This article originates from a presentation at the Revenue Marketing Summit in London, 2022. Catch up on this presentation, and others, using our OnDemand service. For more exclusive content, visit your membership dashboard.
Hello! I'm Katherine Lamb, Global Head of B2B Marketing Strategy at HSBC. At HSBC, our focus is on marketing business banking services, catering to small businesses as well as large corporations.
In this article, we’re going to look at:
- Branding and performance marketing for revenue growth
- The power of data and linking branding to revenue growth
- Implementing branding and performance marketing strategies
- Measuring the impact of branding on financial metrics
- How NPS connects customer advocacy to revenue growth
- Bridging the gap between branding, performance marketing, and sales
- Demonstrating the value of brand-building
Branding and performance marketing for revenue growth
Let's start with the basics, with the role of brand and performance marketing within the context of the marketing funnel. This will help you effectively communicate the importance of branding to your finance director or any other stakeholders.
The marketing funnel illustrates the customer journey, and it comprises different stages.
At the top of the funnel, we have the brand. Its purpose is to reach the entire market, encompassing both existing and potential customers. Essentially, brand messaging should resonate with anyone who may consider purchasing your product or service.
Therefore, at this stage, the messaging is broad and high-level. The goal is to establish a strong memory structure so that when customers are ready to make a purchase, your brand is at the forefront of their minds.
On the other hand, performance marketing or demand generation, situated lower down in the funnel, is tightly linked to sales. This type of marketing is highly targeted and data-driven, often operating within digital channels.
It provides specific calls to action (CTAs) and aims for efficient conversion. As a result, there is an abundance of data available at the bottom of the funnel, which makes it easier to measure and prove its impact.
This focus on the bottom of the funnel has gained popularity because of its measurability. However, we mustn't overlook the vital role of branding in expanding the market size. Branding helps you reach a much broader audience, thereby broadening the overall market for your products or services.
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While performance marketing targets customers who are actively searching and ready to buy, it does not contribute to growing the market. By solely concentrating on the bottom of the funnel, you limit yourself to a small pool of potential customers, all while competing with your rivals for their attention.
It's the power of branding that opens up the market and creates a larger market share and more extensive opportunities for your business.
Understanding this interplay between brand and performance marketing is crucial for driving revenue. It allows you to adopt a holistic approach and leverage both aspects effectively.
By combining broad brand strategies with targeted performance marketing tactics, you can maximize your reach and capitalize on the full potential of the market.
The power of data: Linking branding to revenue growth
So aside from theory, what about concrete data? If you want to convince your finance director, board, or anyone else, the good news is that there’s plenty of data available on this topic. One notable study is "The Long and the Short of It", by Binet and Field.
They analyzed marketing data across various sectors over many years and successfully established a connection between short-term sales activation (represented by the fluctuating orange line) and long-term sales growth driven by brand development.
It's essential to remember that building a brand is a long-term investment that yields growth over time. By consistently investing in brand building, you steadily increase the size of the overall market and the potential customer base you can convert.
On the other hand, sales activation or demand generation efforts, coupled with effective conversion through sales teams, may experience spikes during campaign periods. However, they do not contribute to expanding the market size or the overall opportunity. Branding is what truly opens up the market and creates a larger market share and overall opportunity for growth.
Brand building and performance marketing go hand in hand. One is not more important than the other. However, if you neglect brand building, the size of the market you can convert will remain limited.
Bennett and Field conducted their research across multiple sectors and found that the ratio of investment between brand building and demand generation varies depending on the sector's purchase cycle length.
Consider the food industry, for instance. We all buy food regularly, with frequent purchase cycles. When you visit a supermarket, you are reminded of food brands each time, so the need for brand recall is relatively lower. In this case, the proportion of investment needed for brand building is not as high.
However, let's take holidays as another example. People typically purchase holidays once or maybe twice a year if they are fortunate.
With longer intervals between purchases, holiday brands must establish strong memory structures to ensure their companies come to mind quickly when customers consider booking a holiday. Therefore, more investment should be allocated to brand building in this sector.
But there are even longer purchase cycles, such as cars. Most individuals only buy a car every three to five years, and in the business banking world, companies may change their bank accounts once every five years or even longer.
This means that the majority of the market is out of the active purchasing phase most of the time. In my field of business banking, for example, around 80% of the market is out of the purchasing phase throughout the year, while only 20% is actively looking to change banks.
This highlights why solely focusing on the bottom of the funnel will never lead to significant market share growth. With a limited portion of the market actively seeking to purchase at any given time, broader brand strategies become essential for expanding market share.
It's important to note that these statistics and proportions may vary depending on the sector and purchase cycle duration specific to your industry. However, there is an abundance of data available to support these insights.
When attempting to convince senior management about the value of brand building and its role in driving growth and revenue, start by emphasizing the importance of long-term investment versus short-term gains. By highlighting the long-term benefits and the impact of brand development on market size, you can effectively make your case for strategic brand-building initiatives.
Bringing concepts to life: Implementing branding and performance marketing strategies
Now let's delve into the practical implementation of these concepts with a couple of examples of how we apply them at HSBC within our commercial bank on the B2B side.
Above, you'll see some examples of our brand-building campaigns, which we refer to as priming. These campaigns focus on top-of-the-funnel messaging without the intention of immediate conversion. Instead, their purpose is to remind the audience of strategic themes strongly associated with our brand.
For us, these themes revolve around internationality, sustainability, and the ability to create opportunities. Take a look at the copy, for instance. We pose an intriguing question: "How can your entire business go green, without your bottom line seeing red?"
It's designed to stimulate your thinking and leave an impression. Notice the clear visual identity with our hex symbol in the middle. These campaigns aim to deliver a message that resonates and sparks curiosity without immediate conversion.
We employ a similar approach in our group brands, such as at airports. If you've passed through Heathrow and walked down a jet bridge, you may have encountered this type of campaign. Here, we ask open questions that often touch upon emotional subjects. Again, the goal is to trigger your thoughts and provide mental stimulation.
On the bottom, you'll find a more classic demand generation campaign for a specific product called Business Go. The visual connection to the overall brand is evident with the presence of the hex identifier.
We continue to use open questions to intrigue you, but they are now more specific to the product and its capabilities. Additionally, there’s a clear CTA that we hope will guide you towards taking the desired action. This is a classic demand-generation campaign that aims to generate conversions.
Beyond visual consistency, we also link these campaigns through metrics and performance measurement. When it comes to the priming or brand-building campaigns, we focus on metrics such as share of voice. We want to be known for our internationality and commitment to sustainability.
On social media, we track the number of times we discuss these themes compared to our competitors, as well as the level of engagement and sentiment of those discussions. This provides us with a broader understanding of our share of voice. It's important to note that share of voice is not the sole metric, but it is one of the ways we assess our brand-building efforts.
We observe the influence of share of voice as it fluctuates and its impact on direct campaigns. As our share of voice grows and becomes stronger over time through consistent brand building, it becomes easier to convert customers in our demand generation campaigns. We also notice this reflected in metrics such as cost per acquisition.
Operating across 50+ markets, our brand may be stronger in some regions like the UK and Hong Kong while less established in others. In markets where our brand is less prominent, such as the US or even China, our demand generation campaigns have to work harder, leading to higher costs per acquisition.
Proving the value: Measuring the impact of branding on financial metrics
Now, let's look at how to effectively prove the value of branding to your board. It's important to consistently emphasize that brand building is a long-term investment that yields returns over time. Its role is to establish the foundation for the conversion efforts of your sales teams and performance marketing initiatives.
Performance marketing aims to be highly efficient in converting leads and passing them on to the sales team. While the short-term focus of performance marketing is distinct, it is essential to highlight the need for a cohesive long-term and short-term strategy when educating your board.
To support these arguments, let's examine some data that reflects our experience at HSBC. In one particular market, we measured the return on investment (ROI) across our different business banking segments.
On the right-hand side of the image, you'll see the ROI for brand and performance marketing with small businesses. Given the shorter purchase cycles in this segment, particularly in digital-only interactions, the ROI for performance marketing is higher than that of brand building.
Performance marketing plays a crucial role in driving results within shorter purchase cycles. However, there is still a measurable payback from brand-building efforts across other target audiences.
Moving to the middle market, which includes larger companies with more complex needs, the sales cycle becomes longer.
Then, large corporates, such as major brands like Coca-Cola, with highly sophisticated needs and an extensive decision-making process. In these cases, the ROI for brand building is significant, even overshadowing the performance marketing element.
For audiences with longer sales cycles, brand becomes paramount as trust and other factors play a crucial role. Trust, in particular, is a foundation that can only be built through brand efforts, not performance marketing. Consequently, the overall ROI across all segments shows a stronger performance for brand building.
Gathering this data is not an easy task. It requires a long-term investment in tracking and analyzing data across multiple channels. The most robust approach is to incorporate econometrics, which considers total market spend for both your competitors and your own company.
Econometrics examines the impact of sales, marketing, and even the potential impact of doing nothing. It's a sophisticated approach that requires investment, but it offers comprehensive insights into the return on brand as well as overall marketing ROI.
If you don't have access to long-term data or the resources for econometrics, there are still other ways to demonstrate the value of branding. You can start by measuring the extent to which your brand creates mental availability, or the ability to be the first brand that comes to mind when people think of your industry.
This can be done by incorporating key questions into surveys focused on customer experience or participating in syndicated surveys conducted by research providers in your sector. Simple questions like "Which brand comes to mind when you think of an international bank?" can provide valuable data when collected over time.
Another effective approach is examining the relationship between brand strength and cost per acquisition. If you operate in multiple markets or target different audience segments, assess the brand's strength in each of those markets or segments. Measure how cost per acquisition varies in relation to brand strength.
In all likelihood, you'll observe lower costs per acquisition in markets or segments where your brand is strong. As your brand continues to strengthen, you should see a gradual decrease in cost per acquisition, indicating greater efficiency. This approach provides a direct link between brand strength and tangible financial outcomes.
By employing these strategies, you can provide compelling evidence to your board regarding the value of brand building and its impact on financial metrics. Remember to present the data consistently and utilize various measurement approaches to capture the comprehensive value of your branding efforts.
How NPS connects customer advocacy to revenue growth
Another valuable avenue to explore when demonstrating the impact of branding is Net Promoter Score (NPS), which is closely tied to customer experience and the sentiments of your existing customers.
In our data, we have observed a clear pattern: our customers who are promoters, those who are highly satisfied with our service, often mention our brand as a reason for recommending us.
Surprisingly, over a third of our promoters across our customer base specifically mention brand-related attributes when asked why they recommend us. They highlight our international presence, sustainability efforts, breadth of expertise, and other brand-related aspects.
Understanding that brand plays a significant role in driving customer advocacy is essential. Promoters not only demonstrate higher satisfaction but also tend to purchase more products and generate greater profitability. This connection directly ties brand efforts to revenue growth and increased profitability.
Moreover, this pattern holds true across different audience segments and markets. Even though the specific reasons mentioned may vary based on the characteristics of each market, they all revolve around brand-related factors.
By highlighting the impact of brand on NPS and customer advocacy, you can emphasize the direct link between branding and revenue generation. This further supports the argument for investing in brand-building initiatives and leveraging the power of your brand to drive customer loyalty, repeat business, and ultimately, financial success.
Breaking silos for marketing success: Bridging the gap between branding, performance marketing, and sales
One common concern that often arises is the perceived disconnect between different teams responsible for performance marketing, brand building, and sales. However, it's crucial to establish a connection and facilitate collaboration among these teams to achieve better outcomes.
At the core of this collaboration is the need for shared key performance indicators (KPIs) and metrics that align the efforts of all teams involved.
Metrics like cost per acquisition can help connect brand-building efforts to the overall market share increase, which in turn should align with the targets set by the sales team. By establishing these shared metrics, teams can work together towards a common goal rather than focusing solely on their individual responsibilities.
At HSBC, we have implemented a system where different teams may have distinct roles but share the same infrastructure and KPI framework. For instance, the global team takes on the responsibility of brand building and priming, while also overseeing the martech infrastructure and digital channels.
This allows for a unified approach to data utilization and ensures consistent definitions, such as the definition of a marketing qualified lead (MQL), across different markets.
Furthermore, the global team provides toolkits and guidance to local markets, enabling them to execute demand generation and performance marketing efforts effectively. These toolkits ensure that all teams start from the same foundation and maintain a level of consistency in their market approach.
By fostering collaboration, establishing shared metrics, and leveraging shared infrastructure and toolkits, organizations can bridge the gaps between different teams and create a more cohesive and effective marketing strategy.
The alignment of efforts and the utilization of shared resources help maintain consistency while optimizing the collective impact of brand building, performance marketing, and sales initiatives.
By promoting collaboration and providing a shared framework, organizations can overcome challenges associated with the separation of roles and maximize the collective potential of all teams involved in driving revenue growth and achieving marketing objectives.
Demonstrating the value of brand-building: Metrics, measurement, and long-term investments
To summarize, it's crucial to emphasize the long-term investment aspect of brand building when educating senior management and the board.
Highlight the significance of brand in expanding the market and growing the overall opportunity. To achieve this, it’s essential to dedicate the same level of rigor and focus to measuring brand as you do to demand generation.
While demand generation often provides more readily available data, it's important to implement strategies to measure and evaluate brand-related metrics.
Key metrics such as mental availability, cost per acquisition, and NPS can offer valuable insights into the effectiveness of your brand-building efforts. By actively tracking and analyzing these metrics, you can provide tangible evidence of the impact of brand on revenue growth and profitability.
If resources permit, consider implementing a comprehensive approach like econometrics over the long term.
This sophisticated method takes into account various factors, including total market spend, competitor analysis, and the impact of marketing and sales efforts, to provide a comprehensive understanding of the return on brand and overall marketing ROI.
When making recommendations regarding brand building, stress the importance of long-term investments in brand while highlighting the need for rigorous measurement and evaluation. Encourage a holistic approach to metrics, incorporating brand-related indicators alongside demand generation metrics.
By leveraging available data and exploring measurement options like NPS, cost per acquisition, and mental availability, you can demonstrate the impact of brand on revenue growth.
Additionally, if feasible, consider investing in long-term econometrics analysis to further solidify the connection between brand investments and business outcomes.
By following these recommendations, you can effectively convey the value of brand building and drive a strategic focus on brand as a critical driver of revenue and growth within your organization.
