Rethinking B2B Marketing: The Compelling Case for Brand

 

Drew: Hello, Renegade Marketers. I’m excited that you’re here to listen to another episode of Renegade Marketers Unite. This show is brought to you by CMO Huddles, the only marketing community dedicated to inspiring B2B greatness, and that donates 1% of revenue to the Global Penguin Society. Wait, what? Well, it turns out that B2B CMOs and penguins have more in common than you think. Both are highly curious and remarkable problem solvers. Both prevail in harsh environments by working together with peers. And just as a group of penguins is called a Huddle. Over 352 B2B CMOs come together and support each other via CMO Huddles. If you’re a B2B marketer who could share, care, and dare with the best of them, do yourself a favor and dive into CMO Huddles. We even have a free starter program and of course, our robust Leader Program, neither of which requires penguins hat. Thank goodness, join us. And before we get to the episode, let me do a quick shout-out to the professionals at Share Your Genius. We started working with them over a year ago to make this show even better and have been blown away by their strategic and executional prowess. If you’re thinking about starting a podcast or want to turbocharge your current show, be sure to talk to Rachel Downey at shareyourgenius.com and tell her Drew sent you.  

Narrator: Welcome to Renegade Marketers Unite, possibly the best weekly podcast for CMOs and everyone else looking for innovative ways to transform their brand, drive demand, and just plain cut through. Proving that B2B does not mean boring to business. Here’s your host and Chief Marketing renegade Drew Neisser.  

Drew: Hello, Renegade Marketers Welcome to Renegade Marketers Unite the top-rated podcast for B2B CMOs and other marketing-obsessed individuals. Alrighty folks, you’re about to listen to a Bonus Huddle, a specially curated Huddle that we run once a month with experts sharing their insights into the topics that are most important to our CMO community. We call them Huddlers. The expert at this particular Huddle was Peter Weinberg, Head of Development at LinkedIn’s B2B Institute, who joined us for a discussion amazing discussion on rethinking B2B marketing. I know you’re gonna find it inspiring. So let’s get to it. All right, so let’s get his Bonus Huddle started. I’m excited to welcome Peter Weinberg. Peter Weinberg is a global leader at the LinkedIn B2B Institute, where he researches and develops contrarian and that’s a key word here. Contrarian marketing strategy is designed to give LinkedIn clients a competitive edge. Peter has spent the majority of his career at LinkedIn in various sales and consulting roles. Prior to LinkedIn, Peter worked in creative planning at Dentsu, in fact, I think we overlap briefly there and media planning at GroupM. Outside of LinkedIn Peter is a profoundly unsuccessful science fiction novelist and a devoted Nintendo player. Peter was born raised and eventually will die on the island of Manhattan in New York City or at least so says his bio. So welcome, Peter. How are you? And I guess I don’t have to ask where you are.  

Peter: No you don’t, Drew. I am right here on the island of Manhattan. Although I’m ashamed to admit I recently moved to Brooklyn. So I might need to update that bio. But I can, as long as I come back to die in Manhattan, the bio will be accurate.

Drew: It will be and you know, I mean, isn’t Brooklyn the new Manhattan anyway?  

Peter: It’s just New York City. Manhattan is just so old, you know, bad. So 1850s. You know, Brooklyn is the future.  

Drew: It is, all right. Well, speaking of the future, we’ve got a lot of ground to cover, because you’ve done so much research over the years that support spending more on demand creation, and we’ll call that brand spending then on demand capture. And I just want to point out for Huddlers, we talk about this difference a lot over the course of years the difference between demand creation and demand capture. And Peter just so you know, there are a lot of CMOs who will not use the word brand internally, because brand feels like squishy stuff that doesn’t drive revenue. So demand creation and demand capture. Those are acceptable words in a lot of C suites. Let’s start with the evidence that you’ve gathered that supports spending more on demand creation versus demand capture, and I know there’s a different balance for B2B than b2c but What’s the evidence that supports that this actually works?  

Peter: That’s a great question, Drew. It’s the billion-dollar question. Yes, as you said, first and foremost, B2B marketers, especially very over-invested at the bottom of the funnel tend to invest very little at the top of the funnel. It’s really what we do here at the B2B Institute. Over the past five years, we’ve just been trying to make the case for top-of-funnel investments, using empirical research that ties to financial outcomes that, like CFOs can understand who are often one of the biggest barriers to brand investment. So you asked about the evidence, I guess I would say three things. First, I think there’s a very underrated data set in the world, which is called common sense, very underrated empirical data source. So what would the common sense answer to the question be, it would basically just be like this, you cannot buy a brand that you don’t know exists, and that you’ve never heard of. It’s like physically impossible, right? If you don’t know something exists, you cannot purchase it. So to the extent that the job of brand or demand creation is to let people know the brand exists, well, just basic common sense would say in the sequence of events, you need to have that before you can have anything else. And then of course, we also know from common sense, we don’t usually buy brands that we’ve never heard of, I think we are inherently suspicious of a weird company we’ve never heard of, I mean, imagine two people come to pitch for your CRM business. One is Salesforce, the other is like Jimmy’s discount consulting, CRM Shack, maybe 10 out of 10, people are going to go with Salesforce, just because it’s familiar. And the fact that it’s familiar, tells you a lot about the strength and credibility of the organization. So that’s the common sense argument. If you’re not swayed by common sense, I think there’s two really good empirical data points that you could use. The first is the research from Les Binet, and Peter Field, who are mentors of mine, and really the first people that we partnered with at the B2B Institute. So for those of you who don’t know Binet, and Field are these British gentlemen, and they’ve gotten very famous for a very simple idea, which is just that there are two types of marketing, what you’re calling demand creation, demand capture, they call it brand building and sales, activation. But whatever you call it, their key idea is that you need a balance between these two things. And what they do is they look at econometrics. So they look at empirical data showing we did X from a marketing perspective. And then we saw why from a financial perspective, they look at business effects, by which we mean revenue growth, profit, growth, market share growth, etc. And the key idea they’ve gotten famous for is the 6040 rule, which is that your financial performance is maximized when you’ve got something like 60% at the top of the funnel spent there, 40% at the bottom of the funnel, we did the first ever B2B Cut. So we just looked at the B2B Econometric cases in the IPA databank. And it was more like a 50/50 split. But again, that’s the recommendation, what you really see in B2B is more like a 1/99 split, where nobody’s really doing anything at the top of the funnel. So there’s common sense, there’s Binet and Field. And then the final one I’ll reference, the Ehrenberg Bass Institute, probably the most important marketing think tank on the planet right now. And they have this idea of mental availability, how easily a brand comes to mind in a buying situation. And there is a 95% correlation between your mental availability, how easily you come to mind, and your actual buyer penetration to how many customers you have, common sense, and then two data points that link these brand marketing metrics to financial outcomes. And after five years, that’s probably the best I could do to answer that question. 

Drew: All right, well, we’re gonna take these one at a time, I think it was Harry Truman, who said if common sense, were so common, more people would have it. It is a little uncommon. I think as I’m imagining this conversation between the CMO and the CEO and the CFO, and they just went through the last five purchases they did. Ask them how many brands that they purchased, they bought from companies that they had never heard of. The answer is zero, sort of the second part of that is, ask every salesperson how it felt when they called somebody and said, “Where are you from?” and how that went. There is a way to build more anecdotal support for the common sense thought. The Binet and Field’s balance thing, let’s go into that for a second. And so if we got all the folks that are on our call right now, and there’s a goodly number of folks, and we said 50/50 is what you’re going to spend top of the funnel versus sales activation, as you call it, or demand capture, as we often call it here. They’d roll their eyes and say good luck, there’s just no way that I could sell that. So let’s dive into that a little bit more. and see what ammunition we can help them give because I think a lot of B2B marketers, and some of them have b2c in the background, they know inherently what you’re saying makes sense. But go into a PE firm or going to a VC firm and saying, “Hey, we need to re-spend our money, we’re spending it wrong.” And these people, by the way, they’re talking to aren’t stupid, but they want revenue this quarter, demand this quarter. So how do you sell 50/50? 

Peter: First and foremost, it’s not easy, right? If it was easy, most people would be spending 50/50, they’re not, they’re spending 1/99. So you know, I’m not out here telling you this is like just a simple conversation, just got to whip out three PowerPoint slides, and you’ll be spending 50% of your money at the top of the funnel. It’s not easy, but I’ll go back to that word you use ‘contrarian’ Drew because we are obsessed with contrarian ideas. And the reason we’re obsessed with contrarian ideas is because it gives you a competitive advantage. If you do something that everybody else is doing, then you get average returns if you do something nobody’s doing and it’s the right thing you get above average returns or alpha. So to me, in other words, like the fact that it’s so hard to sell in-brand is why it’s such a huge opportunity. Because if you’re investing in brand, you can be one of the only CMOs doing it. I’ll give a shout-out to Bryan Law, who I just learned is on the call. Bryan law is one of the few CMOs who’s like very well-versed in the Ehrenberg Bass research and has used it successfully to make the case for brand internally. And ZoomInfo is running a brand marketing campaign, which is actually a pretty novel concept in B2B. So it’s rare, but it’s possible. And the fact that it’s rare and possible is the opportunity. But I guess to answer your question more directly, Drew, I think you start by, you know, you need to explain the difference between short-term results and long-term results. And that’s, again, not easy to do, people struggle to balance long-term results with short-term results. In civilization, you see that payout with like climate change and the national debt, people think short term. And of course, it’s true in business. But I think the truth is, in business, this is not a totally foreign concept. Most people know that long-term growth is actually more important than short-term growth. You can’t just play long, I think you reference the famous John Maynard Keynes quote, “In the short term, we’re all dead.” But like, let’s say you work at a public company, and you look at your stock price. And you say, “Okay, what goes into my stock price?” An analyst would tell you something like 80% of the value of your stock is based on future cash flows, that will not come in for 10-plus years. So I think there’s this misconception that like Wall Street short term, we’ve got to be short term, but actually, Wall Street is mostly evaluating firms based on how many sales they’re going to do in the future from future buyers. So then you have to ask yourself, okay, 80% of my value is from future customers. How do I influence future customers who don’t need CRM or analytics or business insurance right now? How do I influence that audience, which is about 95% of the market that doesn’t need to buy the category right now, while saying like buy now, buy now, not going to really work on people who won’t need to buy the category for five years, it’s really more about building a memory of the brand that is likely to be recalled when people enter the market. So I think there’s a way to like work backwards from finance, and say, What does finance care about? They care about future cash flows, where the future cash flows come from, they come from future customers, how do we influence future customers? It’s about again, building these like long-term memory structures in the minds of buyers. I don’t think things should be positioned as totally binary, there’s already a question, can you do both? I think it’s helpful to think of these as separate activities. Because the type of creative for example, that builds a long-term memory is a little different from the type of creative that gets somebody to buy right now. But it is fair to say that like an ad that works in the long term will also work in the short term, if you have a highly effective brand campaign, you should start to see results pour in right away from the people who are in market for the category. The problem is, again, 95% of people are not in market. So most of the effects are going to be distributed into the future, which again, is a financial concept. That’s amortization, that’s a capital investment. Like you build a factory, the revenue is not recognized in the next quarter, it’s recognized over many future quarters. So brand marketing works like that it works like cap x even though it’s reported on as off x. So all of this is an unexpectedly long-winded way of saying like there’s ways to connect marketing language and brand marketing language to financial language. And I think we as marketers need to lean more into that. Instead, we’ve leaned into like I would say the opposite things like brand purpose, brand perceptions, things that are like actually inherently not financial sounding. And that’s why you see a lot of friction between finance and marketing. 

Drew: We’re talking about investments, we’re using language that CFOs understand – they’re investing in capital. They’re investing in R&D. And they’re investing in the notion of long-term market creation versus long-term capture versus short-term capture. I get it. And I don’t think there’s anybody on this call right now that would argue with this necessarily. In the long term, we’ll all be dead quote here. CMOs don’t necessarily have a long-term, they have a pretty short window. So I guess what we need to understand is if we have two to three years to do this in an average tenure, and you’re going to put your money to increase the odds – if you want to stay at this company for four years or five years – the payout that you’re talking about is 18 months, 24 months, 36 months. So I think we need to define the long term a little bit better to help CMOs go, “Okay, this isn’t gonna help in six months, but it is going to help in 18,” kind of thing. And so, is there any math in that area?  

Peter: Yeah, I think there absolutely is. First of all, again, not easy, there is a principal-agent problem here, right? Like our personal motivations as a CMO or as a marketer are not necessarily aligned always with what is in the best interest of the business. If marketing works over decades, and most marketers are not in their job for decades, that’s an incentive problem. Generally, sticking with your old creative is more effective than launching new creative, but what marketers like is to stick with, you know, their predecessor’s creative. You don’t win a Cannes Lion for running last year’s creative. So there is like a fundamental incentive problem. Then, I’d say we can’t probably capture that today, Drew. But I think you do have to quantify these things. The reason why the bottom-of-funnel marketers get all the money from finance is because they walk in with things that look like financial models that say, you spend more money here, you’ll get this many leads, which will convert into X number of sales, and finance is okay. I can basically understand that. Then the brand marketer comes in with their mood boards and brand personality and it looks like arts and crafts versus finance and math, which is what the bottom of funnel people came on. So all of that is to say I think there are ways to quantify the value and impact of top-of-funnel marketing. It’s not always as easy, but it’s possible. And it’s measuring things like mental availability, which we can talk more about. But it’s measuring the likelihood that your brand will come to mind in a variety of buying situations. And are you increasing that number over time? And then there’s a series of sub-metrics that determine whether your mental availability is going up or down. So I think it does start with leaning into the quantitative nature of brand instead of the qualitative and creative aspect of brand that I think, is really what’s been emphasized over the past 10 years, 20 years, which is why to your original point Drew, brand has a brand problem has been recreated by a lot of marketers who are allergic to the term, understandably so. 

Drew: And so the thing about demand generation and demand capture is – okay that sounds like it’s aligned with the business. So I don’t have a problem with folks not using the term brand. But you talk about mental availability. Let’s go into that a little bit in terms of what that looks like from a measurability standpoint and how that plays out a little bit. 

Peter: Yeah, I think in this Ehrenberg Bass revolution, which has really revolutionized CPG marketing at places like Mars and Procter & Gamble, you see it starting to spill over into other B2C categories and B2B. This idea of mental availability is like the bedrock concept in the Ehrenberg Bass revolution. I always think Drew it’s easiest to just demonstrate it with an experiment. Would you like to participate in a psychological experiment?  

Drew: Yes, please. Let’s do it. Okay,  

Peter: So let’s try this. Let’s say you’re on a tropical beach in Cancun and you need to order a beer what brand comes to mind? 

Drew: Dos Equis. 

Peter: Dos Equis, interesting. Anyone on the call, what will people say, give me in the chat maybe. When you ask people in the world that, nine out of 10 times they say Corona, one out of 10 times they say Dos Equis, which tells you there is like a probabilistic nature to which brand comes to mind. Let’s switch. Now, let’s say you’re at an Irish pub in Dublin. What beer comes to mind? 

Drew: Guinness.

Peter: Great. So everywhere in the world, you hear Corona and you hear Guinness. That’s not because like the universe dictated that you must order Coronas on tropical beaches and you must order Guinness in pubs. It’s because the marketing department has tied the brand to that buying situation or what’s called a category entry point in the academic research. Corona’s advertising is all “find your beach.” It’s pictures of beaches with a Corona, Guinness’s advertising is all people in Irish pubs drinking Guinness. It’s like overly simplistic to say which brands come to mind when you need a beer because within that category there are many different situations in which you buy a beer and different brands come to mind in different situations. And that is basically what mental availability is. It’s the likelihood that your brand comes to mind in a variety of different buying situations. I’ll switch to CRM, okay. People don’t buy CRM, there are 33 actually different buying situations for CRM. Some people want to forecast sales better next quarter, some people want to do marketing automation. Some people want to deliver personalized interactions to customers – three unique buying situations, different brands are retrieved in those different situations. If you ask buyers which brand do you think of in this CRM buying situation, you get one set of brands, another you get another set of brands. And if you do a leaderboard, you’ll see the biggest brand, Salesforce, is the biggest brand because something like 90% of buyers think of it in at least one situation. And on average, people think of it in about 13 different situations versus a small brand – let’s say Twilio – only 50% of buyers can link it to even one situation. And it’s five situations on average. So if you’re Salesforce, how are you going to grow? You’re going to grow by linking the brand to more situations, there’s 33. You’re only thought of in 14. If you’re Twilio you need that too. But it’s more like at least make sure 90% of the market can think of you in one situation. So big brands can probably go after multiple buying situations, small brands have to be a little more focused maybe on one situation. But I’ll just go back to this Drew, being a more commercial framing of what brand marketing does. We’re thought of as two points more sexy and innovative to your CFO. They’re like, “Okay, cool, thank you, please get out of my office.”  

Drew: But in some ways, the notion of share of voice is baked into that as well, right? Because in theory, your likelihood to be in somebody’s brain is higher if your share of voice is higher. Right. So we have a couple of questions and a comment. Bryan Law said that during a recent session with Ehrenberg Bass for demand versus brand, and what it really talked about is that brand work should also have a short-term impact. And this is a question that we also got from the audience, like a trade show in theory could do both. You can capture interest right then and you can generate interest on a broader level with the audience at the trade show. So the key point here is demand generation. Don’t call it only long-term because in theory it could if you do it right could have a short-term impact as well, right?  

Bryan: I think they referred to it as like, brand is not like some time bomb where like nothing happens and all of a sudden it explodes. Like if it’s going to work, it has to start showing you indications that it’s going to work. It’s just the combination of those they’re additive over time, you should be seeing sort of improvements in sort of your funnel performance. An example was something that we did with LinkedIn is when people saw the brand ad, they were more likely to engage with our demand ads. And so there are ways to actually start to see sort of initial indications that will give you confidence that it’s going to be beneficial over time. So you’re not just hoping and thinking, “I hope I don’t get fired, because I just spent a lot of money. And I’m not going to know for a year.” You do need to find out if it’s actually having meaningful impact. 

Drew: The messaging. and the creative that you do for top-of-the-funnel work is different than the messaging that you’re doing for demand capture is that right? It’s not buy, buy, buy. It’s planting a seed in someone’s mind. 

Bryan: Yeah, so at least the way that we’re doing it is thinking about mental availability, what are those buying situations? What are the thoughts, feelings, emotions that are triggered in those buying situations, ideally, where’s their whitespace between how people are thinking about your category, and then how they’re thinking about you and your competitors, and then figuring out which of those who’d like the lowest hanging fruit to take advantage of, and then really trying to attach your brand to those category entry points, as Peter alluded to. So that’s sort of like the top-of-funnel messaging, or at least we’re trying to focus on.

Drew: Okay, thank you, Bryan. Peter, let’s talk about category entry points. And what really means that and then I do want to talk about creativity, because I know that’s a big part of this too. It’s not just spending money, you can’t do boring brand work and cut through. So let’s talk about category entry points, what that’s all about.  

Peter: Yeah, category entry points is pretty straightforward. You start with the 95/5 rule, probably the hottest concept we have here at the B2B Institute. So what is the 95/5? It’s that in any category, CRM, beer, business insurance, it doesn’t really matter. There are two segments, people who need to buy the category right now, people who are going to buy the category in the future, and it’s in any category something like 95% of people are not in the category to buy, they’re future buyers, and they become the 5% who are in market. So category entry points very simply you could think of as the pathways into the category 95% of the time, you don’t need CRM. But when you do, there’s 33 category entry points that move you from not needing CRM buyer to you need a CRM solution right now. So it’s really a critical point, because I’d say both at the bottom and top of funnel, you need to be aligned around those specific situations, you need to understand that the big entryway or gateway into the category is that people need to forecast next year’s sales. So let’s make sure our top-of-funnel marketing says think of Salesforce when you need to forecast next year sales. And then let’s make sure our bottom-of-funnel creative is more like, hey, if you need to forecast sales, right now talk to a sales rep or here’s a demo of how you can use Salesforce to forecast sales better, right, which gets to the point of the creative being a little different, because it’s for in market bursts out market, but they’re both aligned around the same category entry points. Every category has different category entry points. So you need to identify what they are. And then you need to choose the ones that are the most valuable for you, which is a whole other methodology. But that’s like the basic concept. 

Drew: Got it. And many of the research sources that you’ve cited or documents that you have, we’ll put links here. And we also have links on cmohuddles.com. So you can see the scorecard white paper, we’ll include the link in chat right now. And also in the show notes, where a lot of this other research is referenced, it occurs to me, that I’m thinking that some of the CMOs may be wondering about this too, which is, sometimes your customers or prospects don’t know they need your product or service. In fact, they’re not in the market at all. When you present the problem, they go, oh, yeah, I do have that problem. My demand thing over here and my CRM are not speaking to each other, I need some kind of interim code, that would be nice. And they hadn’t recognized they had the problem. That’s different than you’re gonna buy a car every X number of years. And so they’re gonna cycle through and at some point, they’re old cars gonna die, and they’re gonna need it. There’s a lot of products out there that are being sold that are not replacements or substitutions, they’re additive. Where does that fit in this plan? I mean, in some ways, because you’re selling a new way of doing things, you probably need to do more brand work. But what’s your thinking on that?

Peter: You know, I meet a lot of marketers, especially in B2B Tech, where I spend a lot of time. We’re all like, well, I have an entirely new category that didn’t exist before. Surely, you know, there’s something different about my marketing situation. And I would argue that’s really not because here’s the thing, these category entry points, first thing to know about them is they exist, whether your brand exists or not, whether there was Salesforce or not, people would need to forecast next year’s sales in some way. And they would just find some other solution and more cumbersome solution prior to the existence of CRM, right? So like, let’s take Uber everyone’s like Uber totally revolutionising company transformed transportation forever. The category entry points for Uber, like, hey, I need to get from A to B, that was a category entry point in like, 1776. Right. So the category entry points are really pretty stable in time in a category, it’s just that there’s new solutions to them. I think if you’re in a new category, it’s still about linking your brand to those category entry points. And I think we have this mental model in marketing that we put buyers in market. In other words, if we have really good, compelling, creative, we can force somebody to like, stop what they’re doing, click on the ad, and go buy our CRM solution. And most people laugh when I say that, because they know intuitively that’s not how marketing works. But actually, we very much measure marketing on how well it does that. The reality is like, you don’t put people in market, the universe puts people in market. There’s a great quote from Erwin Efron on this where he’s like, “The cereal ad didn’t get married to buy cereal, the empty cereal box did.” you’re kind of more just lying, and wait, constantly saying, hey, whenever you’re in this situation, think of Salesforce. And then through factors mostly out of your control, eventually, somebody will hit that situation, and you’ll make sure you’re the brand that comes to mind. So I think even in new categories, there are old category entry points. And fundamentally, it’s about understanding that the marketer doesn’t move the customer in market, the customer moves themselves in market. 

Drew: I’d love to go deeper on that one. But we have so much ground to cover in one of the things that you talk a lot about, and I think there’s even a formula, creative times media equals outcomes. So let’s talk about creative and its impact. And I know that there’s kind of a lack of creativity and B2B in general. And I’d say at least there’s a lack of distinctiveness, you turn the sound off then you didn’t see the last frame, you would think, oh, that’s 10 different brands. It could be any one of brands right? So talk a little bit about creativity, and why it’s more important than ever.  

Peter: Yeah, let’s go back to this. It’s about being mentally available. What does that mean? It means it’s about being remembered in a future buying situation. So everyone in marketing thinks they have a lead gen problem and that their job is lead gen, but actually, their job is mostly memory generation, making sure you build this memory of the brand that is retrieved in the future when somebody encounters one of those category entry points. The key metric is memorability. So how do you drive memorability? Well, of course, there’s a media component because you need to actually reach a customer, you don’t reach a customer, nothing else can possibly happen. So reach is like a gating factor on marketing effectiveness. But then how effective your reaches and how well it converts into sales is almost entirely a function of how good your creative is, how memorable is your creative How likely is it that somebody will remember having seen the ad, remember the brand in the ad and remember it in some cases six months or six years from now. So you need really good, memorable, creative, and probably won’t come as a surprise to many of you that like B2B marketers don’t really have that. This is probably the least popular research I’ve ever done in my life. We took something like 2000 B2B ads, and we tested them for creative effectiveness and memorability. We tested them on a one to five scale. So five stars very good, memorable creative. One-star super forgettable, boring, creative. In B2B, something like 80% of ads scored one star, which means they’re just completely forgettable creative. There is an absolute crisis of creativity in B2B, there’s a bunch of factors, there is what you mentioned, distinctiveness, which is everyone’s ads look exactly the same. They’re all blue, it’s all digital transformation, they look the same. They’re saying the same things. It’s always like people in suits shaking hands, or that weird side-by-thing where the  guy has his hand here. And there’s all this stock imagery, stock generic branding. And that means it’s not going to cut through because it’s just boring looks like everything else. And it’s not going to get attributed to the brand, it’ll probably just get attributed to whoever the biggest player is in the space. Sometimes you’re accidentally marketing for competitors, essentially. So the fundamental problem in B2B is that our creative is super boring. It’s all about product features and benefits. It’s always like 11%, better ROI. And if you don’t need CRM, right now, that’s just not an interesting or useful message. It goes in one ear out the other. And that’s really the problem we have we have a crisis of memorable, creative in B2B. 

Drew: You use the term weird and that weird can work. I love the term and thinking about it a lot. I’m trying to find a weird B2B brand. And you know, there’s moments in time, particularly during their startup phase, where they feel weird a little bit, and then they lose it. They get another round of funding, and then everything gets homogenized. Are there any weird B2B brands out there? 

Peter: Yeah, you gotta be weird. I mean, in life and in marketing, there’s a great concept, I think it’s called the Von Restorff effect. But it’s basically like humans notice incongruous things. If I show you a picture of bit the black sheep, and then there’s one red sheep, you notice the red shape, you notice things that don’t blend in, but actually stand out. It’s easy to extend the metaphor into advertising, where you see 50 B2B tech ads, and you want to be the one that doesn’t look like the 49 other ads, which requires you to be what I would call weird or what Ehrenberg Bass would call distinctive, uniquely like yourself and not anyone else. So that is kind of the key concept. brands that do it well, in B2B, I mean, there’s very few. Salesforce is one we talk about a lot. It’s actually the journey you mentioned, Drew where like, at first Salesforce branding was really weird when the company launched, then they got into the enterprise, and it became like soulless and boring. And then there’s really been a revitalization at Salesforce over the past five years where we look at their advertising. It’s like talking woodland creatures there’s this guy Astro, a little kid in a raccoon costume. And marketers are always like, what are they doing? That’s insane. It’s so crazy and weird. It’s has nothing to do with CRM. And I’m like, is car insurance an interesting category? No. What are the biggest brands in car insurance? Geico. How does GEICO sell car insurance? They sell it with a talking British Gecko right so it’s like things don’t need to make sense to work. In fact, the more nonsensical often the better they work. So Salesforce, I think does as well. MailChimp is a company I’ve been spending a little more time with. I think they do it very well. They’ve got Absurdism their creative is just super weird like bat-human creatures. And again, I know many of you are probably saying I could never do that. But like, to me that’s the opportunity because nobody else is doing it. It’s a foundation for true distinctiveness and cut-through and memorability.

Drew: I would imagine the CMOs saying, okay, I want to go spend 50% on brand building doing some kind of weird creative, and I would love to sell that in. But it can’t. I also listened to one of your other presentations and you talked about big bets and putting a lot of money against one big idea. So is there any way in your mind? And have you seen this where B2B brand did a side test where they actually tested some weird stuff in some way so that they could make the business case? Look, this was four times more effective both at the top of the funnel and at capturing the tension. Is there anything that suggests that this is testable? So they could at least not have to bet the ranch on it?

Peter: Yeah, absolutely. I think it’s all testable in a variety of ways. You could run one super boring ad and one less boring, weird ad. Again, weird is the spectrum. So you don’t have to go full weird, but you’d be mildly weird. You could run weird and boring. And you could measure for instance, like ad recall: what percentage of people when you survey them afterwards, remember having seen the creative and I think you’ll find that people are much more likely to remember the weird incongruous thing than the thing that looked like every other thing. A lot of my most sophisticated clients, they test everything through market holdouts, so they’ll literally just say like, in Estonia, we’re going to run top of top-of-funnel brand with weird emotional, creative and bottom-of-funnel lead gen marketing. In Tasmania, we’re going to do no brand straight lead gen. And then we’re just going to compare what happens in those markets in a quarter in a year, ideally in multiple years. That’s why these are empirical concepts they replicate like you pretty consistently get the result that the market with the brand support performs better than the one without; the weird ads are generally more memorable than the boring ads, these things prove out. 

Drew: Love that I was thinking exactly the same thing for international companies, they could definitely use countries that were willing to do it in the risk is probably more than manageable. And the results could be dramatic. You change your mix, your messaging mix, you change your spending mix. And yet you could sort of isolate the variables there. So one of the things that this Cicero reminds me of P&G is always on right that you really talk about this in B2B, not just B2C: Where spending every week is taking your budget, dividing it in 52 is better than creating spikes going on, going off. Can you just sort of defend that thesis?

Peter: Yeah, I can. It’s really funny. Like we spend a lot of time with the Ehrenberg Bass Institute. This is like the Holy Grail of marketing. One time I asked Professor Byron Sharp, I’m like you have so many contrarian recommendations, which one makes the biggest impact when a customer implements it? And without question, he’s like when I get customers to spend their media more evenly over time than in bursts, which is weird because they think of creative as an arbitrage opportunity. They think less about media as an arbitrage opportunity. But I’ll keep going back to this 95/5 rule, most people are not in market, at some point they will be in the market. The problem is it’s very hard to know when someone is going to enter the market. And as a result, you just need to be always on spaced out over time, pacing and spacing. So that likely they go in market as close as possible to having seen that reminder of the brand. People talk about reach and frequency we think more about reach and recency. In other words, how recently did they see the creative from when they actually went into the market? And that’s where like spacing works very well. Most clients, they spend all of their money in, let’s say, December, and then you’re like, “Hey, why did you do that?” And they’re like, “Well, if I didn’t spend my budget in December, I was gonna lose it in January.” So like their media planning, in other words, is mostly dictated by like internal political considerations, not how I would do it, which is I would say, look at your sales per year. If they’re pretty evenly distributed across the year, then your media needs to be pretty evenly distributed across the air because it means people are constantly entering the market every month. If you have a highly seasonal business, like I used to work on Miracle-Gro, which by the way, was a very bad fit for me as a Manhattan, New York City native, talking about the gardening category, but they spent most of their money in spring because guess what, that’s when most people enter the market for planting and Miracle-Gro. So generally, if your sales are evenly distributed, your media should be evenly distributed instead of this big burst spending and then going dark. I’ll come back to finance, you talk to a financial advisor, first thing they’ll tell you, don’t try to time the market. Don’t try to buy and sell stocks at a very particular moment, focus on time in market. In other words, how consistently are you invested. And if you’re consistently invested over time, the performance goes up into the right. Marketers, I think with all due respect, are grossly overconfident that they can time the market and time the customer and hit them at that exact moment, or right before that moment when they go in market, we’d be better off focusing on time in market and saying how consistently are we in market with this very consistent messaging so that you get those compounding annual returns,

Drew: We’re going to have a highly distinctive, consistent message with as much reach as we can afford because you argue that reach correlates to share in some ways or another right? And certainly, if you have a higher share of voice and you have a higher share of mind, in theory, you’re going to have a higher share market. And there’s some data in one of those studies that connects an increase in share voice with an increase in share of market, right? It’s not as direct as it is for B to C. But it’s still a pretty good correlation.

Peter: Yeah, it’s actually a little better in B2B. So this is called ESOV efficiency. In more technical terms, it’s kind of like advertising elasticity. But it’s basically how much sales do you get for a set amount of reach, reach is the most important metric to gauge your marketing effectiveness. Because as I said, if you don’t reach anyone can’t possibly influence them. Everything is predicated on reach. And so basically, what you have in the Binet and Field literature is this idea that for every 10 points of extra share of voice, so that’s share a voice in excess of your market share. So if you have 10 points of market share, 20 points share of voice, that’d be 10 points, you get about point 7% market share growth per year for that amount of reach, and creative is what would bend the curve. So if you have really good creative, maybe you get 1% market share, if you’re really bad creative, maybe you get point 2% market share. And B2C, the average is actually like point six versus point seven. So you could argue, like B2B is actually more responsive to reach and advertising than B2C. And you do see huge variance across categories: for retail, it’s point two, for durables, it’s point nine. So different categories respond differently to reach. But there is a correlation. And it’s one of those rare things: a marketing metric, share of voice, that is directly correlated to a financial metric with growth. And that I think, is really the power of reach-based budgeting or thinking about ESOV as a key performance indicator.  

Drew: I do want to go back to one thing, first of all, for folks who are looking for examples of breakthrough and memorable creative, we’re going to try to find more, it’s really hard. There’s just a lot of folks that are spending on demand. And so it’s on capture and not creation. And when you’re spending money on capture, it tends to be more rational, it tends to be less creative. Now, it one point in the sales process, you do talk about the need to be more rational, there is a point where, okay, you can leave the silliness aside that someone is looking for some information. Can you talk about that distinction?  

Peter: Yeah, definitely. I mean, okay, you don’t need CRM. Now suddenly, you need CRM. If you go talk to Salesforce, when you’re in market for CRM, and they come in with the talking woodland creatures, you’d be like, Yeah, okay, no, but like, I’m really interested in like the pricing model, can you show me some proof that this thing will help me forecast sales more accurately. So once you are in market, there is a bit more rational consideration that takes place. And that’s where I think there is a market for more product features, specific messaging, but I just would stress first of all, most of the processing is not rational, it’s unconscious or psychological versus logical. And then also, you can only rationalize the brands you already know exists and thought of. So the research is pretty clear that like, when you go in market, you usually think of about two brands. And like 80, or 90% of the time you choose one of those two brands. So what may make the difference for those two brands is how good is their rational sales pitch and product marketing and sales process, it may make a difference there. But where the real drop off is for most brands is they’re not one of those two brands, your number one focus should be qualifying for that race. And then you need to worry about like running the race faster than your competitors. And again, some of that rational messaging can help there but it shouldn’t take the emphasis off being a brand that people can even rationalize because they know it exists, which is what the combo funnel type marketing delivers

Drew: So, think about the five to 95% ratio. A lot of this is based on the fact that you expect 5% of your prospect pool will be in the market for your product service in the next 90 days. That may be high for some categories.

Peter: Very high. 95/5 is a heuristic, it’s just to say that the reason I feel comfortable calling it a law is because I don’t think you can find any category in which most people are looking to buy that category like right now at this moment. In any given category, most people are not currently in market, that’ll be where the percentage is skewed. But 95/5 is general, you brought up cars, people buy cars on average, every 10 years, which means 10% is up for grabs in a year. And then you divide that by four to know how many are in market for a quarter, how often do people buy new business banking services, that’s like every three years on average. So we just came out with research on financial services. And it’s more like 16%, of, for example, SMB customers buy a financial service in a given quarter. So it’s not 95/5, it’s 16/84. But the rule still holds, which is that most of your customers are not in market. And you’re mostly influencing future buyers, not the end market buyer. But it’s important to your pointer to know what that is for your category. Because that’s how you set proper expectations with the business, the CFO, and the CRO need to understand that the amount of leads you bring in and a quarter is dependent or conditional upon how many people are buying the category that quarter. And because that’s a small number, like there really is a ceiling of how much sales you could possibly drive in a short term, most of the sales will be distributed across future quarters. And I think that’s a key concept marketers need to understand. And then they need to explain that to their cross-functional stakeholders. 

Drew: And there’s so much I guess, these days online behavior that would indicate there in the market. And if you actually did the math on that, you’d probably see it for yourself lots of companies, they’ve got their 1000 or 5000, or 10,000 companies that they want to do business with. But if they looked at actually the folks that are going to Trust Radius or G2 to to look at that, or people that are going to read analysts reports or some of those other things that are early signs of buying, you might find what that number is for your category.

Peter: Yeah, and listen, it’s big enough that you should care about it. Like I’m not saying you should just ignore anyone who’s in market and only talk to future buyers. It’s just you need to understand a relatively small opportunity, it’s not really where you’re gonna make your money, your money will be built, getting ahead of that moment, pre-suasion, you could call it versus persuasion.

Drew: Let’s just talk and we’re gonna wrap up very quickly. But do you talk about brand as a value as an asset? And is that something that you measure? I mean, I know there are other organizations that do brand asset valuation kind of things. Is that a factor in any of this?

Peter: Yeah, I think it absolutely is. Brand is an asset, it lives on the balance sheet. For many years, clients would be like, “What do you mean by brand? What is brand building?” and I would give these long incoherent answers. And now I’m like, “Okay, if you’re Coca-Cola, what is your brand, your brand is your distinctive assets. It is the name Coca-Cola, it’s the red and white color, it’s the scripted font, it’s the polar bear – like that is what your brand is, it’s just a series of assets, in many cases, visual assets, that you put on things so that people know who they belong to. That’s the original definition of a brand, right? It’s like you put it on a cow so people know the cow belongs to… The value of those assets is dependent on how many people know about them, and how many different situations they are linked to. So Coca-Cola is a very valuable brand, because it has so many assets. And those assets are known by pretty much everyone. And they are constantly linking themselves to more and more situations in which you should buy Coke. And then they also have incredible physical availability or distribution so that if you want a Coke, it’s never more than within arm’s reach, as Coca-Cola famously says. So if you look at research, you know, most firms, their valuation is based on intangible assets. And then you’re like, “Ha, what’s an intangible asset?” You click on the balance sheet. It’s literally like trademarks. It’s your logo, your name, those things have value – intangible value, but value nonetheless – that lives on your balance sheet that will be realized if let’s say your company is bought. And your goal as a marketer, I think, is to build up those brand assets and increase the value of the assets by doing all of the things we’re talking about. And that can be measured – it really can – you just show people let’s say your logo with your name removed, and you ask them, “What percentage of you recognize this logo?” And if you’re GEICO 100% of people say “I recognize the Geico.” Then you ask “Cool, who does the Geico belong to?” 100% of them say “Geico.” They don’t say Progressive. They don’t say State Farm. So that’s an asset. That’s incredibly valuable because it’s 100% fame, 100% unique recognition, 100% attribution. And if you’re a good marketer, you’re growing the valuation of those assets over time. So that’s kind of how I would think about it.  

Drew: I want to sum up with a statement that you said – the definition for the purpose of a brand is to help customers make fast and easy decisions. I think that’s such a profound and simple way to be thinking about this. Because if you can help your customers make fast and easy decisions, you win, whether they’re in the market or not in the market later on. There’s so much in the various research that I look forward for Huddlers, for sharing all this with you.  

Let’s wrap out Peter with two do’s and one don’t for B2B CMOs, when it comes to sort of getting more out of their marketing in the context of everything we just talked about.

Peter: Do invest in top of funnel not just bottom of funnel, invest in distinctive, consistent creative that you run year after year to as many buyers as you can possibly reach. So top of funnel, consistent creative, broad reach among category buyers.  What you should not do is the exact opposite, which is what most marketers do in B2B, which is all bottom of funnel, it’s all real-time changing creative based on product features. And it’s all hyper-targeted to the CEO at the pharmaceutical company in Minneapolis with 10,000 employees. Right? So it is literally the inverse of that. And that I think is the big opportunity in B2B.  

Drew: By the way, as you think about it, the chances are every one of your competitors is not doing that. They’re spending 95% of their dollars on the 5% of the folks that are in the market right now.  

Peter: Yes, 100%, and it’s a competitive advantage, which I think is hard to come by – super important.  

Drew: All right, from your lips to the CEO and CFO’s purse, we will do this! Okay, well, Peter Weinberg, thank you so much for joining us. Where can Huddlers find you?

Peter: Yeah, thanks so much for having me – hugely appreciate it! You know, LinkedIn is my platform of choice, I post a steady stream of obnoxious contrarian opinions there. So would love to connect with you there. And you can always send me a message if you want to talk about any of the concepts or how we could work together on them, but really hugely appreciate the invitation.  

Drew: Our pleasure, and thank you. If you’re a B2B CMO, and you want to hear more conversations like this one, find out if you qualify to join our community of sharing, caring, and daring CMOs at cmohuddles.com.

Show Credits
Renegade Marketers Unite is written and directed by Drew Neisser. Hey, that’s me! This show is produced by Melissa Caffrey, Laura Parkyn, and our B2B podcast partners Share Your Genius. The music is by the amazing Burns Twins and the intro Voice Over is Linda Cornelius. To find the transcripts of all episodes, suggest future guests, or learn more about B2B branding, CMO Huddles, or my CMO coaching service, check out renegade.com. I’m your host, Drew Neisser. And until next time, keep those Renegade thinking caps on and strong!