Scientific Laws of Marketing
Marketing is considered either a creative practice driven by intuition and creativity or running a lot of ads. Predictive and prescriptive marketing laws are still unheard of and as a consequence marketers often waste the money of the companies that employ them. But what if marketing could be approached as a scientific discipline? Welcome to How to Win with me, Pev Plam, a deep dive into studying winners in B2B SaaS to determine how much is How much is luck? How do you win? While it's debatable how generalizable and deterministic can marketing principles be, Professor Byron Sharpe and his team at the Ehrenberg Bass Institute of Marketing Science think that marketing works according to certain laws that don't change like the laws of physics.
In fact, their empirical work has shredded several unfounded beliefs in marketing. That's why Sharpe's How Brands Grow is regarded as one of the most important marketing books ever. This is not to say this is the ultimate truth.
Byron Sharpe has drawn criticism from prominent marketing practitioners and academics. Common critique involves overstating the implications of their research or dismissing conflicting research on shaky grounds, underplaying deviations in their data set, ridiculing other researchers, conflict of interest, bias towards traditional mass market media, and holding rigid binary views like degrees of attention and brand perceptions don't affect consumer behavior, or that segmentation and differentiation are mostly ineffective, and so on. In this episode, I focus on a few key ideas from the works of the Ehrenberg Bass Institute that I also firmly believe in.
The two most important concepts that Byron Sharpe and the Ehrenberg Bass Institute advocate are building mental availability and ensuring physical availability. I think every single marketing strategy should specifically spell those things out. What are we exactly doing for mental availability? What are we doing for physical availability? The sale starts long before the buyer moves into the market for their needs.
People can't buy what they don't know about, nor can they buy what they can't find, and this underpins the concept of mental and physical availability. Easy to mind and easy to find. This aligns with the B2B buying research by Bain and Google, which found that 90% of B2B people end up choosing a vendor on their short list at the very beginning of their sales process.
Our own research by Winter, looking into how B2B SaaS marketing executives buy software, showed that more than half of them go to a specific vendor when looking for a new tool. Which ones? The ones top of mind, and that's what mental availability is, being thought of by category buyers in buying situations. Google is not the first place buyers go to look for answers.
It's their own memories. Mental availability is how readily you come to your customers' minds in buying situations, and buying situations serve as category entry points for category buyers to access relevant memories. So brands with more mental availability are easier to recall than brands with less mental availability.
At the very basic level, building mental availability is about running ads, producing and distributing content, podcasts, and so on. So it's about getting in front of your target buyers at a consistent basis. And the word consistent is key here.
It's much better to have a steady flow of ads and content rather than a few spikes. Take your annual ad budget, divide by 365, and spend that every day. Think of brand advertising as insurance.
If you turn it off, nothing bad happens today. 95% of buyers are not in the market today. But what brand advertising does is it serves to build up mental availability.
So when the time comes to buy or recommend, they think of you. But what is brand advertising and what is brand building? Here's Paul Dorsey, the CMO of Miro, to explain. When we think about brand building, we're really speaking to that, you know, next billion plus people.
You know, brand building is, you know, emotional priming to make people more likely to self-adopt. You know, we very rarely buy things that we don't know. And so the job of brand building is to communicate with a really large audience so that people know about us, they think about us.
And the communications job is relatively simple. You know, when we think about brand building, what we're trying to do is communicate some very basic things. You know, what is this thing? It's a whiteboard.
What is it called? Miro. When should you use it? When you're collaborating with other people, what does it look like? And to do that in a way that helps people think of us at the moment that they have a problem. And that may happen, you know, a month from now, a year from now, or a couple of years from now, but it's how we speak to that billion plus, you know, people who aren't users and aren't the near-term users that we're targeting with direct response.
While brand awareness is important by itself, if your brand is not cued to buying triggers in your customers' minds, they won't be able to recall you when their search starts. So mental availability is not just about awareness. It's about the association of your brand with what triggers your customers to buy.
As an example of a buying trigger, whenever a company redesigns their website or redoes their messaging, they're wondering how the launch will go, I want them to think about winter and message testing in that situation. And thus, launching a website is a category entry point for winter. This is the very reason our ads say this.
I'm Pep Lea, CEO of Winter. I'm Rachel Lambert, co-founder of Oliveine. I'm Ariel Schneidman, director of product marketing at Oliveine.
Your messaging is more than 80% of the conversion rate. Messaging is a foundation to your entire marketing strategy. It impacts landing pages, sales decks, content marketing, ads, everything.
It's both an art and a science. And this course is going to teach you the science so that you can master the art. It's not about some new marketing spend or a new channel.
It's about getting more out of the people already hitting your website. This messaging course will help you get it right. Another example would be HockeyStack.
They use always-on content marketing to stay top of mind. All their leaders, including the CEO and the CRO, regularly share their learnings and insights on LinkedIn. They make rap tracks about how HockeyStack works.
Damn, that's awesome, bro. Super happy for you, dude. Thanks, man.
So like, what about you? What do you do now? I work at HockeyStack. What's that? An attribution tool. Okay.
Some things are hard to track. All right. So teams just pull the plug.
No way. Yeah, they spend money in the wrong places. They don't grow them where long faces.
Sounds pretty weird. Just ignoring basics. So why don't they stop? Well, their boss makes them.
That's wild. So what does this have to do with my job? Yeah, you said attribution. Well, the company I work for makes a product that provides them with a pretty bad solution.
Oh, wow. Yeah, it's pretty wild, bro. Team with pretty wild goals.
You just paste the script in your site pages. Then whatever you do, I'll know. See, that's cool and all, but I don't get it.
How does this help you out with what you're spending? How does this help me learn how they end it? Up as a customer from the beginning. Okay. They regularly publish original research based on the huge amounts of proprietary data they crunch.
They've set up an academy to learn about HockeyStack, marketing, how they come together. They produce a show called Can You Dashboard It? Where they literally show how easy it is to produce dashboards with HockeyStack. Despite being a relatively new company in a highly saturated field, B2B people heed that HockeyStack has something to do with marketing attribution and analytics.
So whenever they move in-market, they will think of them. Building high mental availability requires repeated exposure to your brand, media, messaging. This requires strengthening the buyer's mental structures over time.
The end goal is to be salient enough to make your customers' consideration as soon as they move in-market. So it's about getting repeatedly in front of your target customers with something and then staying top of mind through regular newsletters, social content, events, retargeting ads, and so on. And you need to engineer more triggers to remind people that they need whatever you're selling.
And if the person exposed to your stuff is not in-market, their friend might be. Hotspot gets 33% of their customers from word of mouth and their revenue is in the billions. Yes, product innovation matters, but really it's a play on mental availability.
When your tool does something truly innovative, people will talk about it and you will get mental availability. When Jasper launched, it was the first and only tool to write blog posts and such with AI. This was before JAT GPT was open to the public.
Jasper seemed like magic. They went from zero to 60 million ARR in a matter of months. And of course, innovation rarely lasts in competitive markets.
There are now many tens of LLMs with GPT 3.5 capabilities or better. And there are so many AI copywriting tools. This space got commoditized real fast.
But Jasper continues to have mental availability. It's at the top of consideration sets because of the massive PR they got. The other piece that goes hand in hand with mental availability is physical availability, which is about being easy to find.
Because if they can't find you in buying situations, it doesn't matter how mentally available you are. And for B2B SaaS, there are no supermarkets. So hence you need to be highly visible for your category keywords on review sites like G2, Trust Radios, and also search engines obviously like Google.
Hotspot still gets 26% or so of its customers from SEL. In fact, a winter study of B2B SaaS executives found that 54% of them start looking for products with a Google search or a category search on review sites like G2. Brands that show up on top get an obvious advantage.
Try putting yourself in a category buyer's shoes. Let's assume they're not aware of you. They're doing research on your category.
How much effort do they need to put in to find you? Now pull out your marketing strategy document, assuming you have one. Are mental availability and physical availability spelled out as things to focus on? I think it's very helpful to discuss both things in these precise terms. And there's another piece to this puzzle.
When they do come across you finally, how do you show up? Let's talk about distinctive brand assets. Listen to this actual ad being run on YouTube. Get started for free.
Okay. So which CRM was being advertised here? Was there anything distinct about this ad that would give you hints about who the advertiser was? The message was very generic with zero differentiation. And also there was nothing distinct about it.
What is the difference between differentiation and distinction? Here's Mark Ritson to explain. It comes down to very simple things. Distinctiveness has got really nothing to do with competition.
It's really about that dyad between the brand and the consumer. It's about making your brand easily identified by customers. And I love that phrase from Professor Byron Sharp, brands that looks like themselves.
And it doesn't make any sense unless you understand marketing and brands from a proper market-oriented point of view. But a lot of brands don't look like themselves and lose a lot of sales because of it. And of course, our brand easily identified the customers.
Because we look like ourselves, because we use distinctive assets, we are going to come to mind in buying situations with more certainty and more likeliness. And as a result, we're going to sell more. Most people can recognize Netflix by its intro sound.
Geico by the gecko. I'll tell you why. Because people trust advertising icons.
Some bloke tells you to go to geico.com and you're like, really? Just who might you be? But a gecko, he can be trusted. MailChimp by its, well, chimp. Professor Jenny Romanyuk from the Ehrenberg BAS concludes that distinctive brand assets like these are key to bolstering brands' mental and physical recall ability.
An emphasis on distinctiveness means less trying to find a unique selling proposition, which is extremely hard, while extremely important. And it's more about trying to find unique identifying characteristics. Your distinct branding is what enables buyers to notice you, recognize you, and remember you.
It reduces the need for consumers to think, scour, and search, making their life easier without them even realizing it. All of this is very important for mental availability. So distinct assets make it easier for buyers to recall and identify a brand in buying situations.
This is exactly what we want. This claim is backed by a counter study, which found that brands with strong brand assets to be 52% more salient than their competitors. Similarly, based on an analysis of 2000 video ads, Ipsos found that high-performing creative showed distinctive assets 34% more than its counterparts.
There was another global survey of 26,000 people done by Ipsos and JKR, and they analyzed the distinctiveness of some 5,000 brand assets. What they concluded was that only 15% of the assets tested were discovered to be truly distinctive. Distinctive brand assets are unique brand cues created by marketing.
You know, those are like logos, typography, color, sounds. And of course, not all brands' assets can be equally distinct. For instance, color is a poor distinctive asset.
You know, when I studied winter, we picked yellow color to be our main color. Why? Because at the time, no other B2B SaaS brand was yellow in their visuals. We thought we would stand out.
We will use a color that nobody else uses. But within a couple of years, an army of yellow SaaS websites popped up. I'd like to think they copied us, but probably not.
Probably it was more like a zeitgeist thing, something in the water. Don't bet on color alone. Another example of a distinct brand asset would be a tagline.
Geico, 15 minutes could save you 15% or more on car insurance. The best options are characters or mascots, logo, and unique typography. You know, everybody has a logo, but I'm not seeing a lot of B2B SaaS use the other stuff like unique typography or mascots.
Ahrefs is doing a solid job with a unique font, truly distinct. Mutiny has a mascot, a raccoon, but I don't see them leaning into it too much. But Salesforce does.
Astro, their brand mascot, was originally designed for T-shirts that Salesforce distributed to developers participating in its Developer Week conference. Their customers liked it and started to wear Astro pins on their sweaters and backpacks. Identifying this opportunity, Salesforce adopted Astro everywhere, their website, ads, conferences, headquarters, merchandise, and so on.
Colin Fleming, EVP of Global Brand Marketing at Salesforce, attributes this to be the primary reason behind their 26% increase in unaided brand awareness and 40% increase in brand attribution. In a world where most B2B brands conform to boring norms, it's telling that the world's biggest B2B SaaS company leads the way with a cartoonish brand mascot. Here's Colin Fleming explaining the rationale behind it.
When we started selling to the large organizations, we started being more of an enterprise-focused company. We started to become those enterprise focused companies. We lost the personality.
We lost the spirit. We started to look like every other company. There was a, I remember a reckoning very vividly actually inside the company where we just kind of looked at ourselves and were like, you could put any B2B company's logo on that presentation or whatever it was and it would hold up.
And that was a moment in time for us where like, we have to rethink this. And so we kind of channeled ourselves and I was fortunate to enter the creative team at that point in time. And the brief to me was bring back our soul.
And you couldn't bring back what it was in 1999 cause the world has moved on and things like this. And so we sort of turned to our community actually. And we have a very robust community that has created this kind of environment that we find ourselves in.
We call Trailhead, incredible character set. We call Astro and friends, Astro being our main character, mascot if you will. And it's just been amazing to see the journey that we've been on with there from a, well, why the hell are they doing that? To now seeing study from, you know, LinkedIn B2B Institute and saying that these distinctive assets are immensely valuable.
And, you know, a great example of this is like, what does the Geico gecko have anything to do with insurance? It doesn't, it creates an association. It creates a playfulness. SurveyMonkey knows something about losing distinctiveness.
They assumed that their simple, distinctive and fun brand name and logo were not suitable for enterprise buyers. Despite finding the popularity of their name to be on par with Salesforce amongst category buyers, they came to the conclusion that their branding doesn't align with the enterprise software category. While their enterprise revenue had grown by 65% from 66 mil to 107 mil in the last fiscal year, SurveyMonkey still chose to rebrand its enterprise business to Momentive back in 2021.
They also changed the green monkey head logo to a much more abstract using only three different colors. Even if there was merit to this change, they likely underestimate the resources it would have taken to get Momentive's brand equity to SurveyMonkey's level. CEO Eric Johnson recognized that SurveyMonkey's brand was synonymous with helping customers gather insights and scrapped the Momentive rebrand by 2023.
They have now simply sub-branded their enterprise offering as SurveyMonkey Enterprise. Unsurprisingly, most B2B SaaS companies fail at creating distinctive brand assets. A LinkedIn study of 300 brand assets from 59 B2B brands across categories like CRM and business intelligence found that most B2B companies lack distinctive brand assets, which costs them billions of dollars in potential sales every year.
Now what does that mean for you? Well, you should invest in building a distinctive brand identity and stick to it once it's reasonably established, because the strength of brand assets is tied to the period of time they've been in use. Byron Sharpe goes as far as implying that brands should strive for meaningless distinctiveness rather than meaningful differentiation. His point is not that differentiation does not matter, but rather that it's very difficult to achieve.
Prioritizing and emphasizing attributes that customers care about makes brand awareness more effective if it results in meaningful relative differentiation from the competition. So if you want more differentiation, step one is identifying what your customers find valuable and relevant enough to justify buying from you. It used to be pretty tricky and time-consuming to figure it out, but thankfully winter makes it easy to tap into a target market and determine what your customers really care about.
All right, so we gotta be consistently noticed by our target customers and look distinct. But where exactly, what channel should we use? Rule number one of the seven marketing rules as defined by Byron Sharpe in How Brands Grow is continuously reach all buyers in a category. Yes, also in B2B.
Research by Peter Weinberg and John Lombardo, formerly at the LinkedIn B2B Institute, found that in B2B marketing, narrow hyper-targeting is far less effective than broad targeting. 95% of the market is not ready to buy now. And according to LinkedIn's own data, every four years around 40% of LinkedIn members change their industry, seniority, function, and company size.
The authors conclude that the best way to catch a moving target is to cast a wide net across many seniorities, functions, and industries. Hyper-targeting ignores future buying networks, which imperils future cash flows. Hyper-targeting wrongly assumes that a single B2B decision maker is the only valuable audience.
There are so many stakeholders. Buying committees are expanding. And who shortlist vendors? Usually it's a bottom-up movement.
The individual contributor-level folks can and do recommend tools to look into. Hyper-targeting almost always increases media costs. The cost per click and CPMs are much higher for hyper-targeted segments than it is for broadly targeted segments.
Hyper-targeting almost always increases media costs. Cost per click and CPMs are much higher for hyper-targeting segments than it is for broadly targeted segments. The solution is to focus on what the authors call category reach.
You need to reach all potential buyers of a category, anyone who could buy from you today and in the future, and non-buying audiences that might work with you in other ways. The benefits of reach make intuitive sense as well. The more target customers you reach out to, the faster you're likely to grow by capturing more in-market buyers, nudging more non-buyers, and building availability amongst more future buyers.
In fact, focusing on reach, not frequency, is the most efficient way to drive leads in performance marketing, as the first ad impression drives a much greater sales response than each subsequent ad impression. John Lombardo shares his insider knowledge of how retargeting works for LinkedIn ads. We have quite a bit of small company business, it's actually the biggest part of our business, is they don't reach enough people even given their budget.
So they'll generally choose a tightly targeted campaign with high frequency, when in fact, the data I've seen would say that if you had broader targeting with one frequency or really reach, you'd get better results. In fact, the correlation between leads and reach is most strong if you look at our data. And so what that actually says is, I think the narrative around lead gen is I'll target very narrow people with a lot of frequency, but the data says you should do the opposite if you want leads.
You actually want broader targeting within reason, of course, for a small company, but broader targeting within reason is likely to get you your leads. And I think if you ultimately pair that broader targeting, even within lead gen, with slightly broad targeting for brand building, the Benetton field idea of 60-40, or what we call people who haven't seen it as a cold member or a cold lead, and then people have messages of warm lead, that combination, ultimately, I've seen in our data, big or small, produces the best outcomes. However, remember, you can't have a high ad reach without having high ad frequency.
Restricting ad frequency restricts ad reach. So the reach versus frequency debate is a false dichotomy, at least on LinkedIn. Dale Harrison researched how many ad impressions does it take to reach your target audience? A whole lot more than you can possibly imagine.
Generally, 10 next to 30x more ad impressions than the size of your ad target group. So you would need about 100,000 impressions before everyone in your target group has seen the ad at least once. Some people will have seen the ad 550 times, many will have seen it several dozen times before the last person in the target groups has seen it for the first time.
And there's more to consider, like the duplication of purchase law. The duplication of purchase law dictates that brands share and acquire customers from all other brands proportional to their market share. This means your main competitors will typically be the biggest brands in your category, irrespective of their niche or positioning.
Small brands, even if identical to yours, will typically be minor competitors with a limited impact on your bottom line compared to bigger brands. For instance, even if ConvertKit is positioned as an email marketing tool for creators, many more creators end up using MailChimp than ConvertKit, just by its virtue of being an email marketing category leader. The point is that markets are much more heterogeneous than brands make them out to be.
And it's easy to mistake that ConvertKit competes with its lookalikes and clones when it's actually competing with much bigger brands that also cover its target market. Now, as acquiring new customers is essential, and those customers come from all brands in a category, regardless of their positioning, the cumulative interpretation of the double jeopardy law and the duplication of purchase law implies that targeting all category buyers is the most efficient way to grow. And that narrow targeting is counterproductive for B2B growth.
In conclusion, mental availability is the name of the game. So, do something every week to increase awareness that you exist. Two, do something every week to educate people about your use cases.
Three, the point is to invest in making every target customer remember your brand next time they need its product. Put out content and ads that explain what is your brand and when and what do you use it for. Finally, repeat yourself a lot.
Thanks for tuning in to How To Win, where in each episode, I unpack one aspect of winning in B2B SaaS. All your feedback is much appreciated. For more insights and opinions, follow me on LinkedIn or Twitter.
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