When it comes to B2B marketing, many companies I come across are focused on the bottom of the sales funnel, prioritising sales activation messages such as “register for a product tour webinar”, “download our datasheet”, or “request a demo,” in their marketing campaigns. This often leads to unrealistic expectations about the number of Marketing Qualified Leads (MQL) that should be achieved, not only on a monthly basis, but sometimes in response to a single marketing email or social media post.
This narrow focus detracts from developing a long-term brand strategy, which is vital to building business value over time. But with monthly revenue targets to hit, it’s easy to see why businesses fall into this trap and lean hard on lead generation campaigns. When we look at our audiences more closely, however, we can see how this short-term tactic is not going to pay off – either today or in the long run.
How big is your ‘ready to buy’ market?
Research by the Ehrenberg-Bass Institute for Marketing Science, published in the B2B Institute’s LinkedIn B2B 2030 Trends Report, estimates that “at any given time, only 5% to 10% of customers are in-market in a given category.” That’s the percentage of customers actively looking to buy your product or service now.
To really appreciate this measure, let’s look at an example. Say your LinkedIn Company Page has 5,000 followers, and of those, you estimate 65% are in your target market. (The remaining 35% is made up of your colleagues, investors, competitors, and other non-customer stakeholders.) Of these 3,250, you can expect between 163 and 325 of your followers are in-market today.
Does this mean that if you were to post a sales activation message this afternoon, up to 325 in-market prospects would see it? No. Not everyone is on LinkedIn everyday. To estimate this, we also need to consider LinkedIn’s daily active user (DAU) rate, which is 16.2% in the US. Applying this DAU rate, we can assume between 26 and 53 of those in-market followers will check their LinkedIn accounts today.
But that doesn’t necessarily mean they will all see your post. This depends on a number of other factors, including how the user has curated their feed, how long they spend looking at it, and whether your content is served to them. You can apply the same calculations to your marketing database and swap the DAU rate with the average open rate on your email campaigns to estimate how many in-market prospects will see your lead generation emails.
When you break it down like this, and your ‘ready to buy’ audience gets smaller and smaller, it’s easy to see why lead generation should not be the sole focus of your marketing strategy.
Talking to ‘out-of-market’ customers
Now that we have an idea of the number of in-market customers we are talking to on any given day, it’s time to consider the remaining 90-95%. We don’t know when any one of these customers will move from out-of-market to in-market. It could be days, weeks, months or years. But we do know that as soon as they move into ‘ready to buy’ mode, we want to be at the top of their consideration list for purchase. And this is where brand marketing comes into play. This kind of marketing is based on distinctive, easy to recall, and repetitive messaging. It comprises your logo, tagline, visual design, messaging and tone of voice.
In B2B, brand marketing often takes the form of content marketing such as blog posts, videos, and white papers offering information that is valuable to your target audience, helping them do their job faster or more efficiently, for example. It can include PR bylines published in industry magazines that provide an expert view on a newsworthy topic, told from your brand’s perspective. It helps you establish credibility and build trust with your target customers in order to be considered when they are ready to buy.
What’s the right mix of sales activation and brand marketing?
How much time and budget you invest in sales activation and brand content depends on your short, medium, and long term business objectives. You will likely find you need to adjust the balance at different times, particularly if there are specific buying cycle timelines in your industry. As a general rule, half of your marketing budget and effort should be focused on building your brand. This is backed up by B2B Institute research reported in Marketing Week that found “B2B brands that invest at least 50% of their budget in long-term brand building deliver the best financial returns in terms of market share growth, profitability and revenue.”
So while it can be easy to get caught up in the day-to-day and filling the sales pipeline for the month, remember for every lead generation campaign, only a fraction of your target market is ready to buy today. By investing equally in your brand marketing strategy, you will sustain the growth of your business for the months, quarters and years to come.