When Les Binet, one of the leading minds in marketing effectiveness, joined us at our Marketing Summit, his brilliant keynote cut through some of the myths of B2B marketing and sent a clear message to all the marketing leaders in the room.
Binet made it crystal-clear that marketing effectiveness is not about quick wins or quarterly returns, rather it is a long game. One that is built on fundamental principles of balancing brand-building and sales promotion, broadening market reach, building mental availability, staying memorable, and using the power of emotion to create buyer-appeal.
Binet showed the empirical proof that brand is in fact a vital financial investment, integral to a successful long-term growth strategy. So, while sales campaigns demonstrate an immediate and visible uplift in revenue, brand advertising, according to the evidence of hundreds of studies, raises the base level of sales for much longer and increases margins over time.
Les Binet and Peter Field’s acclaimed research and analysis of over 2,000 detailed campaigns showed that brand accounts for over 60% of sales, compared to 40% from short term sales campaigns. But Binet also explains that you need a balance between sales activation and brand building “because each enhances the other”.
Binet also highlighted what he sees as the vital key metric to focus on- the ratio of advertising to sales spend:
“You need to keep your advertising to sales ratio up or you won’t grow. The more you invest, the more you sell…and actually it’s worse than that because how much you need to spend also depends on what the competitors spend. It’s an arms race.”
So, for B2B insurance businesses, the message is clear; a strategy focused solely on sales activation will lead to diminishing returns over time. Strategic brand investment conversely will create long-term value through the building of familiarity, trust, and mental availability…with the natural conclusion that when customers (or brokers) come to market, they will think of you first.
Within B2B insurance, brand building has historically been treated as a secondary concern, a ‘logo development exercise’ not connected to the long-term strategy of the business. But the game Is changing and according to Gracechurch, brand spend in the specialty insurance segment is increasing as Marketing grows in stature and Boards cotton on to the value of focusing on the ‘Long and the Short of It’.
Binet also cited recent research highlighting the positive correlation between advertising and stock prices, proving that investors get it too, something that listed insurance businesses should also take note of.
In the end the evidence unequivocally shows that Brand can turn insurance from a low margin commodity into a high(er) margin preference…and thankfully it seems, the penny is dropping.