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Mike Lieberman, CEO and Chief Revenue ScientistThu, Dec 14, 2017 12 min read

Branding Vs. Direct Response? Which Marketing Strategy Is Right?

Forget All Of The Labels, From Inbound To Demand Generation And ABM

Marketing StrategyI’d love it if we could simplify marketing, sales and revenue generation by removing all of the labels arbitrarily placed on types of marketing (mostly by software companies). When you wash out all of the labels, you end up with two types of marketing: The type designed to get your name out there or build your brand, and the type designed to encourage prospects to take action or respond.

That’s it. Your marketing is either branding or direct response. Which one you need (or a mix of both) is going to be purely based on your company’s position in the market, the industry you compete in and your company’s life cycle. Let me try and illustrate. Branding works great for Coke. They’re in a highly competitive industry, they’ve been around since 1886, everyone knows them and their product is well established. Branding is the right kind of marketing for them. There is no buyer journey when it comes to whether you are aware of, considering or purchasing a Coke.

However, now let’s consider the new software company we’re working with. On the surface, it might make some sense for them to run a branding campaign too. I mean, getting their name out there would certainly help them, right? No, not really, and here’s why.

Knowing About A Company Is Not Going To Pay The Bills

When you look at the companies doing branding, they’re almost all big, established name brands with a long history of revenue. They’re not expecting their marketing to generate revenue. They’re trying to keep their name out there to protect market share against equally big and established brands.

A lot of smaller, less-established companies look at the marketing that big brands are doing and try to emulate their strategy. Thats probably not a great idea. Instead, all of your marketing has to pay off in the form of leads, high-quality leads, sales opportunities and eventually new customers.

You want to focus on direct response. Every marketing tactic you execute should have response as its goal. You publish a new whitepaper, people have to download it. You publish a new website, it has to attract, engage and convert visitors into leads. You run a new lead nurture campaign, it has to turn leads into sales opportunities. No discussion, just results.

The Buyer Journey Requires Attract, Connect, Engage And Nurture — Not Branding

Understand the Buyer JourneyPeople buy much differently today than they did 20 years ago. We’ve all been taught the reach and frequency model in college, and that’s how marketing used to work. Tell as many people as possible as many times as possible about your product, and hopefully when they need it, they’ll remember you. Again, there’s that crazy word — hope. No good.

Today, people are on buying journeys. Salespeople use to manage the typical sales funnel. Today, buyers manage that sales funnel. They start in awareness and need to be attracted to your company. Then they need to be connected to your company, usually through some offer or content that helps them along in their journey. Then they have to engage, be interested and helped by your messages, stories, content and offers.

In some cases, buyer journeys are not linear but more like a series of small cycles. Because of this, nurturing these people is critical. The longer they don’t hear from you, the more likely they’ll be engaged and connected with your competition. You need to be working hard to educate them all throughout their buyer journey, and this almost always means providing a wide variety of content delivered in context to their journey stage, role, industry and specific challenge they’re facing.

Where branding delivers that high-level air cover, direct response delivers the more surgical strikes that produce more measurable results.

New Companies With New Solutions Need Direct Response

As we mentioned, everyone knows Nike, Coke and Budweiser. Branding campaigns work for these companies. But does anyone know Decisiv, Suplari, ComplyGlobal, Sustrana or any of the companies that work with us? No!

Branding-related tactics for companies like this are misaligned with the goals these companies set, like leads, revenue and new clients. If we simply get their name out there with branding campaigns, like banner ads, print campaigns, mailings and even trade shows, these activities will not produce the same results as account-based marketing, lead nurturing, search engine optimization, paid social campaigns, paid search and email marketing.

Understanding the differences and setting the proper balance with both budget and tactical execution is the key to driving the results you need to grow your company.

B2C Vs. B2B

I don’t think there’s a correlation between B2C and branding, even though most of my examples were business-to-consumer examples. You could easily find branding campaigns for Cisco, Accenture and IBM, just to name a few.

The big difference is always going to be the buyer journey. Typically, B2B companies have longer, more complex sales cycles that give you more opportunities to attract, connect, engage and nurture the people making those purchase decisions. In some B2B cases, the sales cycle could be 12 months or longer.

In most B2C companies, the buyer journey and the sales cycle are much shorter. Even if Im buying a new case for my iPhone, there is a buyer journey, it’s just much shorter (maybe a couple of days before I purchase my new case). Everything you would do for a more complex B2B sale can be done here too, it just has to be condensed. The buyer behavior is going to be the same. An emotional connection comes first. In this situation, I find a case that I love. Then I rationalize the purchase decision, looking at shipping costs, delivery date and whether I trust the e-commerce site.

So again, it’s probably not perfectly appropriate for branding and more than likely it’s a better fit for direct response, further supporting the point around branding or direct response being a company and strategy decision, not necessarily based on size or type of sale.

Branding Budgets Vs. Direct Response Budgets

setting marketing budgetsThis might be one of the biggest challenges for companies looking to do more branding. This requires a much bigger budget. Now you’re buying impression-based advertising and competing in a market set by companies willing to put big bucks toward their branding.

If you’re running a banner ad campaign on a site that also carries ads from big brands, then you’re competing with those companies that are willing to pay big dollars for those impressions. The same holds true on AdWords campaigns. If you’re trying to run an AdWords campaign and competing against companies putting big dollars into branding, then those keywords are going to be expensive.

As a practical example, the current cost-per-click for the term inbound marketing is around $27. That’s being bid up by companies with many more marketing dollars than we have. Competing for that keyword on AdWords is going to be a challenge. Budgets to support branding are almost always going to be richer than budgets that support direct response. Furthermore, its going to be harder to justify ROI from branding campaigns than it is from direct response campaigns. Keep that in mind as you start thinking about which approach is right for your company or your blend of branding vs. direct response marketing.

Its not that branding is bad and direct response is good. That’s like saying vanilla ice cream is bad and chocolate ice cream is good. All ice cream is great, and all marketing is great. It’s all about your preferences and the educated selection of your approach based on the inputs and strategy for your business. Some companies might need branding, while companies might need direct response. In other cases, companies may need a combination of both.

If you are going to lean into direct response, then you’ll need to make other decisions around your strategy to direct response. For instance, how aggressive do you want to be on the interruptive nature of your marketing? How reliant on a pure inbound marketing strategy do you want to be? The big decision is how reactive vs. how proactive in terms of outreach do you want to be? Do you want to wait to be found on a search engine, social site or related website, or do you want to go out to your prospects with a disruptive and compelling story? Or are both directions in your plan for 2018?

These decisions impact a lot of areas, including budget, tactical planning, staffing, agency direction and more. Having these discussions and making solid, data-driven decisions helps ensure you’ll get results from your efforts.

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Mike Lieberman, CEO and Chief Revenue Scientist

Mike is the CEO and Chief Revenue Scientist at Square 2. He is passionate about helping people turn their ordinary businesses into businesses people talk about. For more than 25 years, Mike has been working hand-in-hand with CEOs and marketing and sales executives to help them create strategic revenue growth plans, compelling marketing strategies and remarkable sales processes that shorten the sales cycle and increase close rates.