Finding the right balance between brand and demand in B2B SaaS
B2B software companies struggle to hire a CMO who is a master of both brand and demand. As if marketing in 2023 wasn’t challenging enough, first-time CMOs who are skilled in one tactic are scrambling to learn and implement the other. Too often CMOs fit into one of the following boxes:
The Demand-Focused CMO
- Targets ready-to-buy leads at the bottom-of-the-funnel
- Focuses on driving immediate growth with ads, marketing, and web conversions
- “If I can’t track it, I won’t do it.”
The Brand-Focused CMO
- Attracts a wide pool of potential customers at the top-of-the-funnel
- Focuses on building long-term brand salience with thought leadership and market positioning activities
- “If we’re not investing in our brand, we’re missing out on the big picture.”
In reality, both brand and demand marketing are critical to success in B2B SaaS. Of course, there is product marketing, too, but we’ll leave that for another blog article.
If you don’t invest in your pipeline, you won’t be around long enough to focus on your brand. If you neglect your brand, you’ll get swept up in the SaaS sea of sameness. No one will know who you are, why you’re better, and why they NEED you. Without a solid brand, you’ll lose leads to the shiny new software next door.
Being the best CMO you can be requires investing in the right mix of both. Instead of pitting brand against demand, CMOs should embrace the art of Marketing Bothism.
“Marketing Bothism is the rare capacity to not only see the value of both sides of the marketing story, but actively consider and then co-opt them into any subsequent marketing endeavor in an appropriate mix.”
-Mark Ritson, Brand Consultant and Marketing Week Columnist
Brand marketing vs. demand marketing in B2B SaaS
Brand marketing is a long-term play that aims to attract, educate, and engage 95% of potential customers who don’t currently need your product/solution/service (but will someday).
Brand marketing is often challenging for new CMOs to justify to their CEO because the impact is difficult to tie to a metric, and the payoff can take years.
But it’s worth it.
Established, trusted brands offer hard-to-measure benefits like:
- The reputation to command premium prices
- The resilience to bounce back from product flaws that would prove fatal to lesser-known brands
- A community of brand champions who speak highly of your brand and make referrals
Whether scheduling a demo or getting a quote, demand marketing is about driving your key audience toward conversion. Demand marketing focuses on converting the 5% of your in-market customers who are actually ready to buy.
B2B teams who are battling the clock to hit their lead quota tend to lean heavily toward demand strategy because it’s easier to measure than brand marketing and (in theory) drives more immediate impact.
The Institute of Practitioners in Advertising (IPA) highlights that the effectiveness of demand marketing decreases rapidly over time, whereas investments in branding continue to deliver results.
Even more important to consider is that focusing on a small percentage of the lower funnel distracts you from reeling in the vast majority of your future customer base.
So, what is the right mix between brand and demand?
It’s a question that plagues most marketing teams.
Marketers face relentless pressure to deliver immediate impact, like improving pipeline velocity or closing key deals. Growth requires both short-term action and long-term determination. Although brand marketing is a greater upfront investment, its long-term impact extends beyond conversion metrics and sales.
While conversion is often the be-all-end-all metric for SaaS, without a strong brand strategy, the returns from demand gen will likely plateau over time. To increase selling power, you must regularly invest in brand optimization. Recent data recommends allocating around 60% of your marketing spend to the brand and 40% to demand to achieve the best marketing results.
Practically, what does this mean?
Start with tailoring your messaging to different stages of the buying process.
Use brand marketing to reach prospects who understand they have a problem but don’t know how to solve it. It plants the seeds of desire for out-of-market customers by introducing benefits that align with the audience’s future goals and aspirations.
Use demand marketing to reach a more solution-aware audience who is already in-market researching solutions. It aims to help prospects address their objections and quickly compare your features, pricing, and specs to their list of competitors.
Aligning brand and demand for the future of B2B SaaS
Marketing KPIs are often based on questionable performance drivers like “beating last year.” Executives give CMOs a short window to chase unrealistic performance metrics, and when they inevitably don’t meet them, they’re either fired or put under even more pressure to perform.
In fact, 75% of B2B marketers in 2022 ran campaigns for less than six months, and many tried to measure ROI in two weeks even though the average B2B sales cycle runs six months or longer.
Clearly, this is a problem.
CMOs can no longer afford to focus on one over the other. Brand creates demand. Demand fuels brand. The B2B marketers who embrace ‘the genius of the AND’ will come out on top.