The Chicken or the Egg Dilemma in B2B Marketing

When it comes to B2B marketing, it is hard to say which comes first – building brand awareness or generating leads for sales? Sometimes a young business with limited fame can make great sales, while a well-known brand fails to generate leads or vice versa. Since we do not exactly know the order of precedence at this point, it may be better to employ both brand awareness and lead generation to reach the desired result. But how will a B2B IT company know what to invest in brand building and what to spare for lead generation? It is all about balance!

Let’s talk about the chicken or the egg problem - also known as the chicken or the egg causality dilemma. With Greek-Roman philosopher Plutharch as the first known initiator of the dilemma, the question still stands: Since every chicken hatches from an egg and every egg is laid by a chicken, which comes first? Or to put it more appropriately, which is the cause, and which is the effect? When it comes to brand awareness and lead generation in B2B, we can ask the same question as well. Obviously brand recognition fuels lead generation, but lead generation can fuel brand awareness, too. Let’s take a closer look at the relationship between these two.

What Is Brand Awareness?

Brand awareness, which is a special term for the recognition of the brand, is (or must be) a priority for marketing teams. For instance, if a relatively young IT company is not known by its name among the target audience, it means there is a lack of awareness. And this lack of awareness means whenever a business needs an IT product or solution, this young company will not be in the list of those that immediately come to mind. Plus, some brands are so well-positioned in the market that we can go beyond brand awareness and talk about “fame”. These are brands that are perceived as identical to the product or solution itself. Just like calling every ice pop a Popsicle, which is actually a brand. In short, you can consider brand awareness as the “chicken” in the dilemma.

What Is Lead Generation?

Lead generation is the first step of sales. It is all about acquiring leads and converting them into actual buyers. Once a company identifies ideal customers for its products or services, it is easier to reach them with the right message and offerings. However, it is not always easy to generate leads, especially in B2B marketing for the IT industry. Sometimes, the greater brand awareness is, the more chances of generating leads are. And on the other hand, the more leads you generate, the greater brand awareness you achieve. Chicken or eggs?

Brand Awareness Is Not Enough

Investing highly in the brand may be a great start for a new B2C business. However, the same does not apply to a B2B company. Of course, a brand needs to be known and recognized to be able to succeed. However, especially in the IT industry, we see new companies selling their products or solutions without investing much in the brand, especially thanks to good references and word-of-mouth marketing. Yet, we know that every fairytale ends eventually. When the sales of such a business reach a level of maturity, it may be too late to launch an awareness campaign.

This means that awareness is a must, but not a goal, simply because it is a long path to walk, and it is not always enough on its own. As suggested in The B2B Institute’s report “Five Principles of Growth in B2B Marketing: Empirical Observations on Advertising Effectiveness” by Les Binet and Peter Field, a brand may have 100 percent awareness, but when it comes to purchasing, if only 5 percent considers your brand, this is neither enough nor good. And to become a “famous” brand that immediately comes to mind, you must avoid being another brick in the wall. This also means increasing your “share of voice”, which is all about increasing your advertising expenditure. But how much of an increase are we talking about?

Balancing Marketing Budgets

Since we are not exactly sure about which comes first (brand awareness or lead generation), balancing the budget allocated to advertising & awareness and sales activities seems to be a good idea. Obviously, building and reinforcing a brand is a long-term process that also requires long-term investments. This is especially true for B2B companies in the IT industry. However, there is no need to wait until brand is fortified to launch sales operations, which are naturally relatively short-term.

According to The B2B Institute’s report, budgets for brand awareness and sales activation should be more or less similar. We may give a ratio of 50/50 to talk in broader terms, but to speak in more exact figures, the report suggests 46 percent of the budget to be allocated to brand and 56 percent to sales activities.

Things to Remember

Obviously, this article does not intend to offer a solution to the chicken and the egg dilemma. However, it is certain that brand awareness and sales activation should work hand in hand for financial success and reinforcing the reputation of a B2B business.

While doing that, there are some critical things to remember:

  • B2B does not need to be dull – do not hesitate to add creativity in your marketing processes.
  • Even in B2B sale processes, the decision-maker is a person, not the procedure – benefit from the power of emotional messages for a long-term reputation and loyalty.
  • Use more rational messages only when you need short-term results in sales.
  • Most importantly, whether you are trying to build brand awareness or trying to sell a product or solution, never underestimate the power of good content and timing.

After all, we need both chickens and eggs, and it is all about taking the right steps at the right time towards the right target.

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