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Nine Brand Building Lessons for Marketing in Web3

Blockchains and the tokenization of assets allow marketers to unlock new forms of community development and value exchange with consumers. In this article, we outline how marketers will need to re-evaluate brand building in Web3 based on nine observations. To do this, we’re drawing perspectives from the recent launch of Moonbirds, a non-fungible token (NFT) developed by PROOF Holdings.

While many likely don’t know Moonbirds as a brand, we’re using it as a case because we admire the brand-building mechanics this project is demonstrating within new Web3 possibilities. Moonbirds is an Ethereum-based collection of 10,000 unique Profile Pictures (PFPs). Each token doubles as membership of sorts, granting owners access to an exclusive Discord (a server where owners chat and hang out) along with unique in-real-life (IRL) events and digital membership benefits. The brand mirrors and further builds on proven tactics leveraged by NFTs like Bored Ape Yacht Club (BAYC) from Yuga Labs.

For context, Moonbirds launched on April 16, 2022, raising $66 Million in a matter of hours. In just 48 hours from its launch, it became the top traded NFT by volume, created more than $210 million in additional secondary sales and had a floor price of $62,000 (the cheapest bird available for purchase). Additionally, Moonbirds is already pushing into popular culture. Celebrities like Jimmy Fallon have even changed their verified NFT profile pictures on Twitter.

Though it’s the early days of brand building in Web3 with Budweiser, Taco Bell, Campbell’s, Adidas, Twitter, Gucci and countless others having launched NFTs, we can see why many of these big brands have been comparatively less successful in adopting some of the new rules of brand building.

Let’s use Moonbirds to illustrate nine brand-building lessons for Web3.

People are at the Heart of a Brand’s Reason to Believe (RTB)

Moonbirds was built out of PROOF Holdings which had already successfully launched PROOF Collective, a proven NFT community. The belief in the team – Kevin Rose (Revision3, Digg), Ryan Carson (founder of Treehouse), and Justin Mezzell, an experienced artist, illustrator, and product designer – is the core of why there is a demand for this project. At Prophet, we talk a lot about human-centered transformation. So, much of a brand’s success in Web3 will be built around having strong people committed to building the brand in addition to driving demand, engagement and the overall experience.

Leaders that Drive Brand Content Development and Community Engagement

Content and community for Moonbirds have been largely driven by its founders. Kevin is an avid podcaster (Proof, Modern Finance) and Ryan is one of the more prolific people on Discord and Twitter. Ahead of the launch, they’ve been on a roadshow translating the brand’s vision and building demand and understanding of the project. Web3 brand building will require a greater emphasis on leaders’ ability to be the marketers building demand for their brands vs. the legacy approach of the most junior or outsourced teams managing customer relationships, content creation and communications.

Evolved Monetization Strategies Pushing Perpetual Brand Building

Moonbirds is committed to reinvesting all raised funds in delivering for the community. This means that token holders are delivered value ahead of the brand capturing it. Over time, Moonbirds allows PROOF Holdings to build valuable infrastructure like new technologies, a strong team, community and much more which can be monetized in the future. Tokenizing these assets broadly contradicts the “create demand and sell” model of traditional commerce in favor of developing an always-on, brand-demand flywheel – one that creates ongoing value for a community of token holders. Web3 will push business model design to create sustained demand that engages communities gated by tokens. This will allow brands to collect perpetual royalties in a brand-demand flywheel.

Influencers Become a Rising Channel for Brand Building

Moonbirds unlocked a host of ecosystem partners beyond PROOF’s 1,000-member community to grow the brand. This includes some of the most influential bloggers, vloggers, podcasters, social posters and other Key Opinion Leaders (KOLs) in the space. As media is becoming increasingly decentralized, brands will need to partner and engage KOLs to play a very important role through longer-form audio, video and visual content.

Community Shares in Brand Marketing and Brand IP Ownership

Moonbirds (and other Web3 projects) violate a long-held brand-building belief on Intellectual Property (IP) rights being sacred to the brand. Every owl in the Moonbirds collection is owned by the community member that buys it. These owners have unique rights that unlock new possibilities; from making it their digital identity to designing clothing, to creating a gin brand featuring their unique owl. Some creators go as far as putting brand-built IP for owners into full creative commons (CC0).

“Prophet sees the next wave of brand building in Web3 where marketers rethink IP ownership and its value exchange with their communities.”

While this won’t happen in all industries, Prophet sees the next wave of brand building in Web3 where marketers rethink IP ownership and its value exchange with their communities. These communities will play a powerful role in the brand’s marketing army, sharing in the monetary reward, and helping the brand unlock uncommon growth.

Disruptive Design and Brand Visual Identity Systems

On the surface, Moonbirds design is basic pixelated art. That choice was deliberate so the art itself can live fully on the blockchain. What’s innovative about each bird is a design system that stretches the visual identity of the Moonbirds parent brand into unique community expressions of the owl for each community member. This flexible design system allows for many permutations. The process for building these also involves greater inclusion using a panel of diverse team members to inform design decisions. While not all Web3 brand building will result in individual NFTs, the design will stretch brands into more flexible, disruptive, inclusive, and adaptive visual systems that allow the brand to be more self-expressive, community-minded, and unique.

Continuous Brand Feedback Loops

Moonbirds leverages the 1,000 members of PROOF Holding’s PROOF Collective community to build the brand. These members became an idea engine and feedback loop that drove continued innovation for the Moonbirds launch. Decisions large and small were sourced to make the project more exciting and successful. We see a future of brand building in Web3 that doesn’t purely rely on smart product teams and strategists building brands, but also on open-sourced innovation and rapid, continuous feedback loops from brand communities that shape a number of brand-based decisions and capabilities.

Brand Roadmaps with an Ongoing Sequence of Innovative Activations

Moonbirds’ day-one announcement included a set of innovative experiences and activations they had planned for the communities. These included community meetups along with other IRL events, exclusive merchandise and access to a new version of the Metaverse called Project Highrise. Many legacy brands that have launched NFTs have fallen short by not thinking through such ongoing engagement and gamification or play with their communities. The best brand building in Web3 will solve the Brand-Demand equation by using a series of unique, ongoing and inspiring activations that will propel the brand and communities forward.

Moats Build From a Brand’s Unique Capabilities

Well-known personalities such as Alexis Ohanian (co-founder of Reddit), Tim Ferriss (best-selling author), Gary Vaynerchuk (entrepreneur), along with artists like Snowfro (also ArtBlocks founder), Xcopy, Larva Labs and Justin Aversano make up a partial list of the powerful network built by the founders of Moonbirds. This network allows the team to drive unique relationships and brand activations that can’t be achieved by others. One such signal for Moonbirds was the development of birds with unique space helmets, possibly getting special private tours of the SpaceX facility. We believe the future of brand building will rely on connecting tokenized goods like an NFT into gated access passes to both digital and physical products and experiences that only your brand can uniquely provide. These sources of value will be the true moats for brand building in Web3.

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NFTs provide a clear long-term value proposition for consumers that is hard to ignore: verifiable ownership, sharing in a brand’s value and near-frictionless sale and transfer of unique digital goods. This technology will inevitably disrupt nearly every industry (e.g., ticketing, membership, deeds for physical property, all forms of media, etc.).

With NFTs, it is fair to acknowledge some speculation around profile pictures (PFPs) and other art being created as a Ponzi scheme or a way to “get rich quick.” However, adoption continues at an exponential rate and what we see emerging early on, is that these types of NFTs are serving a fundamental physiological function that mirrors luxury goods in terms of belonging and self-esteem. That, coupled with strong communities and different practical use cases (meetups, physical spaces, exclusive access to events) are still being developed.

As brands continue to enter the proverbial build a presence in Web3, much will evolve and marketers should continue to watch the space and learn from projects like Moonbirds.

Want to learn more about partnering with Prophet on driving growth? Contact us today.

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Growing Sustainable Fashion: Inspiring Brand Moves for DTC Companies

Although the fashion industry traditionally follows seasonal trends, sustainability is proving to be a year-round wardrobe staple among DTC brands and their customers. Recycled materials, circular fashion and ethical supply chains are capturing headlines as brands depart from a legacy of wasteful production processes and find new ways to revolutionize the fashion industry’s carbon footprint.

Despite the ongoing buzz and urgency, among both customers and brands, to address such issues, the sustainable fashion market remains a fraction of overall fashion sales. Additionally, consumers’ intentions do not yet match their purchase habits. As documented by ecological certification company Oeko-Tex, 69% of millennials report an interest in purchasing sustainable fashion, however only 37% purchase sustainable fashion. This points to a meaningful opportunity to convert that interest into a purchase.

As DTC fashion companies look to expand the ethical and sustainable share of the overall fashion market, they must consider the factors that are hindering consumers from purchasing more sustainable garments. The high price point of sustainable clothing, low awareness of the environmental impact and lack of trust in sustainability claims have been clear limiting factors.

Brand loyalty stands out as a key strategic move that DTC companies can immediately pursue to increase their share of the sustainable fashion market and help grow the industry overall. Brand loyalty can help DTC companies increase their relevance amongst consumers and break down some of their hesitations about sustainable fashion.

To increase brand loyalty in fashion sustainability, successful DTC brands often focus on one, or both, of the following:

  1. Brand message
  2. Brand inspiration

These levers are powerful ways to shape consumer perceptions and drive enduring loyalty.

1. Building Loyalty Through Pervasively Innovative Brand Messaging

DTC fashion brands that are truly pushing sustainability forward and not resorting to greenwashing are building lasting brand relevance and loyalty. Some consumers are wary of brands that talk about sustainability without the innovations in the supply chain, or a business model to back up the claims. DTC fashion brands that create innovative messaging on sustainability have a chance to win in the market.

The LA-based sustainable clothing brand Reformation offers a powerful example of a profitable DTC fashion retailer that has managed to combine growth with genuine innovation in sustainability. Reformation has made understanding sustainability more accessible for consumers, by publishing environmental impact data and content for each individual item on its website. Its sustainability report from 2020 also highlights how it works with supply chain partners to utilize clean chemicals and ensure that 75% of its fibers meet its two highest standards for sustainability.

Reformation has also been a pioneer in making sustainability content feel approachable through clever taglines like “Carbon is canceled” and “Being naked is the #1 most sustainable option, we’re #2.” All in all, its commitment to building a community of loyal and environmentally conscious customers through DTC brand practices has shown great success.

2. Building Loyalty Through Distinctive Brand Identity

While important, innovation in sustainability messaging isn’t the only tactic necessary to drive DTC brand loyalty. DTC fashion companies must have distinctive, inspired products and a brand identity to match. The Business of Fashion’s profile of the divergent paths of DTC brands Vuori and Entireworld offers a cautionary tale of what happens when companies are not distinctly inspired. Vuori is a clothing brand that sells activewear and athletic clothing, while Entireworld was a leisurewear brand.

In October, Vuori secured hundreds of millions in investment to expand its activewear brand, while Entireworld shuttered. In addition to profitability, much of Entireworld’s failure was due to its undifferentiated product. Vuori launched new segments like men’s activewear and surf apparel, whereas Entireworld struggled to compete solely on its sweatsuits. Without new inspired apparel pieces and adjacent products, Entireworld failed to stand out in the marketplace.

“The high price point of sustainable clothing, low awareness of the environmental impact and lack of trust in sustainability claims have been clear limiting factors.”

Distinct inspiration has also allowed emerging fashion brands like Ahluwalia to gain an obsessive customer following. Ahluwalia’s designer Priya Ahluwalia has built her collection around repurposed vintage pieces. This signature look is gaining attention for breaking the mold and Priya has received industry-wide recognition winning the prestigious 2020 LVMH award amongst others. Ahluwalia’s pieces stand far outside the fashion norms that retailers like Zara and H&M adhere to, and this has built a small but loyal following for the brand.

However, the pressure doesn’t stop with consumer demand and creative competition, recent legislative pushes, like the Fashion Act in New York state, could require companies to “map at least 50% of their supply chains and disclose impacts such as greenhouse gas emissions, water footprint and chemical use.” This development indicates that the mandate for a more sustainable fashion industry will not diminish anytime soon.

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Reformation, Vuori and Ahluwalia demonstrate that on the path towards sustainability, DTC fashion brands are far from uniform. However, at their core, these brands share a drive to grow through innovation and inspiration that sets them apart from competitors. Most importantly, sustainability is at the heart of their brand story.

Prophet’s Vice Chairman, David Aaker says “The concept of a signature story – an intriguing, authentic, involving narrative – applies the power of stories to strategic messaging.”

Learning to create and leverage signature stories has truly become a “must-have” management competence. Companies that focus on brand loyalty through innovative brand storytelling and an inspired identity have an opportunity to grow market share now and in the future in the sustainable fashion market.

Prophet is working with leading DTC companies in fashion and across industries on brand strategy, growth strategy and performance marketing. Interested in finding out more? Contact us today. 

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Organizing Brand-Demand Marketing Teams for Success

In the fifth and final installment from our Brand-Demand Love series, informed by our conversations with marketing leaders across industries, we’ve outlined the steps to integrating brand and demand marketing capabilities to win in a complex and dynamic landscape.

If we think of marketing organizations as households, they are often not very harmonious, thanks to the common tension between brand and demand generation teams. Our blog series has described why these two marketing disciplines struggle to work together to achieve mutual success. To attain productive and peaceful integration, brand and demand teams must define the best ways to organize people and teams, collaborate productively and deploy the right capabilities and tech.

Overcoming Fragmentation 

In our discussions with marketing leaders, the brand-demand split in organizational structures was a common challenge. “One of the big barriers for marketing in our industry is how we’re structured,” a technology CMO told us. “There’s the performance marketing team on one side and then there’s everyone else, including brand people, on the other.”  

In many businesses, brand and demand are viewed as unrelated capabilities, run by disparate teams with little to no insight into each other’s activities or results. Other common symptoms of unhealthy brand-demand organizational structures include:  

  • Separate planning cycles and budgeting exercises 
  • Distinct KPIs that often do not align with broader business objectives
  • Lack of knowledge sharing
  • Talent deployed to standalone channels or capabilities, with little cross-functional collaboration or rotational assignments  

When marketing teams are organized this way, it’s impossible for brand and demand teams to communicate openly, share data freely, or collaborate productively – much less fall in love again. 

A manufacturing vice president of marketing told us that fragmentation is largely down to leadership:

“If your teams are fractured and chaotic, that’s because your leadership is fractured and chaotic.”

This speaks to the importance of leadership in ensuring different functions work together toward shared, big-picture goals. 

Rethinking the Marketing Organization Chart  

There’s no single ideal structure for a marketing organization, but certainly, brand and demand should not be managed as separate entities. Some top performers organize their teams around customer type, while others use product line, channel or functional discipline. Again, there’s no definitive best practice. A B2B manufacturer that restructured its marketing operation around how customers buy, rather than product lines, became more responsive to business needs.  

Marketing at 7-Eleven is organized by discipline, according to CMO Marissa Jarratt, but with a recognition that no one works in isolation. For instance, the company established a customer analytics and insights team to inform business decisions. “Then came the responsibility to socialize those learnings across the organization in a thoughtful way,” she said. “You can have really smart people, but it has to be a team sport.”  

Fostering Collaboration 

No matter the organizational model companies choose, collaboration is key. Collaboration can take many forms:  

  • Joint strategic planning sessions 
  • Monthly knowledge-sharing sessions 
  • Flexible campaign planning exercises and roles, including metrics definition and budget allocation  
  • Integrated campaign performance readouts 

All of these activities can – and should – include external agencies, consultancies and other third-party providers, as well as in-house agency capabilities where relevant. “We need holistic collaboration from our partners to help us work through our evolution,” said Shelley Haus, CMO of Ulta Beauty. Indeed, several marketing leaders who we interviewed considered external partners to be part of the marketing organization and capable of helping bridge the brand-demand divide. 

Collaboration can also help solve tactical issues. For instance, brand and demand teams both want efficient and effective content marketing capabilities, which require coordination and asset sharing. “We need atomized content approvals and integrated digital asset management flows so content and images can be reused quickly and easily by many teams,” said a senior marketer at a large financial services firm. “Otherwise, teams can’t streamline timing or use a ‘test-and-learn’ approach based on integrated results from everywhere.” 

Boosting Brand-Demand Integration Through Capabilities, Talent and Tech 

Several marketing leaders we interviewed talked about the pressing need for new talent. Everyone is looking for data scientists, business analysts and digital strategists; thus, brand and demand teams should look to share in-demand specialist resources.  

More than one marketing leader described the need for more communication and training across disciplines to promote better understanding. Job shadowing and rotational assignments can help in these areas. Another challenge involves varying experience and backgrounds: “Brand marketers run the show and they all went to the same business school, while performance marketers all come from DTC brands,” said Ashley LaPorte, ex-CMO at Seventh Generation. Organizational design and cultures that emphasize collaboration and shared goals can help overcome these barriers.  

Compensation models and incentives are other effective levers for driving integration between brand and demand. Defining joint performance goals tied to overall business performance may facilitate the shift away from time and expense cost models to more incentive-based pay models, which would encourage brand and demand marketing teams to collaborate more frequently.  

Technology has a role to play as well. A strong MarTech stack can successfully integrate data across disparate sources and promote connectivity among different functional areas. Adopting content personalization at scale requires integration across brand and demand teams – and their corresponding tech stacks. Performance marketing functionality can also be embedded directly into tech platforms to give brand teams more access to relevant insights and tools.   

The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact.
Download today!

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We believe the most successful and productive relationships – in business and in life – involve shared goals and commitments. Achieving these goals requires collaboration, communication and an effective division of labor. For brand and demand teams to deliver optimal performance in line with their shared goals, they must organize their “home” in ways that reflect and support these principles. Because brand and demand must live together, we’d recommend they aim to do so with utmost harmony and respect for each other’s unique genius and power. That’s how they can reignite the love in their relationship.  

Do you need help breaking down the silos separating your brand and demand marketing teams? Our Marketing & Sales practice can integrate your teams to achieve mutual success. Get in touch. 

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How Sales and Marketing Drive Relevance

While sales and marketing have always required a bit of art alongside science, Prophet’s latest 2022 Brand Relevance Index® (BRI) shows that the balance is shifting. The COVID-19 crisis has changed how people consider brands, increasing the human tendency to consume emotionally. In today’s climate, we want to feel brand love before we deploy our dollars. We want to buy from companies that make us feel good, seamlessly marrying depth of relationship with convenience and meaningful experiences. And, ultimately, that’s changed how demand is actualized.

Leaders of this year’s index–our seventh–reveal these new patterns. The best brands are increasingly finding success in our new normal by the way they connect with us as humans. Some go right to the heart, building emotional resonance. Others appeal to the head, drawing us in with practical benefits. A small group of all-stars, led by Apple, Peloton, Spotify, Bose and Android, manage to do both.

Even when faced with significant speed bumps, these companies know customer relationships are everything in the world of demand generation. Relationships sit at the intersection of growth, experience and data. Brands that understand that dominate this year’s index. They are prioritizing innovation investments in the service of customer needs. The most relevant marketers push beyond the status quo, driving brand marketing investment to conversion.

We see them acing demand generation in two ways. Relevant brands are …

Deepening Relationships

The next iteration of acquisition and retention is maintaining devoted relationships with customers. Peloton, which ranks #2 overall and comes in first in our “Heart” metrics, perfectly illustrates that brand passion. Devotees could care less about its sputtering stock valuation. They just prize it for the rich experience, and the ongoing value exchange between consumer and company, across channels and touchpoints.

Relevant brands like Peloton have built products that seamlessly integrate into the lives of their customers and then rely on advocacy to promote pipeline. When something is indispensable to us, it’s easy to inspire others to participate. Tactics like Peloton’s “refer-a-friend” are mutually beneficial and authentic.

Spotify (#3), PlayStation (#7) and USAA (#10) are also thriving on the rich sense of discovery and community-building.

Fostering customer relationships requires a transition from investment to brand perception metrics. And it calls for prioritizing improved retention and loyalty models that focus on relationship longevity.

Demand generation and performance marketing allow brand marketers to relentlessly test and learn. When relevance is a moving target, performance branding will enable us to reach customers in new ways and experiment with tactics. Performance marketing is the finger on the pulse of all relationships.

Monetizing Experiences

It’s not news that the brands at the top of the index are known for providing engaging and unforgettable experiences for customers. In turbulent times, relevant brands help people feel safe and make life easier. They encourage us to experience parts of ourselves that we’ve missed in this constrained pandemic period. Generating demand and monetizing these trusted experiences requires careful finesse.

Increasingly, we see opportunities for investment in revenue streams through user interface and experience. Innovative brands are reframing go-to-market strategies. For example, some are redefining sponsored commerce beyond traditional search and banner ads, building an ecosystem for media that can extend into brand-owned properties, channels and ad units. These brands have an opportunity to explore what we call “BYO (build your own) Walled Garden,” obtaining both valuable first-party data and ad revenue.

“Innovative brands are reframing go-to-market strategies..”

Apple is the most obvious example, moving from device-driven relationships to becoming an arbiter of news, music, video and apps. It’s no surprise that it’s ranked #1 since we started our relevance research in 2015.

Companies like Fitbit (#8), TED (#9) and Teledoc (#21) are also flourishing through expanding ecosystems.

Others are gaining relevance through the rise of open payment architecture. Afterpay (#11) leads our index in financial services, showing that consumers value digital-first, customizable solutions that are reliable and transparent. Of the 293 brands we measured, it ranks #1 in the “Lives up to its promises” attribute. These “Buy Now/Pay Later” models afford trusted and convenient opportunities for customers to transact in channel. And they create new revenue streams for savvy organizations.

These customer-acquisition efforts have a direct influence on brand perception–both positively and negatively­­. And they are increasingly defining cross-channel customer strategy. As the marketing value chain collapses, we have instantaneous feedback between brand-marketing investment and revenue attribution. Growth-minded CMOs find the delicate balance in customer experiences that support both brand and demand.

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The Future of Branding is Performance-Oriented and Vice Versa

We see first-hand the value clients achieve when they overcome capability silos–even within marketing. Coordination across customer-facing disciplines is fundamental for building relevance through customer understanding, targeting and addressability. It’s also critical in achieving greater precision in measuring upper-funnel brand impact, both due to data and experiential continuity.

To achieve uncommon growth, brands have to measure the sales stimulation that arises from brand awareness and perception shifts. With marketing fatigue and increasing budget pressure, the onus is on brand advertising to evolve from “spray and pray” to value-added and relevant placements.

Likewise, performance marketers need to lean into the incredible value of a beloved brand. Demand generation must support–not undermine–brand trust, love and relevance.

Get in touch today if you’d like to learn how to develop effective go-to-market strategies to unleash your company’s “Brand-Demand Love.”

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Brand-Demand Love: Achieving Success and Satisfaction Together

Informed by the conversations we’ve had with CMOs across industries, this fourth installment from our Brand-Demand Love blog series explores how to integrate brand and demand marketing capabilities to win in a complex and dynamic landscape. 

Even in the most complimentary relationships, financial matters are often a source of significant stress. For brand and demand-gen marketing teams to achieve the fully integrated and highly productive marriage we have been describing so far in our series, they must address the potential friction points involving budgeting, investment and performance measurement.

Agreeing on big-picture goals and investment priorities is the first step, followed by defining metrics to track performance. Receptivity to new approaches and flexibility to adjust as needs change is also key. As our research with marketing leaders has made clear, these issues are critical to unleashing uncommon growth through more effective and agile marketing capabilities across the customer lifecycle. Brand and demand teams ultimately share a pocketbook and prosper (or struggle) together.

Building Balanced Budgets and Allocating Investments Equitably

Many marketing leaders confess to being “obsessed” with finding the right investment mix. There is no shortage of conventional wisdom on how to allocate budgets and balance the investment mix. One common industry standard is the 60/40 rule, an investment recommendation proposed by Binet & Field’s 2013 study. The thesis: Allocating 60% to brand and 40% to demand yields the most effective balance of near-term acquisition and long-term performance.

Such rules of thumb seem to offer quick, evidence-based solutions. They also help defend brand investments, as many marketers want—and feel an urgent need to do—as e-commerce and digital have gained the upper hand in budget battles. However, this may not fully account for the variables of consumer behavior, broader market trends or the unique business contexts faced by different organizations. Modeling investment and measurement decisions against product lifecycle stages (e.g., product launches, mature offerings) can help marketers track progress toward specific goals.

Marissa Jarratt, chief marketing officer of retailer 7-Eleven, seeks to manage marketing investments like a portfolio. She balances higher-risk bets that offer big potential upside while also making safer plays that bring more predictable returns. “This is becoming more of a science,” said Jarratt. “We’ll take risks if we think it can drive a target downstream impact or outcome.” Such a balanced view of risks and rewards helps optimize the media mix across funnel stages and seasons.

Sudden market shifts put a premium on agile planning and budgeting. As Ashley Laporte, director at communications firm RALLY, told us:

“It’s not about finding the perfect proportions to balance brand and demand but finding a flexible framework that understands how everything connects.”

Mastering the Metrics and Digging into the Data

Performance metrics and attribution models continue to proliferate and evolve. There has been a pronounced shift away from brand surveys toward more agile measurement approaches. The leaders we interviewed expressed uncertainty about which metrics and KPIs are the most accurate and how to enable insight-based decision making.

Even firms that can transcend traditional difficulties in measuring brand performance face challenges. As Jennifer Warren, VP of global brand marketing at Indeed, told us, “Business and finance leaders want to know how a 2% lift in consideration translates to sales and revenue.” Such visibility is difficult to achieve, as is determining ROI on long-term, multi-year brand investments. Marketers are now being asked to develop KPIs to measure the effectiveness of purpose-driven strategies around sustainability, for example, or diversity and inclusion efforts.

Despite the challenges, being data-driven enables marketers to speak the language of the business. As Portia Mount, VP of marketing, commercial HVAC Americas at Trane Technologies, put it, “When financial leaders say, ‘let’s cut all the brand stuff and just do demand,’ our job as marketers is explaining what the impact will be if we shut something down.” Better performance data and stronger customer insights make for more productive conversations in explaining that choosing between brand and demand is not a zero-sum game.

“I don’t think that there is a silver bullet for measurement,” said Tyrell Schmidt, U.S. chief marketing officer, TD Bank. “We are really careful not to oversell performance, which is easy to do because it always drives the fastest results.”

A Shared View Builds a Shared Stake

Demand-gen leaders also face challenges in tracking performance as major tech companies like Google and Apple work to shift away from the use of cookies. Consumer goods firms struggle to get point-of-sale performance data from partners (e.g., e-commerce platforms and big-box retailers) and look to fill the gap with third-party data (e.g., credit card records, basket analysis). The bottom line: as much data as marketing leaders have, they are always looking to attain the most relevant data.

The lack of alignment between brand and demand adds another layer of complexity. Today’s “incongruent” KPIs result from a lack of incentives to “play nice,” according to one CMO. Ideally, rich data and aligned KPIs are used within an agile budgeting and forecasting model that incorporates multiple time horizons (annually, quarterly, daily) and enables opportunistic, real-time adjustment.

Integrated performance dashboards accessible by both brand and demand teams have enabled some firms to generate holistic insights by combining both short-term (e.g., search data) and long-term (e.g., Net Promoter Scores) metrics. These efforts reflect the need for marketers to experiment and innovate in their approach to financial matters. At Prophet, we recently partnered with a health services client to develop an integrated performance dashboard across brand, demand and customer experience teams, enabling a cross-functional understanding of campaign performance.

Summarizing the Questions You Need to Ask

Looking ahead, brand and demand teams must commit to open communication and engagement to achieve a strong and harmonious relationship. When it comes to financial matters, flexibility is also key. In order to pave the way to a household of shared finances, you need to ask the right questions and the following are worth considering in setting the right investment priorities and measuring the effectiveness of collective efforts:

  • How much impact does brand marketing have on conversion?
  • What impact do customer acquisition efforts have on brand perception?
  • What’s the appropriate level of investment across brand and demand without sacrificing overall performance?
  • What do specific metrics tell us? Which metrics are most meaningful and why?
  • Are we measuring campaign performance holistically and across the funnel?
  • Do we have a shared view of brand and demand and how they connect to the business in the short and long term?
  • Are key measurements used to inform annual planning cycles?

The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact.
Download today!

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In our next post, we’ll look more closely at how to set up a “happy household” ­– that is, organizing teams and building the right capabilities so brand and demand can have a comfortable nest for their life together. 

If you’d like to learn more about how your organization can overcome common challenges while integrating brand and demand marketing capabilities then get in touch here. 

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The State of Digital Transformation in Europe

The state and success of digital transformation varies considerably around the world, with some distinct disparities between the digital “haves and have-nots.” The latest global research report from Altimeter, a Prophet company, provides not only detailed insights on the differences between individual markets but also some key learnings.

The U.S. market, for instance, is largely looking past digital transformation, having invested heavily during the last 10 years to replace legacy infrastructure and migrate more operations to the cloud. U.S.-based firms today are focused on strategic innovations (e.g., greater customer-centricity, digital product development). However, China, which never had to contend with outdated systems, was able to leapfrog ahead to advanced apps and immersive digital experiences.

In Europe, there is a wide variance of digital maturity. The U.K. market looks more like the U.S., but Germany is not quite as far along on its digital transformation journey. It’s also important to note that the most advanced firms in Europe have reached the same level of digital maturity as digital leaders in China and the U.S., but average firms generally lag compared to their global peers.

Europe is Catching Up in Its Digital Transformation Efforts – Quickly Enough Though?

Taking a closer look at Altimeter’s data in terms of C-level sponsorship of digital transformation initiatives, the U.K. has the highest tendency to appoint a CDO or CIO to own and/or sponsor digital transformation. However, Germany and the U.S. tend to rely marginally more on the CIO or CEO. At the same time, more American and Chinese firms report excellent results from their digital transformation programs, but most European companies report that they only have good or fair results.

A potential reason for this is that European firms are somewhat more conservative in their approaches to transformation overall. For instance, German firms prioritize employee engagement, digital literacy and operational efficiencies in their digital transformation agendas as much as they do growth. Innovation, on the other hand, is a much lower priority.

U.S. firms are notably more focused on profitability and revenue in their digital transformation programs than their European counterparts. It seems that many European firms are focused on keeping in step with their peers and competitors and that’s especially true in Germany. The implication is that many established European companies are still building a digital foundation for the future.

“more American and Chinese firms report excellent results from their digital transformation programs, but most European companies report that they only have good or fair results”

U.K. organizations are the most likely (69%) to cite using digital technology as an opportunity to become more efficient, perhaps partially reflecting the need to improve their lagging productivity rate versus the U.S. (46%), Germany (42%) and China (52%).

German organizations (58%) are the most likely to view digital technology as a priority investment to replace outdated or obsolete technology, as compared to the U.K. (40%), U.S. (39%) and China (18%).

Europe Invests Long-Term and the U.K. Adopts Agile Working Methods

Compared to U.S. firms, European firms also have longer-term expectations for their transformation investments. At least 40% of surveyed companies in Germany and the U.K. expect it will take at least two years to see positive results from transformation investments, versus 31% of U.S. firms. One reason for the longer time horizon is the relative lack of sufficiently digitally trained staff, which is a bigger challenge in the U.K. and Germany than it is in China or the U.S.

Of course, Europe cannot be considered a monolithic market. There are substantial differences between the U.K. and Germany. The U.K. firms surveyed have adapted better to digital transformation by, for example, adopting agile working to a greater extent than those organizations in Germany, which are more likely to have process-driven cultures.  Additionally, data silos are a much bigger problem in Germany compared to the U.K., which shows more leadership in data science.

In Germany, digital marketing is still mainly viewed in terms of ad campaigns. And in both the U.K. and Germany, digital marketing is generally below average in owning the customer experience. There are also varying priorities for the future: U.K. firms put less focus on hiring and training in digital transformation and as a result, business model changes are less likely to happen in Germany. Also, cybersecurity and cloud adoption are important priorities in the U.K., while cross-functional collaboration platforms are of less relevance in Germany.

Don’t Focus on Infrastructure, Focus on Creating an Agile Organization

Our digital transformation research, as well as our market experience, suggests that firms are better served by focusing on organizational changes and improved agility rather than updating infrastructure. After all, infrastructure is constantly advancing so that’s a job that will never be completed. But increased organizational adaptability and agility will help organizations adjust to ongoing change and proactively drive it.

Approaching these challenges in the right way is key. To do so, companies should follow a three-step approach:

  1. Digital Benchmarking: Conduct a rapid heatmap assessment of your organization’s (enterprise-wide) digital transformation maturity. Identify where the opportunities for improvement are, and how your business benchmarks against best-in-class digital maturity (both in your market(s) and globally).
  2. Digital Immersion: Run a digital innovation workshop with key stakeholders across your organization to share the latest digital trends (not just specific to your industry, but also apply learnings from other industries) and explore the digital art-of-the-possible to identify opportunities for augmenting your own digital transformation journey.
  3. Digital Mobilization: Build (or revisit your existing) digital transformation vision and roadmap, ensure all roadmap initiatives are tied to commercial value and make certain tracking mechanisms are in place to guarantee the realization of this value.

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Looking ahead, companies in Europe, particularly in Germany, must address many of the same challenges that U.S. firms (and the more digitally mature companies in Europe) have started overcoming already. That means breaking down data silos, converting raw data into actionable insights and adopting more agile ways of working.

How does your company stack up in the digital transformation stakes? Get in touch today if you’d like to benchmark, excite, transform, and unleash the full power of your business.

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How Effective Go-To-Market Strategies Unleash Brand-Demand Love

The third post in a series about integrating brand and demand marketing capabilities to win in a complex and dynamic landscape.

We think it’s time for brand and demand to fall in love. After all, they’ve long been attracted to each other’s strengths and can shore up the other’s shortcomings. When brand and demand build a strong, sustainable and mutually satisfying relationship of equals it lays a foundation for increased brand relevance and ultimately leads to uncommon growth.

Like the best marriages and strongest teams, a commitment defines what is possible. Bringing complementary skills together leads to greater mutual success. In talking to senior marketing executives, we heard passionate interest in unifying marketing at every level and taking an integrated, agile and data-driven approach.

If one were to equate a relationship’s declaration of commitment to a declaration of commitment between brand and demand marketing organizations, one may reference a marketing go-to-market (GTM) strategy. An effective GTM strategy provides strategic guidance for achieving an organization’s performance goals across key channels and disciplines. Despite the importance of this guidance, marketing organizations continue to face challenges in developing an integrated GTM strategy across their brand and demand teams, leading to misaligned activation plans which ultimately impact the efficacy of campaign efforts.

The Prophet-developed framework described below highlights the key components of effective go-to-market strategies that powerfully combine the best of brand and demand. They are important because achieving the appropriate brand-demand balance is a constantly moving target, meaning GTM strategies must be designed for flexibility and ongoing adjustment.

Key aspects of the CMO agenda – from audience strategy to creative and content – are central inputs to designing an effective brand and demand capability. Indeed, they are the vows by which brand and demand teams can build solid and successful relationships.

Marketing GTM Strategy Framework

There are six key areas to address as part of an integrated go-to-market strategy, each with its own set of requirements and implications for execution.

Brand Strategy: Brand Position, Architecture, Key Messages, Voice and Expression

The brand strategy forms the core of the brand identity and should manifest itself clearly and consistently across brand and demand campaign initiatives.

Audience Value Propositions: How to Win with Your Audiences

Audience value propositions describe the reasons audiences should have an interest in your brand, product or service.

Customer Data and Insights: What You Need to Know About Your Audiences

The successful utilization of customer information provides insights into their behavior and opportunities to convert across channels. Both brand and demand campaigns generate key customer insights which can be used to improve all campaigns (for example high-performing digital placements on the sports-oriented websites may provide a rationale for purchasing TV ads on sports networks and programming). Establish a pipeline for sharing customer data and insights between teams.

Pricing and Distribution: How and Where Audiences Will Find Brand, Product or Service

Understanding how customers can acquire your product or service, including the cost associated with that acquisition, is a key consideration. While demand channels can provide a direct path to conversion, the impact of brand channels shouldn’t be ignored.

Creative, Content and Channel: Content and Experiences Will Attract and Convert Audiences

Creative and content contain the messaging and imagery that will connect audiences to your brand, product or service. While creative formats vary across brand and demand channels, a holistic analysis of creative performance provides opportunities for greater insights and improved content creation.

Media & Channel Communications: How, Where and When You Will Find and Engage Audiences

The touchpoints by which a customer can be reached and converted are important facets of any GTM strategy. An integrated model requires a mutual understanding of media campaign strategy and channel selection.

When developing a go-to-market strategy, it’s crucial to understand the implications for both brand and demand marketing teams. While each team is responsible for the successful deployment of campaign efforts against their respective channels, their measure of success should align against the overarching goals of the organizations as set forth by the GTM strategy. Organizations should avoid us vs. them mentality when crafting their organization and recommendations but instead account for the holistic impact of their recommendations against an aligned, cohesive goal for the organization at large.

Again, there is no set formula for effective brand-demand integration. Even if there was, it would fluctuate based on multiple market variables. That’s why these strategic principles are so powerful ­– they keep marketers pointed toward the “north stars” of business strategy and organizational purpose while enabling the necessary recalibration of campaigns, budget allocations and other levers that produce strong outcomes.

In our next post, we’ll look more closely at the financial and pocketbook implications of brand-demand love. Specifically, we’ll examine how:

  • To define shared goals
  • Set an investment agenda
  • Define smarter metrics for allocating budgets and tracking performance
  • Highlight how brand and demand can stop fighting about money

The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact.
Download today!

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Understanding where brand and demand might have shared foundational components, from brand strategy to creative and content distribution, can create shared value across marketing objectives and enable greater agility between brand and demand goals. This sort of synergistic and complementary relationship is what we mean when we talk about brand-demand love.

Get in touch today if you’d like to learn how to develop effective go-to-market strategies to unleash your company’s “Brand-Demand Love”.

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Micro-Communities: How Modern Marketers Unlock Uncommon Growth

Big gains lie in tiny targets. From “sporty families” to “productive escapists,” it pays to rethink segmentation.

Understanding your customer’s brand preferences and buying behaviors is no longer enough in today’s hyper-competitive market.

Discovering and engaging with your micro-communities is a way to unlock a growth strategy based on targeting and engaging with your target customers empowering modern marketers to create highly focused and performance-based tactics in customer acquisition and customer retention.

Take a closer look at our infographic below to learn how micro-communities can deliver long-term impact on digital marketing and sales effectiveness.

Prophet works with industry-leading clients to incorporate business strategic objectives, market opportunity and customer research to identify and prioritize unique, multiple micro-communities. Learn more about what are doing in all things direct-to-consumer.

If you want to explore how discovering your micro-communities can drive your growth and performance marketing, contact us today.

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How Brand-Demand Love Wins Across the Marketing Lifecycle

The second post of a series about integrating brand and demand marketing capabilities to win in a complex and dynamic landscape, based on our conversations with CMOs across industries.

As we highlighted in the first post in our Brand-Demand Love series, we think it’s time for a more integrated and complementary relationship between brand and demand-gen marketing. Why? Because the current separation isn’t aligned to the dynamic purchase behaviors of consumers across an increasingly complex landscape. As Karla Davis, VP of Marketing at Ulta Beauty, told us:

“What is brand, and what is demand? That’s a little gray now.”

Karla Davis, VP of Marketing at Ulta Beauty

When accomplished senior marketers question the validity and usefulness of the traditional brand-demand paradigm – and many do – then surely, it’s time for a new model. After all, the effective coordination of brand and demand-gen activation strategies represents an integrated and agile marketing capability – the gold standard amongst marketing pros.

Feeling the Brand-Demand Love Across the Marketing Lifecycle

Brand and demand-gen activation cannot be viewed as separate or competing functions, but rather as interdependent and mutually reinforcing capabilities that comprise the core of the overall customer experience.

Each set of tactics has a significant role in attracting buyers and strengthening relationships at every step of the customer journey and across the entire lifecycle. But, taking the perspective of marketers, it’s easy to see why the brand-demand balance is fluid. When considering marketing activation investments, companies might adjust their orientation as:

  • Brand-led
  • Demand-led
  • Balanced

As business objectives evolve and companies navigate distinct phases of maturity, the optimal marketing approach will vary. For instance, a brand needing to differentiate from a competitive pack may need to be brand-led to generate awareness and consideration, while a business undergoing a portfolio launch, expansion or refresh may have more balanced brand-demand priorities.

For businesses focused on customer acquisition or market share gains, demand-led models will serve their immediate priorities in tandem with brand campaigns. Many direct-to-consumer brands, unique in their offerings, initially focused on acquisition only to shift towards brand marketing as their category became crowded. Mature organizations that find themselves at a point of market saturation and businesses without fully defined offers will both rely on brand-led marketing efforts to develop, sustain and enhance customer relationships.

Learning from Airbnb

Airbnb’s decision to cease all demand generation activities coming out of the pandemic suggests just how much the brand-demand pendulum can swing. When the pandemic shut down all travel, the company eliminated its marketing activation spend, which totaled $1.62 billion in 2019. As lockdown restrictions eased, Airbnb saw most of its traffic return to pre-pandemic levels, prior to re-investing in marketing activation campaigns.

“I don’t anticipate doing a lot of incentives because we have a huge amount of demand for the service already,” Airbnb CEO Brian Chesky told CNBC. “We are never going to spend the amount of money on [demand] marketing as a percentage of revenue as we did before the pandemic [because] our brand’s incredibly strong.”

Not every brand is Airbnb, of course, and it’s far more common for brand marketing spending to get in the crosshairs of budget cutters. The brand-demand mix is fluid for large and small marketing organizations. Other companies will find they need a different balance at different moments within their growth curves and maturity cycles.

External factors also play a role in defining the right balance at the right time. Social issues, including diversity and inclusion and climate change, are leading some companies to deploy brand spending to align with important causes.  Ashley Laporte, director at the communications firm RALLY explained her company’s approach as “Less about cause marketing, and more about helping companies take part in driving systemic change.” Taking positions that consumers support may lead to some increase in demand, but it will be hard to attribute sales directly to, say, thought leadership regarding a company’s commitment to net-zero admissions.

Another CMO in the manufacturing industry said she wanted “credit from business leaders, the board and institutional investors” for effectively positioning the brand relative to these issues, especially since it made the business more attractive to rising generations of workers.  An industry analyst told us, “Brands are being tortured with the cultural and societal unrest that’s out there,” and not just because investments related to these tricky issues are extraordinarily hard to measure.

What’s Love Got to Do With It?

Mastering the brand-demand mix means being flexible and committing to making necessary adjustments over time, like those that take place across the course of loving relationships. One partner’s needs may take precedence during a certain phase of life, but afterward, things rebalance as conditions change. It’s never exactly 50-50 (or 60-40 as in the famous Binet & Field model for budget allocation, which we’ll explore in more detail in a future post). Such a rigid formula may cause opportunities to be missed and doesn’t match the real world, where marketers must continuously adjust based on changing market conditions and business needs.

The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact.
Download today!

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We suggest speaking the “language of love” to business leaders and other stakeholders who struggle to see beyond the numbers in evaluating the merits of brand investments. The key is to connect business objectives to the power and resonance of brand. Marketers that can bring empathy and emotional intelligence to these conversations will be more likely to find supportive partners – and isn’t that what we’re all looking for?

In our next post, we look more closely at proven principles for shaping effective go-to-market strategies – the “vows of the brand-demand marriage.”

Get in touch today if you’d like to learn how to bring brand and demand together to win across the full marketing lifecycle.

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A Guide for New CMOs

For a crash course in what to do first, plan your listening tour and ask the right questions.

Are you in a new role as chief marketer, or perhaps new to your category? This simple guide offers straightforward ideas and insights that can help you succeed.

To start, think about what you need to do in your first 100 days. It is important to consider:

  • Do I need to develop a transformation agenda?
  • Can I create a more compelling go-to-market strategy?
  • How can I make our brand more relevant to customers?
  • Are there foundational tools to put in place, such as a documented customer journey or a marketing plan?

Given the rapid change in marketing and the greater need to prove immediate impact, we help new CMOs flex the most impactful levers including content, data and digital marketing, as well as reimagine their marketing organization for the modern era of growth engine marketing.

Here’s a quick guide of what to ask, what to do and where to look in the first 100 days.

What to Ask

Asking the right questions up front can help craft the right agenda, identify potential initiatives and create an actionable roadmap. Below are six questions you should explore with your team, colleagues, and agency partners.

  1. How relevant is/are your brand(s) to your most important customers and stakeholders? How relentlessly focused on the customer are insights, strategies and tactics?
  2. Is the marketing strategy aligned to the business strategy? What is marketing’s contribution to the enterprise? How do the rest of the C-suite and the board see marketing’s role?
  3. Are brand and demand priorities clear and integrated—or in competition and at odds? Is there a portfolio marketing strategy in place or is the strategy purely product-focused?
  4. How are you going to engage and empower the sales, communications and product teams? Is there a shared end-to-end customer journey? What culture of collaboration exists or doesn’t exist?
  5. What is the maturity level within the marketing organization for key digital capabilities such as customer data, content, personalization and attribution?
  6. Is your marketing team organized in the most efficient way possible and around your business priorities? How might you set up your operating model?

 

What to Do

Here are some recommended actions passed on from other leaders, proven to get you on solid footing and off to a smart start.

1. Schedule your listening tour

Meet with your direct reports and colleagues across the organization, and ask these questions: What do you want me to create? What do you need me to protect? What do you need me to prioritize? Be sure to share back the results and your plan.

2. Create these CMO assets

  • Introduce Yourself Presentation: Prepare a “top 10 list” presentation that addresses these questions: Who are you? Why are you here? What kind of change initiative are you leading? What do you believe about marketing? What do you value? How do you like to work with others? What are your top priorities? What are key milestones for your first six months? What do you expect from your team? What can they expect from you?
  • Vision, Agenda and Roadmap: These are often created in a workshop over a few weeks with a suite of collaborations They should include a description in which the brand can fulfill the business potential, and the springboards, or starting places, that exist now. One key artifact to create is a dashboard to help track progress.
  • Growth Era Marketing Plan: This plan is a modern replacement for the integrated marketing plan and has many of the conventional elements updated for marketing’s new role as a growth engine for the enterprise. Topics include business vision, opportunities, strategies and tactics, customer data strategy, calendar, investment, and key enablers (e.g. content, technology, people, partners).

3. Work in outcomes

Translate your priority initiatives from marketing objectives to business impact. For example:

  • Reducing cost: Investing in a content strategy that leads to search engine optimization will, for the business, reduce the cost of digital marketing that may need to be done.
  • Increasing revenue: Engaging in brand and marketing campaigns that increase customer loyalty can, for the business, increase the share of wallet and customer lifetime value.
  • Improving efficiency: Improving digital experiences can be a reason for a prospective client to work with you, therefore improving the volume of incoming leads, lead quality, conversion rates and retention.
  • Product innovation: Customer insights gleaned from marketing activities and shared with product management can optimize product performance and uncover new opportunities.

Ask your teams to quantify and report their work against broader business impact, not only marketing KPIs. A dashboard that integrates marketing KPIs and business performance can help sustain that conversation and connection.

“When asked business questions (e.g. what have you delivered for the business?), don’t give marketing answers (e.g. NPS).”

Raja Rajamannar, Chief Marketing & Communications Officer, Mastercard

Where to Look

Prophet helps new and tenured CMOs set an agenda and transform their marketing inside and out. Talk to David Novak, Mat Zucker, Marisa Mulvihill and our brand and marketing strategy teams. Here are some additional resources which might be helpful:

Books

  • The Next CMO: A Guide to Marketing Operational Excellence, Peter Mahoney, Scott Todaro and Dan Faulkner (2020)
  • Lies, Damned Lies and Marketing: Separating Fact from Fiction and Drive Growth, Atul Minocha (2021)
  • Chief Marketing Officers at Work, Josh Steimle (2016)
  • CMO Manifesto, John Ellett (2012)
  • Owning Game-Changing Sub-Categories, David Aaker (2020)
  • Creating Signature Stories, David Aaker (2018)

Articles & Speeches

Podcasts

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The Chief Marketing Officer is a C-suite role that can lead, shape, and help deliver uncommon growth for the organization. Marketing is evolving fast, and every leader—new or tenured—needs the mindset and toolset to stay in front.

Reach out to our brand and marketing experts for advice and support on getting started with your agenda.  Have a resource we should mention? Let us know.

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Brand and Demand Marketing: A Love Story

Marketing has always been shaped by shifts in consumer behavior, expectations and technology advancements, as well as its contribution to the enterprise. As the scope and speed of such changes expand and accelerate, it is more difficult for brands to know which types of campaigns and media work best, and the growth to which marketing can contribute.  

They must make hard tradeoffs in deciding where to invest finite resources, how to differentiate amongst competitors and how ambitious they need to be as a growth engine. Are the tradeoffs—and competition between forces—helpful or harmful? 

Today’s marketing industry feels different, according to our recent candid conversations with a dozen senior marketing leaders across industries. Customers are harder to reach and engage, even though we have vastly more data and insights about them and stronger personalization tools. Budgets are tighter and internal stakeholders more demanding. Tried-and-true best practices no longer apply. There’s a sense that rules are being rewritten in real-time. The once useful “marketing funnel” concept seems less relevant given that consumer behavior changes constantly and paths to purchase are increasingly non-linear.  

As a result, many marketing organizations experience significant tension between brand marketing and demand generation – a tension we believe undercuts growth and harms performance. Brand marketing typically describes long-term efforts to drive awareness of and preference for a company, product or service, while demand marketing seeks to get audiences to take action immediately (e.g., click on an offer, sign up for a newsletter).  

“This topic is one of the things that we’ve [been] trying to understand – where in the funnel do we need to spend our dollars in order to really drive business results and drive growth.”

– TD Bank, CMO

As the CMO of a challenger consumer goods brand told us, “Brand is about growing awareness and affinity over time,” while the primary objective for demand, or performance marketing, is “driving short-term conversion.”  

The “either-or” bifurcation of marketing into these categories presents huge challenges as marketers seek to optimize budget allocation, track performance and structure their teams and operations to drive uncommon growth. The worst part, the split between brand and demand generation isn’t aligned with consumers’ consumption patterns in today’s world.  

As a senior industry analyst told us, “Consumers have zero separation between the brand being communicated and their experience. In finding the right investment for brand and demand, it’s both, not versus.”  

Stop the fighting and find the love.

This article, the first in a series, is based on our recent market research with senior marketing executives and focused on the specific internal and external challenges CMOs face today related to brand and demand. These marketers also highlighted the levers they have at their disposal to create effective and integrated brand and demand strategies.  

Every marketing executive we talked to confirmed the importance of finding the right balance between brand and demand. We also heard repeatedly what a difficult balance it is to strike; everyone agrees that brand and demand efforts must be coordinated and synchronized. However, how to do this is much less clear. Despite the interdependence of brand and demand marketing, many tricky questions remain: 

  • How much impact does brand marketing have on conversion?
  • How does customer acquisition efforts influence brand perception?
  • What’s the optimal level of investment across brand and demand?
  • How can brand and demand show up most effectively across channels?

“This topic comes up all the time, in the B2B context, the brand piece is a hard sell because our team doesn’t understand why it’s important.”

– Trane Technologies, SVP of Marketing

In our brand and demand blog series, we explore this important conversation with a modern lens, examining how marketers can embrace the brand-demand love. Specifically, we’ll cover:  

  • The seasons of love: Understand why brand and demand are meant to be together and how they can overcome obstacles to love across the marketing lifecycle – we’re playing a long game 
  • Writing the vows: Set a strong strategic foundation, because every brand-demand marriage needs a rock-solid foundation of what it stands for and how it will approach the market – when to say “I do” and when “I don’t” 
  • Shared finances: Create shared goals and an investment agenda, define smarter metrics for allocating the shared pocketbook, or budget, and track the performance of those shared investments – brand and demand should not fight about money 
  • Setting up the household: Determine how to organize teams and build the right capabilities – brand and demand need a comfortable nest 

The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact.
Download today!

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We think it’s time for brand and demand to stop thinking of themselves as competing interests fighting for the same precious resources. Rather, they must be complementary companions with a shared agenda and intertwined goals. We believe it’s time for brand and demand to fall in love because together, they are the ultimate power couple to build relevance and unlock uncommon growth.   

Get in touch today if you’d like to learn how to bring brand and demand together to unleash the full power of your business.

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Nine Digital Shifts to Sustain B2B Companies During Trying Times Trends in Digital Innovation

Supply chains and alternative channels take on outsized importance.

The biggest challenge for today’s businesses is to consistently produce personalized content at a large scale, deliver it at breakneck speed, and credibly have an impact on revenue. The businesses that are successful in this endeavor have invested in an innovative set of capabilities that make up an “Agile Content System”.

Digital transformation in normal times is usually considered a growth opportunity – and it is.  B2B companies coping with the pandemic are also demonstrating that shifting to digital can provide important benefits in sustaining the business through:

  • Alternative channels for customer engagement – the use of Zoom, Teams, Slack, and other forms of collaboration and meeting apps have skyrocketed
  • Keep parts of the supply chain operating – ecommerce has proven less vulnerable to disruption than call center or face to face channels
  • Lower costs – by using data analysis to uncover and target expense reduction
  • Preserve cash flow through business model redesign – SaaS business models are providing a valuable cash flow buffer in the face of decelerating demand.

These benefits are crucially important in this unsettled period, but they will also be valuable once the crisis recedes. Digital marketing and selling, digital experience innovation and digital operating model renovation stand out as three digital transformation shifts that leaders can use to sustain their business as much as possible during this crisis as well as to accelerate customer demand once the economy rebounds.

Identifying and pursuing quick digital wins that can also elevate future performance has become an immediate imperative for B2B leaders.  The purpose of this article is to provide guidance on where to look and what to prioritize in each of the three transformational shifts. Our recommendations are based on the discussions with B2B leaders and examination of successful cases of B2B digital transformation we conducted for our forthcoming book The Definitive Guide to B2B Digital Transformation

Digital Selling and Marketing:

In such uncertain times, the best customer for most B2B businesses is the customer they already have.  Current customers are much more likely than new prospects to buy, have a lower cost to serve and will be more willing to endure the delays and interruptions their current suppliers encounter.  Using collaboration and virtual meeting tools to enable sales teams and intermediaries to connect with buyers who are working from home is only a first step.  Customers have a need to be connected to a bigger picture about what’s going on in the market, in the supply chain and even in different parts of their own company. They may require frequent updates on even small issues that previously wouldn’t garner their attention but are crucial to keeping their business afloat. And, customers need help to figure out new paths forward and rapidly find alternatives as business conditions change.  There are several use cases to increase the use of digital to focus on existing buyers:

Account-Based Marketing (ABM) has never been more important.  It is a superior way to coordinate the efforts of sales, digital marketing and service to meet the information and relationship needs of the full set of stakeholders, influencers and decision-makers in current accounts.  ABM can be set up in the basic form in a matter of weeks and then can expand and grow. When the economy improves it can take on the added task of improving prospecting and new customer acquisition.

Digital customer insights and analytics become essential when the routine ways of monitoring a category through face-to-face interactions among industry ecosystem participants break down.  Consider opening up an industry “war room” to buyers who can join virtually or receive insights through an email or online feed. Enable the war room with social listening, digital surveys, scouring the internet for news and monitoring key data sources.  Once the current crisis is over the war room can become a source of insights for innovation or a value-added service that can build a competitive advantage.

Direct Ecommerce may be the only way to keep the parts, accessories and supplies flowing that keep customers in business.  For service providers, it may take the form of shifting in-person services to digital channels.  Barriers put up by intermediaries such as agents, distributors, and systems integrators can prevent suppliers from undertaking commerce directly with their customers.  In times of crisis, these barriers will come down; enabling both supplier and customer to sustain a revenue stream while establishing a direct connection that will be very valuable, and hard to turn off, when conditions improve.

Digital Experience Innovation:

Most mid-size and large corporate customers have a built-in divide between the purchasing department and the user of the supplier’s goods and services.  In situations like the pandemic, operations become more siloed and day-to-day connections between the buyer, supplier and user can fray. Users can feel isolated and unserved.  Digital experience innovation plays a valuable role by meeting the needs of the user around the clock with less human intervention from the purchasing team or the supplier. The use cases for user support span the entire customer experience. They include:

Virtual Technical Support can be the lifeblood for corporate users struggling to find new ways of working and encountering new or unexpected bottlenecks as they try to patch together approaches to keep doing their jobs. B2B suppliers should consider ways to open up their expertise online.  Can training guides, specification sheets, and other materials intended for the technical support team be made available to customers online? How about setting up a Virtual Technical Support SWAT team that can swoop in after an initial online meeting and use collaboration tools to solve complicated problems (systems integration challenges, supply chain workarounds, etc.) more quickly than normal? The service may be essential during the pandemic but could save travel and speed problem resolution when times return to normal.  Collecting data on problems and their resolution can later enable AI-driven systems to automate the service in the future.

Online Learning becomes a necessity when there is no readily available source for corporate users to learn how to work with new components, become familiar with a crucial application, or manage a novel service because a supply chain disruption changed their normal routine. Avoid becoming entangled in long lead times to develop a new curriculum by setting up an online listening function to understand what challenges customers are facing. Then, empower sprint teams to create videos and audio-assisted documents to fill the need.  The production flaws will be forgiven in a time when help will be so appreciated.  Later on, the content can improve the larger curriculum and responsive listening can inform technical support and solution innovation.

A Digital Bulletin Board is an excellent and inexpensive way to keep customers informed of what’s going on from a supplier and industry point of view.  It can span multiple topics from immediate steps to mitigate health challenges, to information about shortages or substitute offers to information about how others in the industry are coping with important challenges.  It can be a tool for employees to stay informed as well as customers. At a time when many in an industry are looking inward, it can elevate the presence of the supplier within the customer as a source of information and expertise and provide a platform for continued use once the pandemic has receded.

“Digital marketing and selling, digital experience innovation and digital operating model renovation stand out as three digital transformation shifts that leaders can use to sustain their business as much as possible during this crisis as well as to accelerate customer demand once the economy rebounds.”

Digital Operating Model Renovation:

Many of the world’s companies may be heading for a cash crunch and resource imbalances over the next few months. Now may not be the time for thinking about how the operating model can be redesigned, pursue new customers, or enter new markets.  It is time to consider important, and significant moves to improve the effectiveness and efficiency of the business in ways that will be sustainable for the next few years.

Subscription Revenue Models provide a more sustainable revenue stream in times of uncertainty and in normal times.  They also lower the initial outlay customers must make for important purchases. A shift that can be extremely valuable for cash conserving customers.  There is usually a huge timing hurdle to overcome when converting transactional purchases to subscriptions because large initial revenues must be given up by the supplier in favor of a revenue stream that is spread over months or years.  This period of economic pause may be an ideal time to move to subscription because demand is already depressed, interest rates are low, and investors may be willing to endorse any move that sustains revenue.  The long-term benefits will be substantial, and the normal short-term barriers may be easier to overcome.

Cost to Serve Reconfiguration is a topic, that although very sensitive, cannot be overlooked. In normal times it includes thinking through how automating processes or investing in new digital platforms can reduce labor costs and generate bottom-line savings.  However, this is not the time to install major new systems or make uncertain employees fear for their jobs even more than they already do.  It is the time to collect data, measure, and evaluate whether the new selling, marketing, technical support, online education and digital communication approaches can be optimized and scaled after the crisis has subsided to lower cost to serve, boost employee work-life balance and improve customer service.  Treating the crisis as a series of pilots and experiences requires collecting data and measuring impact. The benefits for ongoing operations can be as profound as the short-term gains these changes produce.

Agile Process Redesign is at the heart of going faster and incorporating customers into the design process for many organizations.  The importance of quickly bringing new solutions to market or rapidly adapting current solutions has been made abundantly clear in the past several weeks.   Most corporate leaders have dramatically stepped up their planning but are struggling to accelerate the pace of the work that actually gets done. This is an ideal time to introduce agile teaming methods to the workforce.  There is no shortage of projects that need rapid attention, the case for change is apparent to employees and these methods can be deployed quickly with fairly low investment.  Agile methods have numerous additional benefits in driving leadership accountability, clarifying project status and ensuring that projects remain customer-focused even when moving rapidly.  The payoff is immediate and the benefits for the organization when things improve are substantial.

By Fred Geyer (Prophet) and Joerg Niessing (INSEAD), authors of the forthcoming book The Definitive Guide to B2B Digital Transformation. 

Watch this video to learn more.

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FINAL THOUGHTS

The nine digital shifts described in this article are a starting point for thinking through moves to make to sustain B2B businesses in an unprecedented time while laying the groundwork for future success when this crisis recedes.  We have tried to be pragmatic by recommending moves that can be implemented in the short term and will be valuable to customers, employees and the business for the future. This is not the time to wait.  Leaders who act now can strengthen their options and improve their chances for success.

If you need help figuring out what path to take now, in the next 6-8 months, or beyond, please don’t hesitate to reach out. We’re happy to have a conversation. Also, if you have any questions you’d like answered by our experts, drop them into the comments below or reach out directly here.

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