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Deep Dive 28 Mar 2022 - 10 min read

Mental availability, brand rejection, Binet & Field, ESOV and Ehrenberg-Bass: New B2B data shows marketers should flip the funnel sideways for business growth, B2C strategy also on the hook

By Paul McIntyre & Brendan Coyne

Jon Lombardo, Prue Cox and Jenni Romaniuk unpack how B2B – and B2C – brands can and should be growing faster and how and why marketers can win over the CFO. Hint: It's not by making 'drab, dull' lead generation ads.

From flipping the marketing funnel sideways to scotching “delusions” that retention and loyalty trump acquisition – and a new performance-enhancing twist on Binet & Field’s 60:40 brand to performance rule (it should be 95:5 in B2B) – the science unpacked in How B2B Brands Grow also applies in large part to B2C marketing, says its Ehrenberg-Bass co-author, Jenni Romaniuk. Jon Lombardo, Global Research Lead at The B2B Institute hopes the science emboldens brands to stop making “drab and dull” performance ads and stop worrying about offending customers. The truth, he says, is few people care about brands at all: “It’s all upside. The job is always to build mental availability.” LinkedIn’s ANZ and SEA Enterprise boss Prue Cox says the likes of Westpac and DocuSign are nailing it. 

What you need to know:

  • A new white paper from The Ehrenberg-Bass Institute unpacks how mental and physical availability are critical to B2B brand growth and why lead gen strategies at the expense of brand building are destined to fail.
  • That is partially because of the 95-5 rule, which states only around 5 per cent of customers are in market at any one time. The remaining 95 per cent aren’t buying. So they need a tell, and a future memory, not a sell.
  • White paper also suggests brands are limiting themselves by making incorrect assumptions, one of which is that customers are thinking about their brands all the time and will reject them for making ‘bad’ or ‘risky’ ads.
  • Wrong, says B2B Institute Global Research Lead Jon Lombardo. To grow, brands need shrug off fear of ‘brand rejection’ and make powerful brand ads that people remember.
  • They must also ditch brand centricity for customer centricity – i.e. make more “category entry points” by being relevant to customers’ lives, not just push the brand at them. That includes internal customers, which Lombardo says must be the finance director before the sales chief.
  • If marketers can show brand building ensures future cashflow and revenue, a large component of stock market valuations, they win finance.
  • Ehrenberg-Bass Institute International Director, Professor Jenni Romaniuk, says the paper’s rules also largely apply to B2C brands.
  • But Romaniuk warns marketers to make sure the brand stories they tell create the right memories – and are not an end in themselves.
  • LinkedIn regional boss Prue Cox thinks brands like DocuSign and Westpac are nailing the distinction between brand awareness and mental availability locally – and are growing as a result.

A lot of advertising is geared to persuasion rather than building mental availability. Persuasion is about assuming you're in the room and you're arguing your point, whereas mental availability is about getting into the room. And so that's the big challenge: most organisations are failing to get into the room, but they're spending all their money on arguing as if they're already there.

Prof. Jenni Romaniuk, International Director, Ehrenberg-Bass Institute

Mental availability: Don’t assume you’re already in the room 

Mi3’s most read story of 2021 unpacked the critical role of mental availability in business metrics, as well as its impact on ESOV, or extra share of advertising voice. Now Ehrenberg-Bass Institute Professors Byron Sharp, Jenni Romaniuk and John Dawes, the people behind ‘mental availability’, have produced a paper with the The B2B Institute that should have far-reaching implications for marketing and advertising practice.

Mental availability remains a core tenet of How B2B Brands Grow, a white paper published more than a decade after the book that made Byron Sharp famous. Yet the concept is still seemingly confused with top of mind ‘brand awareness’ by marketers. Instead, mental availability is a measure of the breadth and depth of perceptions of a brand. So a buyer could be aware of a brand, but know nothing else about it – which equates to low mental availability, and therefore less chance of the buyer choosing that brand when the time comes to buy.

High mental availability is when that person has high awareness of the brand and knows what it does, and what it stands for. According to Ehrenberg-Bass, a higher level of mental availability makes people far more likely to buy.

Under that rule, smart advertising and broader marketing strategies should therefore prioritise the pursuit of high mental availability. Otherwise they are likely to be less effective in delivering growth. Failure to grasp the subtle difference between brand awareness and mental availability is why so many brands are struggling today, says Romaniuk.

“A lot of advertising is geared to persuasion rather than building mental availability. Persuasion is about assuming you're in the room and you're arguing your point, whereas mental availability is about getting into the room. And so that's the big challenge: most organisations are failing to get into the room, but they're spending all their money on arguing as if they're already there.”

More broadly, the principles unpacked in How B2B Brands Grow largely apply across both B2B and B2C, according to Romaniuk.

B2B decision makers have “a little bit more of a complex landscape” in terms of the stakeholders and drivers factored into their buying decisions, she acknowledges. “But when it comes to the fundamentals that underpin buying behaviours, there are vastly more similarities in marketing laws than there are differences. So much so that it is actually really challenging to think of any specific differences [between B2B and B2C] that would be worth changing your strategy for.”

Sales calls and advertising work better when there are existing memory structures in viewers’ heads – so long as the advertising works with these memory structures. Advertising falls on barren ground when it reaches buyers who aren’t near a firm’s sales points.

Professor Byron Sharp, Director, Ehrenberg-Bass Institute

Mental + physical availability = growth

Mental and physical availability models are central to How B2B Brands Grow. Byron Sharp explains these “market-based assets” succinctly. For the mental side he states: “Sales calls and advertising work better when there are existing memory structures in viewers’ heads – so long as the advertising works with these memory structures.” For the physical side – Sharp basically says the goods must be readily available: “Advertising falls on barren ground when it reaches buyers who aren’t near a firm’s sales points.”

The problem is, sales and brand marketing have historically been misaligned. Sales wants leads ASAP. That has driven short-termism and incentivised marketers to divert resource into channels and metrics that essentially cover their backs to show they are delivering leads, or any kind of proxy metrics. Yet the vast majority of their target market – especially within B2B – are out of market at any one time (see the 95-5 rule, here and below).

Which means brands that pursue lead generation above all else are undermining future revenue and cashflow. Which may ultimately prove terminal.

Sales and marketing: together at last?

Romaniuk hopes the study helps realign sales and marketing to better drive growth.

“For a long time, marketing and sales have been seen at odds with each other. My hope is that as B2B marketers, and hopefully the sales team, learn more about mental and physical availability, there'll be a greater understanding that these two things actually work together. And how marketing and sales work together for the benefit of the whole company, because that is the thing that mental and physical availability mental model does,” she says.

“It actually brings marketing and sales together. So as we start to learn, explain and share more of these findings, I'm hoping that gap will get bridged and it'll be less of a combative relationship for budget and more of a collaborative relationship to better use the budget.”

If we can partner with finance successfully, then we will be able to partner with sales. I believe finance can get sales to understand something that maybe sales wouldn't understand otherwise.

Jon Lombardo, Global Research Director, B2B Institute

Win over finance and sales will follow

Jon Lombardo, Global Lead at the B2B Institute, and Global Head of Research at LinkedIn, is “a little less optimistic”. He thinks marketers will get better results convincing finance departments first. Finance, he says, will then give sales the impetus to align.

“I think in the end, part of the problem is that sales wants to take credit for the sale and marketing wants to take credit for the sale.” If Romaniuk is right, and sales and marketing teams start to better comprehend mental and physical availability models, “they can share credit for the same thing, which would be a massive leap forward”, says Lombardo.

“But I'm not as sanguine about the alignment of sales and marketing as I am about marketing first going to finance. I think if we can partner with finance successfully, then we will be able to partner with sales,” adds Lombardo.

“I believe finance can get sales to understand something that maybe sales wouldn't understand otherwise.”

Australian brands nailing it

Westpac is a strong local example of a big consumer brand recognising that brand awareness does not equate to high mental availability, according to LinkedIn’s Prue Cox, especially when it comes to business customers. But she says the bank has successfully leveraged its ‘help’ brand platform to build mental availability with businesses through a small business hub, launched over Covid.

“It was a brand campaign very focused on business, looking at real life customers, starting to tell their stories about how they've been impacted through the pandemic and how they're actually looking to go forward from here,” says Cox. “It's very much specific to B2B and does not assume that just because Westpac is a very well known consumer brand, that [in itself] is going to have the same impact within a B2B buying decision.”

The 95-5 rule: Binet & Field on steroids

Cox also cites DocuSign as a local standout of both a brand-led approach to higher mental awareness, and a working proponent of the 95-5 rule – akin to Binet & Field’s 60:40 brand to performance ad spending ratios, but on steroids.

The rule, developed by Ehrenberg-Bass Professor John Dawes, is that only circa 5 per cent of B2B customers are in market to buy at any one time. The remaining 95 per cent are out of market.

Which would mean businesses pursuing high ratios of performance advertising at the expense of brand are almost certainly undermining future business earnings performance and future cashflows.

That is unlikely to be a strategy a finance director would knowingly sanction nor shareholders welcome.

Future cash flows are very important because most firms – and especially tech – the majority of their stock price is based on future cash flows, not current cash flows. So the idea of the 95-5 rule is powerful in two ways. One is it's a better focus on your external customer, but it's also a better way to talk to your internal customer – the CFO.

Jon Lombardo, Global Research Director, The B2B Institute

Why the marketing funnel needs flipping

Lombardo says the 95-5 rule effectively tips the marketing funnel on its side.

“The marketing funnel started as a sales funnel … But it’s not customer centric. I don’t think anybody would say ‘I’m at the top of the funnel’ or ‘I’m at the bottom of the funnel,” he says.

“Your customers either need your product or service and so they're in market – or they don't until later, so they're out of market. And how you run advertising to them will vary depending on whether they're in market or out market … I talk a lot about these mental models, but this, in my view, is a much more customer centric approach.”

Customer centric versus brand centric; target CFO, not sales

There is also another benefit for marketers in adopting a more customer-centric 95-5 rule, reckons Lombardo: Winning the internal customer, i.e. finance.

“The 95-5 rule in some ways also represents how companies are valued. So you get your current cash flows from the 5 per cent that are in market and are going to buy today. The other job is to prime buyers who represent future cash flows, the people who won't buy until some future date,” says Lombardo.

“Future cash flows are very important because most firms – and especially tech – the majority of their stock price is based on future cash flows. It's not based on current cash flows,” he adds.

“So the idea of the 95-5 rule is powerful in two ways. One is it's a better focus on your external customer, but it's also a better way to talk to your internal customer.

“You need to go into the CFO and say we are doing this because it is going to make us come to mind in more buying situations. We'll generate more of those sales and so we're going to have a durable stream of future cash flow; it's about producing cash mitigating risk.”

Take back performance budget

Lombardo urges all marketers to be “much more quantitative, much more financial” in how they talk, especially about brand advertising in order to land their message with the internal customer, the CFO. He thinks the 95-5 rule enables them to crack it.

“This is fundamentally one of the big issues in our industry: only the lead gen marketers who can tie every click to a dollar have been getting budgets and so everything's getting more and more short term.

“The 95-5 rule gives you a way to talk about the buyer being in market, out market – and then linking that marketing activity to cash flows, which is a financial activity,” he says.

“Then when you can talk to the CFO, you can argue for bigger budgets to do things like brand advertising and brand management. So that is something we push a lot.”

Which is why Lombardo says the marketing has to pick its primary internal customer – and sales departments are not that target.

“There's too much emphasis on the alignment of sales and marketing,” he says. “There's not enough emphasis on the alignment of marketing and finance.”

“For the last 12-18 months, tech brands have been so focused on ABM. It became the buzz of what everyone wanted to do … targeting and closing customers who are already in market. That is why that 95-5 concept – in-market and out-market – is really interesting. Because it starts to look like if you're just doing ABM, you're pretty much only talking to that 5 per cent.

Prue Cox, ANZ and SEA Enterprise Lead, LinkedIn

Getting into the room: Why DocuSign wins

Hence LinkedIn’s Prue Cox rating the ‘Next Time, DocuSign’ campaign highly on telling a brand story via Jules Lund’s printing nightmare that attempts to encode memory for those out of market while priming those that are in-market.

Cox commends the brand for bucking the tech trend for ‘account-based marketing’, or ABM, which she describes as “a form of hyper-targeting”, and instead going broader with localised creative – something global enterprise B2B brands have historically struggled with.

“For the last 12-18 months, all tech brands have been so focused on ABM. It became the buzz of what everyone wanted to do … really targeting and closing customers who are already in market or part [of the way along] that sales journey already,” says Cox.

“That is why that 95-5 concept – in-market and out-market – is really interesting. Because it starts to actually look like if you're just doing ABM, you're pretty much only talking to that 5 per cent that are in market.”

Such a narrow approach, says Cox, risks failing to heed Romaniuk’s warning to brands falsely assuming they are “already in the room” and just have to persuade people to buy their wares, instead of making sure they get into the room in the first place via brand building.

“I think the way DocuSign has used an Australian business influencer like Jules Lund speaking about the times he went wrong with a paper contract has a greater connection,” says Cox. “It is brand campaign that talks to a broader audience, not just those who are focused on the product or are in-market at the moment.”

Cox said the early results of the DocuSign campaign over LinkedIn’s network suggest it is delivering at both ends.

“We saw that members who have been exposed to the brand campaign had significant increases in engagement when also exposed to the lower funnel campaigns as well,” says Cox. “That is something [DocuSign] has focused on for a long period of time, the ability to concurrently run their brand and lower funnel activity.”

I worry sometimes that we tell a life story, but no one remembers what we want them to remember. Advertising is not a destination, it's a vehicle for changing memories. So you have to be very careful about what are the memories you’re bringing to the forefront for people.

Prof. Jenni Romaniuk, International Director, Ehrenberg-Bass Institute

Don’t let the tale wag the dog

While storytelling is a critical component of brand building, and something DocuSign appears to have done to good effect, Romaniuk warns marketers not to let the story run away with their objectives.

“I worry sometimes that we tell a life story, but no one remembers what we want them to remember. Advertising is not a destination, it's a vehicle for changing memories. So you have to be very careful about what are the memories you’re bringing to the forefront for people and refreshing or building, and make sure that they're actually in line with things that are going to be useful.”

She has seen numerous B2C and B2B campaigns that have overlooked those fundamentals, and are therefore wasting money.

“So that's the caveat. I'm all for storytelling. I think it's an important part of how we process and learn information. Just remember that you want to make sure that the brand is there and the message is actually something that has a life outside of the ad in terms of usefulness,” says Romaniuk.

“There's a lot of evidence that there is value in engaging emotions when processing advertising. But we also have to remember what's left behind as well and think about how useful this is; and are we getting the right message embedded in people's brains? Are we changing the right memories?”

Global brands nailing it

The B2B Institute's Jon Lombardo says the best brands have already recognised that most of their customers are out of market at any given time, versus those that “obsess over lead generation, acting like everybody is in the market at all times”.

“They run these ads that say ‘buy now’ or ‘register now’, but if you're not in market for that product or service, you're just going to ignore that ad.”

Instead, he says the smarter brand operators don’t try and rush what cannot be rushed – and that applies in many longer-burn B2C categories as much as B2B.

The approach taken by those brands is: “I'm just going to make them aware of my product, aware of the category that we're in, aware of the services we offer, and it's going to be done in some more creative, engaging way,” Lombardo suggests.

“That is what Salesforce does with Astro, or what CompareTheMarket does with Meerkats, or in the US what Geico does with Gecko. It's just saying, ‘Hey, we sell car insurance – at some point in the future, when you are thinking about buying car insurance, when you have that need, then ultimately you should think of us, shortlist us and potentially buy from us’.”

Brand rejection: Stop worrying, bin boring ads, embrace the upside

Across both B2B and B2C, brands are often so scared of offending customers that they make bland, boring ads that don’t work.

But the reality is far removed. Most people hardly ever think about brands, even less about their ads.

“The problem is never that people are thinking of your brand too much, that is never the problem you have,” says Lombardo. “The problem you have is that you are insignificant about your buyers. They don’t think about you at all.

“So the idea that you’re running some ad and it being so incredibly offensive to people that they’re never going to buy your brand again? It’s possible that can happen, it is just extraordinarily rare.

Today, I think people, especially communications departments at firms, treat it like it’s very common. It is exceedingly rare. So you shouldn’t worry about the downside. The job is always to worry about the upside – and you see that in the [report] data.”

According to data compiled for the How B2B Brands Grow white paper, brand rejection stands at about 10 per cent across banking and insurance, and is not usually related to advertising. Per a survey of 1,200 B2B buyers in the US and UK, “even the most well-known B2B brands in the category had more potential customers unaware of the brand than actively rejecting it,” the paper states.

Lombardo points out that if even the largest brands suffer from too little mental availability, smaller brands are in worse shape.

“Small firms are small firms because nobody knows they exist and nobody buys from them. So brand rejection, I think, is just fun. Because a lot of what we're saying is worry about the upside, try to get more reach, try to get better messages, and try to do better branding that will build mental availability,” says Lombardo.

“There is no downside, so worry about the upside: The job is always to build mental availability.”

Mental year ahead, fate amenable to change

Ramming home the mental availability message to brands, says Lombardo, is the B2B Institute’s key challenge for the next 12 months.

“The thing we’re most focused on is bringing category entry points to our clients. We have to encourage our clients to think a lot less about the product, and a lot less about the brand – and a lot more about the customer or the buyer.”

“Ultimately, the more creative, well branded advertising we will be able to run, the better brands will be able to build. So I want to move us, with the help of Jenni and the rest of the folks at Ehrenberg-Bass, away from the very drab and dull lead generation advertising that doesn't, frankly, really work very much.

“I want to move us more towards the stuff that we know works, which is, creative and well-branded ads that stay in your memory for a long time and influence future purchases.”

A fundamental that applies as much to B2C as B2B – and if widely adopted, may just save advertising from its current trajectory.

See the white paper How B2B Brands Grow here.

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