Brand Building vs Sales Activation

Your potential customers are either actively looking for a product/solution like the one you offer… or they are not.

Ty Heath of The B2B Institute says that for most businesses, at any given time, only around 5% of their potential customers are “in market” for what they offer.

This means that 95% of your potential customers are not currently looking for what you offer, but someday they might be.

One very common type of marketing – Sales Activation – attempts to gain the consumer’s awareness right as they are ready to buy. Sales Activation often uses special promotions, coupons, or product updates to elicit an immediate response from potential customers. For example, as the summer swim season approaches, you run an ad for “buy-one, get-one” swimsuits. Your ad attracts people already in the market for new swimwear, and they end up purchasing from you because of your ad.

Sales Activation primarily targets the 5% of your prospects who are already actively looking.

This type of marketing is important, and Google knows it. But just like the last-minute Christmas shoppers pay the highest price… so it is with Sales Activation. Typically, the customers you gain via promotions and coupons are the most expensive ones to gain and the most difficult ones to retain.

Please don’t hear this as an admonition against Sales Activation strategies and tools like Google Ads, because this type of marketing certainly has value and can be a very effective tool for quick growth. In fact, I typically recommend investing around 40% of your marketing budget on Sales Activation.

Of even greater importance to your business’s long-term growth, though, is Brand Building.

Brand Building will help reach the other 95% of customers who could be interested in your business at some point, though not at this moment. Brand building is about resonating with your prospects on an emotional level and establishing your business as the “best” in their minds long before they need you. This way, when they enter the market needing what you offer, they think of you first.

If you are a service-based business, this is especially important. Take the home services industry as an example. The typical household hires an HVAC tech once every 1-2 years, a plumber once every 3-4 years, and an electrician once every 9 years. If your company is not front-of-mind for these prospects when their need arises, you will likely miss out on their business.

While brand-building results are more difficult to measure than Sales Activation results, they can be immensely effective for long-term business growth.

When done well, Brand Building Marketing:

Is Memorable. Your brand leaves an impression on people and sticks with them. When a need arises for what you offer, they think of you first.
Invokes Loyalty. Your brand connects with your prospects on an emotional level. They feel connected to what you do/offer and why you do it. They like the way doing business with your company makes them feel about themselves. According to a study by CRS specialist Cone, 66% of Americans would switch from a product they typically buy to a new product from a purpose-driven company they align with.
Attains Virality. Brand Building helps your company appeal not only to your potential customers but to those people connected with your potential customers. Most people have a natural inclination to help others and to come across as if they know things. If these people believe in your brand, they can become vital tools for organic marketing. For example, a 40-year-old man hears a radio ad for a Financial Service firm. The ad establishes trust and the firm’s brand resonates with him on a personal level. When his 70-year-old mother is looking for financial guidance in her twilight years, he recommends this firm to her despite having never worked with them himself.
Creates long-term gains. Your clients who choose to do business with you because they connect with your brand typically have a higher lifetime value (LTV) for your business and better retention rates. Brand building leads to maximum long-term growth for any company.

If you are not investing in Brand Building Marketing yet, I hope you will start right away. I typically recommend clients invest around 60% of their marketing budget on brand building. And if you find yourself with no idea how to build your brand, my team of marketing wizards excels in this area!