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Building B2B Brands In a Connected World
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00:00Now, you may have noticed in a change to our regular scheduling, we were meant to have Dean Aragon, who's
00:05CEO of Shell Brands, here joining us today.
00:08Unfortunately, he couldn't make it and he sends his apologies.
00:11So, big shoes to fill, Jan, but I think we'll get there, won't we?
00:15So, Jan, tell us a little bit about the B2B Institute and what it is you actually do and why
00:20you're an expert in this area.
00:21Sure. So, there is a big need in the marketing industry to really acknowledge the importance of B2B marketing.
00:31And about four or five years ago, we did some research on behalf of LinkedIn, who is funding us, on
00:37who is out there that is creating intellectual property, new mental models, new ideas about how to make B2B marketing
00:48more successful and impactful.
00:49Because more than half of the world's economy consists of B2B companies, and yet they're always sort of the second
00:58or the third class citizen when it comes to the overall marketing conversation.
01:02Well...
01:02And to our great shock, we realized that there really isn't or there wasn't anyone out there studying this topic
01:10with the right level of intellectual rigor and with the right kind of long-term perspective.
01:15And we started a think tank, and LinkedIn was kind enough to bankroll this experiment, but it's grown quite significantly
01:25where we now have a team of 20 people around the world.
01:27We work with some of the leading academics in the space, and we really try to figure out how do
01:33we make B2B marketing and B2B decision-making, B2B buying, more of a value growth driver for the economy, for
01:43the businesses in those spaces.
01:45And clearly, LinkedIn's mission of creating economic opportunity for every member of the global workforce fits in extremely well for
01:56that.
01:57So we're wholly owned by LinkedIn, and we're very excited how far B2B has come in the past few years,
02:03because it's now a topic on people's agendas in conferences such as this one.
02:07And when you were setting up the B2B Institute, why was it that B2B in marketing was always the bridesmaid,
02:14never the bride?
02:15Because in other areas of business, having that, you know, the business and academic and economic rigor is seen as
02:22a good thing.
02:23So why is B2B often overlooked when it comes to things like awards and industry coverage and so on?
02:28I think it's a bit of a vicious cycle that was happening where the function of the B2B marketing unit
02:38within a company was seen as very tactical and very much around our sales force is the thing that creates
02:48all the value.
02:49And the B2B marketing team is just there to be a sales support function for salespeople, make them some brochures,
02:57build them a microsite.
02:58Generate leads.
02:59Post an event and then process the leads.
03:02So that's all good and well.
03:05I'm not saying you don't need that, but it's incredibly short-sighted.
03:09It's incredibly unwise to frame the value creation potential of B2B marketing.
03:15Because marketing is a strategic entrepreneurial function of any business.
03:22There's really only two things that make money for a business that create value.
03:26And that is, number one, R&D.
03:29You invent something.
03:30You come up with a new product.
03:32And number two, marketing.
03:34You find a way for the world to want this and to buy it.
03:37Those are the two core entrepreneurial functions.
03:39And businesses need to try and take that seriously and heed that advice and actually empower B2B marketers to be
03:50able to create outsized economic value, to fund them accordingly, to staff them accordingly, and to give them a remit.
03:57That goes beyond, we measure you based on how many leads you generate.
04:01And every quarter, we're going to reassess budgets because that's all that we need to know.
04:08This takes years.
04:09It takes years to build great brands.
04:12So I guess a time like this really tests those values and how seriously a business takes its marketing function.
04:19Because you've got, as everyone has been talking about this week, but it bears repeating, we're in an environment where
04:26people are bracing themselves for an advertising, not just an advertising downturn, an economic downturn.
04:31There's a conflation of macroeconomic factors ranging from Russia's invasion of Ukraine, inflation, through to cost of living crises, and
04:41so on and so on, supply chain shortages.
04:43So what's a B2B marketer to do at a moment like this, where obviously the first reaction, knee-jerk reaction
04:52of some businesses, is to cut our subscriptions, to cut any vendors we can, just to try and retain cash?
04:59Yeah, I would say the first thing when you study crisis management and leading through a crisis, the first very
05:08basic principle is that you cannot control the crisis, but you can control how you respond to the crisis.
05:17And once you realize that you and all your competitors are facing the exact same problems, if you find a
05:25way to respond differently, you can actually turn this very unfortunate situation to your own advantage.
05:33Because winning in business is about finding your own unfair advantage, and there is no generic strategy, there's no generic
05:44strategy that you can use to win.
05:47You can't copy your competitor's strategy and try and do the same thing, almost by definition, unless you get very
05:53lucky by complete coincidence, you're actually going to lose.
05:57It's going to hurt you. You need to find your own strategy, your own set of choices that uniquely apply
06:03to you.
06:04And I would urge a lot of the marketers who have strong enough relationships with the CEO and the CFO
06:11to actually go on the offensive and use all the widely available data that says big companies who spend through
06:20recessions end up getting bigger.
06:22You can win an economic cycle. You can win significant market share if your CEO, if your CFO are with
06:30you on this journey and they understand that it's a long-term investment.
06:35However, it means that you have to be pretty close friends with your CFO and your CEO.
06:42And many, many marketers that I talk to, I'm not going to name any names, but marketers I talk to,
06:49they get rather nervous when they have to go in and meet the CFO and tell her, here's our plan.
06:57We want to go on the offense. We want to win share in this cycle because they don't have the
07:03right language.
07:05It's a real sort of marketers are from Venus, CFOs are from Mars or vice versa kind of situation where
07:11you just don't speak the same language.
07:13Things like brand love, engagement.
07:17If I'm a CFO, I'm just allergic to that kind of language because you want to know what is our
07:24pricing power?
07:24What is our margin? How do we actually build a cost advantage?
07:31How do we build increased willingness to pay?
07:35How do we generate future cash flows?
07:37You need to be able to speak that language because it's actually all connected.
07:41It's all the same. It's different sides of the same coin.
07:45But I think marketers don't have enough grounding, enough training on how to speak in that way.
07:51And that's what we want to teach, help them understand and work with some of the leading academics to teach
07:57them that.
07:58So let's go into that a bit deeper then.
08:00So say you're a marketer and you have 15 minutes with the CFO who you don't get along with to
08:07persuade them not to cut your budget in half this year.
08:10What are the key metrics that you would focus on and in what order in order to persuade them that
08:17your function deserves to keep its budget where it is or to grow?
08:21I would ask a series of rhetorical questions that actually picks up where the audience is rather than where you
08:30want them to go.
08:31You have to pick people up where they are.
08:33It sounds like a negotiation tactic.
08:35And then you say, are you sure that we can raise our prices along with inflation?
08:47Are you worried about inflation right now?
08:49And of course, any CFO worth her or his salt will say, yes, I'm very worried about inflation.
08:57Because what inflation does to you is it shrinks your margin without you being able to do anything about it.
09:03And that you have to actually run faster just to keep up.
09:06You have to increase your prices just to keep your margins the same.
09:10So if I'm a CFO, that's something that really worries me, right?
09:14And then I would get into, well, what is the source of our ability or our inability to charge more?
09:23Oh, it has to do with are people willing to pay more for our product?
09:29Or are they going to say, well, at this price, I would have bought it.
09:32But if it's now a little bit more expensive, I might just not buy it or I might go to
09:36a generic alternative.
09:38Well, that is literally the concept of brand equity.
09:43Brand equity is the difference between your ability to sell something versus a commoditized generic product that does the same
09:54thing that you are selling.
09:55So all of a sudden with that little journey, you've landed with the CFO at a point where marketing and
10:04finance speak are starting to converge.
10:07Because you've established a brand equity is actually a thing that a CFO should care about.
10:13But how do you say that in a way that they would care about it?
10:15Because as soon as you mention a word like brand, you might see a CFO's eyes blaze over.
10:20So how do you say that in a way that makes sense to their balance sheet, to their forecasting, in
10:25a way that, yeah, they won't just shut the door on your face?
10:27I think you have to scare them a little bit.
10:29I think you have to say, this company is going to get commoditized.
10:34This company is going to lose pricing power unless we find a way to increase willingness to pay amongst our
10:43customers.
10:43And by the way, related to that, willingness to sell.
10:48How convinced are we that our own people are excited to work here, work extra hard to sell our stuff?
10:55How convinced are we that our suppliers, our investors are willing to give us the benefit of the doubt?
11:01Their willingness to help us sell is high because you know what?
11:05We have a strong brand.
11:06We have a strong reputation.
11:08We make a promise that is credible and we deliver on that promise.
11:14And we do that often enough that people start developing habits where they have the first thing that comes to
11:23mind,
11:23the mental availability of our brand, of our company is much, much higher than our competitors.
11:29I think you need to keep cycle back through financial concepts, but then land it somewhere that has to do
11:36with brand.
11:38And the other thing I would offer for those who struggle, because I've seen that in conversations with clients.
11:45The moment you say brand, it's very polarizing.
11:49The moment you say brand in any room at a business meeting, there's going to be a certain percentage of
11:55people who they live for brand.
11:58They love brand.
11:59They want to, all they do all day long is want to talk brand.
12:02And then there's other people, for example, finance people and sales people who just the moment you say brand,
12:10they have an allergic reaction to it as if it's something that doesn't concern them, doesn't really help them.
12:16It's this frivolous indulgence that the brand marketing out there somewhere is wasting money on.
12:21It has nothing to do with the real work, which is selling stuff, right?
12:26Which is, of course, doesn't make much sense when you really look at it,
12:30because no salesperson would go work at a company that has a very weak brand,
12:35because that salesperson would not make their commission and would have to work much, much harder to sell anything.
12:42So even salespeople believe in brand.
12:45And CFOs go out and spend billions of dollars or euros buying a company.
12:50And then the Wall Street analysts say, why did you buy this company?
12:53And they say, well, it has an amazing brand, and it's worth so much more.
12:57So CFOs are willing to pay billions.
12:59Then they put it on the balance sheet.
13:00That's right.
13:00We put it on the balance sheet.
13:01It's an asset, right?
13:02So you have to, I think, call out that.
13:05It's just a logical inconsistency.
13:07And I've stumbled upon a mental model that I think is helpful.
13:13And it's basically a mindset shift, because most companies, especially in B2B,
13:19they have this mindset of our product is really great.
13:23We win because of our product.
13:26And salespeople say, we're really good at selling stuff, so we win because we're good at selling.
13:32The finance people say, we win because we really watch our margin and our cost structure
13:38and our financial monitoring and engineering is very strong, and so on and so forth.
13:45So it's a little bit like an exam question, where everyone gets to frame the exam question
13:50in a way where their team is the most important team that makes the difference.
13:55And the brand team is especially guilty of that, because they think it's all about brand
14:00and everything else is less important.
14:03And that's not helpful, because that's not how you win people over.
14:05So here, how about this as an idea?
14:08How about instead of product or brand or margin or price, we say, or purpose?
14:16We haven't talked about purpose yet.
14:17It's another interesting topic.
14:19But instead of all of that, we say, what is the promise that we are making to our customer?
14:29And how do we make that promise as credible as possible?
14:34And how do we then deliver on that promise so that we can build this virtuous cycle of
14:43if someone makes me a promise that's compelling, I buy it, it actually does what it promised me
14:49and more, I feel very reassured.
14:53I feel like this is a habit that I could develop.
14:56And before I know it, I buy that brand without ever having to think about it,
15:01because it just comes to mind naturally.
15:04And that is called a brand.
15:06That is called brand equity.
15:07But promise making, I think, is really, really powerful,
15:11because everyone can understand it.
15:14And it's not a trick question.
15:16And it's not about what you think.
15:19It's about what does the customer actually value?
15:24And how are you promising it to them?
15:27And then how do you deliver that?
15:28Let's just quickly get to the execution part.
15:31So a lot of that we were focusing on internal and making a case for marketing.
15:37If Dean was here, he would be talking a lot about humanizing brands,
15:41and particularly B2B brands, finding the human, the B2B to see.
15:47Do you think that's important in B2B marketing?
15:50Is that something you think about a lot?
15:53I do, but it's a thing that comes up a lot.
15:57And I can never help myself to make a slightly cynical remark saying,
16:03okay, who is not marketing to humans?
16:07Is anyone out there marketing to horses or elephants or computers?
16:12No.
16:13All marketing is marketing to humans.
16:17B2B marketing has always been about marketing to humans.
16:21But I think what people often fail to see is that rational arguments about how great your product is
16:28and how many features and functionalities it has and how scientifically advanced it is,
16:35that's a lot less important than people realize.
16:37The thing about humans is we don't like to think very hard about stuff,
16:43and we don't like to make decisions when we don't have to make a decision.
16:48And when we have to make a decision, we are worried about the downside of that decision.
16:54If I buy this computer solution, software solution, am I going to get fired?
16:59Is my boss going to be angry?
17:02Do I have to work super hard to then bail myself out from this mistake I've made?
17:07I want to avoid as many of those decisions.
17:10So as a marketer, if you want to speak to humans, you have to really understand people don't like risk,
17:16and so you have to de-risk stuff as much as possible.
17:20And people make decisions based on memory structure.
17:25So you have to optimize for how can you be memorable, how can you be distinctive.
17:31It's more important to be distinctive than differentiated, I would argue, which is a controversial topic.
17:37It's important to be differentiated, but actually distinctiveness,
17:40the brand that is bought is the brand that's remembered.
17:44And you can be remembered for having a cute cartoon character or for being the orange thing
17:51that people remember the color of or a stupid jingle or what have you.
17:57Like you can be as silly as you like.
17:59As long as you remembered, you will win.
18:02And I think B2B marketers are very, they almost feel like it's cheating to do stuff like that
18:09because they're serious and they sell serious technologies.
18:12But all the research says that's not how humans work.
18:17Humans are driven by memory structures.
18:19Most of our decisions are subconscious.
18:23And the more we can build things that develop habits,
18:27the easier it will be to be the brand that's thought of.
18:31And that's the brand that wins.
18:32Fantastic.
18:33Well, that was a whistle-stop tour of the B2B marketing landscape.
18:38Jan Schwartz, thank you ever so much.
18:40Thank you, Laura.
18:42Thank you very much.
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