How does brand awareness in a B2B niche lead to growth?
Over the years, there have been many B2B marketing studies that changed the industry’s thinking. You’ll be familiar with their headline results but often keen to know more – and to review the original source. This series of articles provides an overview of the research and how they apply for B2B marketers targeting a niche. Not just great, SEO-friendly evergreen content, this is part of our commitment to help marketers in our sectors craft B2B marketing that they are proud of.
Headline finding:
LinkedIn study shows brand building will lead to growth for B2B brands if it leads to recall and, ideally, preference in what is described as mental availability.
Brand awareness drives growth by tackling the concept of mental availability (recall and preference at the time of need) and physical availability (the quality of your product in use or service when experienced particularly its effectiveness at solving their needs). A study by LinkedIn explains more about what makes a powerful growth strategy.
Source: How B2B Brands Grow – LinkedIn study
The concept of Mental Availability has been around since 2010 when Professor Bryon Sharp published his book ‘How Brands Grow’. His research showed that market growth is led by two things: mental availability and physical availability. These can be more simply described as making your brand ‘easy to mind’ and ‘easy to find’ for your potential audience. Whilst initially developed for the B2C marketplace, subsequent research by the Ehrenberg-Bass Institute has shown that these concepts also hold true for B2B brands.
Investing in advertising to influence both what and when people think of your brand will drive growth. It could even be that advertising is almost more important in B2B markets, as it builds memory structures in the minds of your current and potential customers when it could be years between purchases, rather than days or weeks.
Investing in building this mental availability and growing your brand value will drive market advantage for your business. But is that it? No. There are further nuances for B2B niche marketers in particular who also have to balance other requirements to really drive growth.
Making brand awareness a key marketing objective
In a niche B2B market, it could be reasoned that brand awareness activity isn’t needed because there are a limited number of suppliers and a small number of potential customers. The LinkedIn study found that only 16% of B2B marketers listed brand building as a key marketing objective.
But niche marketers must remember that, due to the length of time between purchases, it is even more essential for your brand to be front of mind or ‘easy to mind’ across the whole category – including customers and non-customers. Fundamentally, growth will be driven by customers purchasing your product. But there is nothing you can do to stimulate that growth, as it is driven by a business need.
This is why successful B2B companies recognise the need for brand awareness as a KPI and invest marketing budgets into that area, not just sales activation. Ultimately, this is the starting point for your sales funnel, and if you don’t invest and use your brand-building activity here then there will be fewer potential customers in an already finite audience.
Following more customer-centric thinking
Sitting alongside the recognition of brand awareness as a KPI and leading from the need to be ‘easy to mind’ means B2B niche marketers need to recognise that their customers are human, too. Their minds work in the same ways, so your brand awareness activity needs to build those memory structures and positive brand associations, using emotional messaging just the same way as B2C marketers do.
Thinking in a more customer-centric way will help with this, and ensuring your brand is prevalent and relevant to your entire marketplace will help achieve this. This means reaching the whole category whilst using clear and strong branding to increase the chances of when your brand will be thought of by your potential customers. It is worth niche marketers considering if there are other category entry points and potentially tapping into slightly different and/or less obvious ones than you may initially think of. Often a quick competitor review can throw up some new ideas here and enable you to be relevant to a potentially new audience.
Meeting the needs of a whole category – even a niche – can be challenging though, and overcoming brand rejection can be a concern. However, research by Professor Jenni Romaniuk into the B2B marketplace showed that brand rejection is not usually the reason companies don’t grow; it’s actually a lack of brand awareness that hinders growth more.
Brand rejection in the B2B world is typically around 7-11% depending on category, compared to 3-9% in B2C. Yet often, as B2B marketers, we are tempted to focus on overcoming reasons for rejection. This could be a weak tactic as studies have shown growth to be led by companies who acquire new customers, so building brand awareness will drive more growth than focusing on the small percentage of brand rejectors.
At this point, it is also worth differentiating brand rejection with rejection because you are difficult or below expectations. These traits are what Professor Sharp called the physical availability of your product or service – or the customer experience of purchasing and using your product. People talk – particularly in a niche sector, and word of mouth is powerful. If your product is below standard, the purchase process is difficult, or your sales team are pushy, then this is going to counteract the investment in mental availability, so it’s vital to get the physical availability right, too.
Learning from your competitors
As well as your customers talking to each other, as a niche marketer, you should be looking and learning from others — namely, your competitors. If you are to achieve growth in sales, then research has shown that this will be driven by acquiring more customers.
This is intensified in a niche market as you will have fierce competition for a small – and finite – audience. Research by Professor Jenni Romaniuk into the Duplication of Purchase law shows that in B2B as well as B2C, the majority of your new customers will move from the biggest brands in your market, not the smaller ones.
Niche marketers need to really understand the marketplace, the messaging and category entry points of your competitors – and compete with them, because it is more likely that your current customers will move to another big brand rather than a smaller one. That’s not to say ignore the small or challenger brands, but your growth will be driven by movement between the big brands in your niche.
Understanding who is doing what, what customers are saying about who, and what innovations are happening will be crucial to helping your business grow.
Ultimately, it is important to recognise that, in a B2B niche, the whole category of buyers is your audience. Your marketing budgets need to recognise that investing in brand communications to build mental availability is a key KPI and will put your brand front of mind when a new customer enters the market for your product. This can be done by using emotional messaging and thinking about new category entry points that might tap into new markets within your niche.
It is vital that you understand your niche and your competitors to ensure that you are reaching your whole audience and therefore, ultimately, unlocking the most amount of growth potential that you can. Don’t be shy of following, understanding, and responding to moves in the market by your competitors in order to drive market growth.
Planning B2B Marketing that is effective is not easy. We work with technology, industrial and professional services companies on exactly this. Every day. Learn more about how we do this with our B2B services here.
