand, but because I knew the brand and I think all the research we have, I think there was some LinkedIn reports also a while back that says most, at least in case of B2B buyers, most B2B buyers.
00:19:09
Speaker
When they start their buying journey, they're buying research. They typically already have two to three brands in mind before they even start researching. And at the end, 90% of those B2B buyers end up buying from one of those three brands.
00:19:25
Speaker
So that means if your brand is not one of those brands, your chances of getting that deal is quite small. Right. And that's really the challenge for a small brand is yet nobody knows us. And even if they get to see our ads, they're less likely to click on it, less likely to respond to it because you're just not a known, familiar brand.
00:19:47
Speaker
So you could say, if I go back to the argument before when you say, okay, but if ads really work by persuading people to buy, then you would think, if you showed me an ad to date, right? If I see an ad to data says we can ship packages to London, would that persuade me to buy? The answer is no, right? Because I don't have a job to do anymore. My packets are being shipped. So right now I don't have a need.
Brand Recall and Advertising Effectiveness
00:20:12
Speaker
So you can't really persuade me to buy anything.
00:20:16
Speaker
So maybe we say, okay, but then if I show you the ad, maybe you remember my ad next time. But again, all the research shows that typically, especially with sales promotion, and I will consider most Google ads in your search engine or advertising, if it's very sales promotion, we have a tendency as buyers to kind of ignore those, and they're not very effective in terms of generating brain memories.
00:20:44
Speaker
Right. So that, and which is what we need to do to, to generate a brand awareness and brand consideration. Um, so, so what we kind of can learn from that is that advertising really goes back to the main purpose of, uh, of brand advertising is to create brand memories so that next time I have a need, then, you know, the, hopefully the brand memory will come up and say, okay, you need to use brand X to do this.
00:21:15
Speaker
So it's both about creating brand awareness, but also not just awareness because I might know the brand, but also linking my awareness on my brand memory to this specific buying situation.
00:21:31
Speaker
I like this idea of thinking a lot because a lot of times we measure the ads that we put out directly to the bottom of the funnel of how many leads God has. But it is also, in your case, going through the examples that you mentioned, how do I measure brand awareness and the brand memories that the ads have successfully created for the audience? Because technically, it will bring in more leads in the future. It's just not now.
00:22:02
Speaker
So it feels like a gigantic issue that we kind of have to balance between in cases where it doesn't actually get as late. How do I know my assets actually working when it comes to brand awareness and creating brand memories for me to keep justifying the investment?
00:22:19
Speaker
Yeah, I think probably the biggest challenge for brand marketers or brand managers is how do we justify this? How do we know it works? And I think that's also back to what we talked about earlier. That's the reason why we kind of fall back on just keep doing more performance marketing, keep doing more things where we can show the results right now.
00:22:41
Speaker
And because it is difficult to show, um, the, the impact building brand, because it's, it's not something you just, you don't just show a couple of ads this week. And then only, you know, you have the brand awareness. It takes a really long time. And even if you can measure part of this, you can, um, you doesn't indicate as you can use to say like, is this working or not? But again, they move very slow. So it's like, it's almost like.
00:23:08
Speaker
You can look at things like your direct web traffic, like do more people come to your website? That's one indicator, but again, especially for small brands, the impact of the change will be so little that you probably won't see a difference in that corner, right?
00:23:24
Speaker
I think the first step here is when you work with your finance team and with your business owner, you need to set expectations here that it's not something you don't build, you don't become Nike or Salesforce overnight. It takes a long time to do this. There are ways you can track this. Like I said, you can look at things like direct web traffic, but again, you need to monitor it over a longer period of time.
00:23:48
Speaker
If you have budget, but again, for small brands that's typically too expensive is to invest in brand tracking surveys, panel surveys. Again, for small brands, I'm not a big fan of it because the volume is so low that it's really hard to get accurate data on it.
00:24:08
Speaker
So it's something you need to kind of set an expectation that it takes a while to build that. Over time, we're talking probably a year, you will start seeing improvements. And then when you're talking multiple years, you will start seeing improvements. But setting the right expectation upfront that you're going to invest some money here and then you won't see the results right now. Usually when you explain it,
00:24:32
Speaker
In my experience, like finance business owners, they do understand this, right? So we just need to be setting the right expectations. And then I think then finding some metrics, we feel like because over time we will monitor these and make sure that we're seeing progress. I would say it is a challenge also because
00:24:52
Speaker
Like I said, building a brand is not easy. There's a lot of different variables, both in terms of are you reaching the right audience with your, whether that's ads or events, there's multiple ways you can do this.
00:25:09
Speaker
But even if you're running, let's say you're running an advertising campaign, how do you know that people actually see your ads? I think it's, although we were promised something very differently in, what was that, a decade or two ago, with digital ads, digital ads were supposed to be easy to track and all this, right? But I think what we're seeing now is that actually it's, even though you can measure impressions and all these things, it's, you don't actually know if people have actually
00:25:37
Speaker
seen it, so you could talk about attention. People actually, you actually capture people's attention, right? So I definitely acknowledge that it's a difficult thing to subtract, but there are ways to do it, I'm saying. But the first thing is to set the right expectations upfront. In my experience, like I said, you will see it and also, I'm saying,
00:26:04
Speaker
We call it a misconception sometimes is that brand advertising doesn't generate any leads. Actually, I might say that's not true. We do see leads also coming from brand advertising.
00:26:16
Speaker
When I say brand advertising, it doesn't always have to be advertising as it has multiple, many ways you can build your brand. It can just be being at the right events and finding other ways and reaching out to your target audience. You're definitely right that it's
00:26:36
Speaker
setting the right expectations there so that people don't say, hey, you spent 50,000 on this and it didn't yield any results. So maybe you should stop doing it. And I think that's very often is the challenge is that we do these bursts of advertising and then we say, okay, now we've done it last quarter. We don't have to do it more this year, but all the research shows you this needs to be a consistent approach. So when you do this, you need to look at, say, how do we spread the budget out so that it's not a stop-stop thing, but it's something we run continually.
00:27:05
Speaker
Yeah. Talking about spreading the budget, do you have any techniques that you can share with our audience on how to spread the budget in this case? I think just like you mentioned, using the sales funnel to illustrate, I can imagine you probably may also use...
Balancing Brand Building and Demand Capture
00:27:24
Speaker
One idea on top of my mind is using the sales funnel to also illustrate spreading the budget. I'm curious, what's your point of view would that be?
00:27:31
Speaker
There is another thing that's a correct ratio, whether you should spend 50% on brand building and 50% on your demand catcher. I think it's finding a balance, or at least try to do both. I've seen so many articles where people say, either it's 80, 20, 50, 50. I don't think there's a... I think it depends on where the company is at. But I think the key thing is that you do both.
00:28:02
Speaker
I think one thing to consider, I think, especially for a smaller business where we don't have a lot of budget, how do we get enough coverage? Of course, you might have to limit it, but I'll say one learning there is that it's better to get... It's better to show my ad to you once.
00:28:26
Speaker
Rather than better to show my one and I add once to many people than to show my ad multiple times to a few people. So if you had to choose that. So when you work with your idea, if you can work with a media agency that can help you do this, right? But you do the, the first one is just to, it's better to get that first kind of attention on your brain. Then just focusing on a few years. So I guess that they go there to go for reach rather than more touches.
00:28:55
Speaker
And the reason they're simply is once people have been exposed to your brand once, they are more likely to buy from you, right? Showing a smaller group of people the same ad 10 times, they might remember the brand, but you get a much smaller reach. So I think one way of stretching your body that way is to say, go for reach rather than more impressions. I think, but that's unless you're really good at, you need to tell yourself, you probably need to work with a media agency to do it.
00:29:24
Speaker
And I think the other thing also to remember is that your brand campaigns typically are different than your sales promotion, right? So what we use typically in our performance marketing ad copy and all this, it doesn't work, right? So like what is very sales promotion works really well for demand capture.
00:29:43
Speaker
It doesn't work that it's not very effective in terms of building brand memories. So you do also need to invest in coming up with a brand campaign. And again, one learning from my side is that investing in creating a good creative campaign is worth a lot. Instead of trying to create new campaigns every quarter, I would say I'd rather spend a bit more on creating a really great campaign and then run it for a really long time.
00:30:13
Speaker
I know sometimes we as marketers, we get tired of seeing the same ad, same campaign, but reality is that most of our prospects, they don't think about our brand everyday. So even though we are tired of seeing that brand campaign, the market is not. So I bet I spend a bit more to get a good creative campaign.
00:30:31
Speaker
And if you can afford to work with a creative agency to come up with that and then just run it for every long time. I mean, I've run campaigns for more than a year and it works. So instead of trying to keep coming up with new things, go with the same messaging and also partly because.
00:30:48
Speaker
building memories, memory structures in your prospects of in their mind and their brain, right? It takes a lot of consistency. If we keep changing our messaging and we keep talking about different things, it's hard to kind of position your brand around a specific buying situation, right? So remember that it's not just about brand awareness. It's also around linking it to a specific buying situation.
00:31:15
Speaker
So you could have cases where it's always good to have increased awareness, but if people don't associate your brand with a specific buying situation, even if they know your brand, they might not think about you in a specific situation.
00:31:33
Speaker
I think the case study I read a while back was around Salesforce. Salesforce is a really famous brand. Most people in B2B at least have heard about Salesforce. So if you're asking, do you know Salesforce? They'll say, yes, I know the brand. So high level of awareness. But you may not associate them with all the things they actually do.
00:31:51
Speaker
So they typically, most people know them for Salesforce Automation CRM. You might not know them for other things around customer support or service ticketing system. I know I used to work with centers competing with them very often that people didn't associate their brand with doing these things. So that's why it's important that we link brand building with specific buying situation.
Challenges of Over-focusing on Demand Capture
00:32:20
Speaker
So if I can go back to maybe like also like some of the observations like when I go back to meeting with business owners. So I think very often the feedback from them is that we have, like I said, we have already invested in marketing. And what I see very often and I also provide a lot of experience in marketing right as marketers.
00:32:38
Speaker
We tend to over rotate and focus a lot on that bottom of the funnel. And we often, we see teams drop over this, right? And we try all kinds of things. We do content marketing, right? We package things up as content, educational content, even though it's full of marketing insight. And then we push it out, hoping somebody will download that, right?
00:33:03
Speaker
We do, of course, like performance monitoring, Google search, which definitely is a good investment, right? But it only really tight instead with buyers who are in market to buy, right? But the OSD things, like if I just looked at my LinkedIn, like almost every day I get somebody contacting me on LinkedIn from somebody says, we can do your lead gen for you, right? You just, you pay us a hundred dollars a lead and we will do your lead generator for you.
00:33:27
Speaker
I've tried this, it never works. I've never had an experience where this works. They will send you some leads, but sales will just throw leads back. I'd also say these are not real leads. I think again, it's
00:33:40
Speaker
When business owner comes to me and says, we've tried all these things and it doesn't work, it's going back to the examples we used just before, right? Like, if you're trying to show me ads or you're targeting me, whether that's a TD marketing campaign or email campaign or content syndication, we need to consider, well, one key concept is understanding of, if your total market, there is people who are in market and people who are out of market, right? So like I said earlier,
00:34:08
Speaker
Now that I have shipped my package, I am out of market. I'm not looking for somebody who's going to ship my package. So you can show me all the ads you want. You can send me all the sales promotion. I don't have a job to get done. So I think that's the first thing also we very often forget is that as marketers, we cut up
00:34:28
Speaker
Forget that rule that we kind of target everyone and thinking that, well, they must respond, right? If I just send them or call them, then they must be, if my promotion is good enough, they will respond and come and buy our products, right? But really only a small percentage of the market is a market to buy, right? So if you are selling
00:34:51
Speaker
Like in my case, previously, if we're selling CRM software, I think companies on average buy new CRM software every five, six years. So we say every five years, that means like every year, only 20% of the market.
00:35:03
Speaker
is actually in market to buy something. And that means if you look at it on a quarterly basis, it's just 5% of the market would be in market. So we're kind of limited as a company in terms of how much we can sell this quarter because that's only that small piece. When you say, if then my company selling to those 5%, if I'm a small brand in that market, let's say I'm at 3% market share, I would basically only get 3% of that 5%
00:35:32
Speaker
So it's really a tiny segment of the market we can go after in terms of demand capture. So instead, and that's where the brand building comes in again, we need to focus on how do we increase the awareness around our brands to all the people who are not currently in market so that once they have a need, they have a job to be done, we hopefully get one of the brands that they consider.
00:36:00
Speaker
God, I really resonate with the idea of we have to still advertise to the ones that is out market because by the time they are in market and when you advertise to them, like you see, they don't have credibility and trust to actually put us into the consideration and we would then lose them. You mentioned also in our previous conversations that if we only focus, keep on focusing off the bottom of the funnel as our technique, we will soon basically be stagnant
00:36:31
Speaker
and had some new returns. Yeah, and actually I've been there myself writing previous companies where we were growing. And I think the challenge sometimes has a marketer, right? We do great the first quarter, right? And we get some need to generate some pipeline. Next quarter, we expected to do a bit more, right? And then a bit more, a bit more. Every quarter, it's a bit more, right?
00:36:58
Speaker
At one point, at some point, you're going to hit that plateau where you can't reach the, if that's only 5% of the market out there. And based on the size of our brand, if we are at 3% market share brand, we're not going to get 80% of the demand out there. Because like I said earlier, people buy from brands they know. So we will only get a small piece of that. So eventually you'll get to a point where even if you have the budget, you simply cannot spend it on performance marketing.
00:37:28
Speaker
So that's not to say like, don't get me wrong yet, I'm not, you know, believing that we do need to do performance marketing, we do need to have demand capture campaigns. But there's going to be a point where unless you invest in building a brand and reaching a big audience, you're going to hit kind of like a ceiling where it's just really hard to keep growing quarter over quarter.
00:37:51
Speaker
I think especially in technology, we've been asked every quarter to do 15% more than last quarter and then just keep going. You're going to hit that ceiling eventually where it gets really difficult.
00:38:04
Speaker
Plus also it's like, I feel like if you don't invest in your brand also, that means you are kind of constantly have to invest a lot on your demand capture side, which does become quite extensive to the end. Whereas over time, over years, as you build your brand, then people start actually coming to you without the need to do as much demand capture. And again, like I said, we talked about earlier,
00:38:32
Speaker
You can charge a premium because you are now an established well-known brand. You do need to do both. When I talk to business owners, I usually try and explain that to say that there's basically two things we need to do in marketing. One is that first bucket, which is the top of funnel.
00:38:53
Speaker
something referred to as mental availability or brand building, but it's like, how do we get, increase our reach? How do we reach more people? How do we build brand memories so that people like to get to know and consider and prefer our brand? And then the other bucket is really the availability. It's like once people are in market, we are super easy to find, try and buy our product.
00:39:20
Speaker
Right. So, and I think it's, you know, you need both, especially also in B2B. I notice sometimes the feedback on the questions I get from, from business owners say, yeah, but in B2B, we don't really need brand building. That's something for consumers. That's not true at all. Like we do need both here as well.
B2B Branding Success Example
00:39:39
Speaker
And I was just thinking about trying to think about some good examples in B2B brands that are doing this well.
00:39:46
Speaker
And, uh, you know, because like some of the clients I met, you know, uh, one is a, you know, very industrial products. You say like, who, you know, who cares about branding and industrial products, right? But, but actually within your category, like I said, we don't always all have to be a new Nike or Apple or famous brand like this, but like within your category, within your market, you should definitely build your brand.
00:40:08
Speaker
By then, one example I was thinking IT because I was driving home and we had some construction happening across the road here, was the brand Caterpillar, or CAT, right? So even if you're not in construction, I'm sure you've seen their big excavators and all bulldozers, right? These big yellow machines down on the road, on the construction sites. Super famous brand, right? The CAT were there, I think it's like a triangle on the brand, and they typically always, I think they're all yellow.
00:40:37
Speaker
Right. So, sorry, if you're in the need of a new bulldozer or an excavator, my caterpillar is definitely a famous brand that you would think about. Right. So let's say how to, you know, if you go back to this two buckets, right. So that's where you cover it done really well in B2B to build a famous brand.
00:40:54
Speaker
They do really well in terms of using what we call distinct brand assets, right? You see them everywhere. Everywhere you go, you see these big yellow machines with the name CAPCAT on them, right, our Caterpillar. So they've done really well in terms of building that brand. And at the same time also, you know, they've done great also in terms of their physical availability, in terms of making the product easy to buy and try.
00:41:22
Speaker
try but easy to buy, right? And so give me some like, so
00:41:29
Speaker
availability is, it's not just, you can say, you know, the consumers, you usually think about it as when you go down to the grocery shop and you need to buy Novo X, the product is actually available on your shelf and it's easy to find, right? But in B2B, often maybe one way to make your product and the innovation is through search, right? So when I go to Google search, I can find a product, I can come to your website and it's super easy on your website to buy the product.
00:41:53
Speaker
But sometimes also we need to think about things like packaging, pricing. So you can say a product like Caterpillar. I mean, I'm not that familiar, but I bet I don't know what they cost, but I would imagine they are probably very expensive machinery. So maybe if you are a small construction company, you say, love to have one of those bulldozers for my next project, but I just don't have maybe a million dollars. I don't know what they cost. But if you go to Caterpillar's website, you'll see they actually also do leasing.
00:42:23
Speaker
So if I just have a small project, I actually don't need to buy the machine, I can just lease it for my next project. So that's a great way of saying, probably a smart marketer there who says, how do we make the product available to the customers in a way that more so we can reach a better market, more people can use our product.
00:42:42
Speaker
So I think that's the last piece that sets the fiscal availability is, as marketers, how do we make the product available to as many people as possible? I think the key thing here is as a brand, for a brand to grow, you always need to look at how do we get basically more customers to use our product.
Expanding Customer Base and Conclusion
00:43:00
Speaker
So your brand size is basically determined on the number of customers you have.
00:43:06
Speaker
So you should always look at how do I expand that? So of course, typically we look at how do I get customers from my competitors? But you should also look at what you can call non-consumers, people who are not currently consuming your type of products. Is there a way for us to make the product available then so they actually can use the product?
00:43:27
Speaker
Right. And I think Caterpillar is a good example. There is a, it's probably smaller construction for when we say like we, it's just not, you know, available to us because we can't afford to buy or own such a product. But by making it available through leasing or a rental, suddenly then I can actually also use the product. So now if I can increase my brand's reach, I can reach people who in the past couldn't use this product. Now I had increased my market rate. So as marketers, we need to kind of work on those two, the branding and the availability.
00:43:59
Speaker
Sounds good. I like how you wrap up with giving us two key summary, whereby we need to actually have a balance of investment brand, investment ability, building up the brand memories, building a brand awareness, then the brand memories, and ultimately also invest in the bottom of the funnel to make sure the physical availability is there. That includes not just it is available, but if we do the pricing and the packaging right, we can potentially increase the market.
00:44:30
Speaker
as you mentioned, include a non-consumer and not just a competition customer in this case.
00:44:37
Speaker
This is definitely a very insightful episode, Henrik. I'm very, very glad to have this second round with you. I've learned so much more. And for the audience, if you like this episode, please make sure you leave a review for us so that other listeners can also have a better way to find this as well. Once again, thank you, Henrik, for joining us and thank you everyone for listening.
00:45:06
Speaker
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00:45:49
Speaker
Thank you.