Conversion-oriented marketing has its obvious draws. Near-term sales translate to immediate ROI—something marketers are facing increasing pressure to secure amid the ever-shortening CMO tenures and tightening corporate budgets. Especially during the pandemic, many brands slammed the brakes on upper-funnel tactics in favor of conversion-oriented campaigns to cut spending and keep business afloat. However, if brands continue down this path, they risk shortchanging future growth and limit their ability to preserve their businesses over time.
True, sales do keep a brand in business, but only nurturing a brands’ existing customer base won’t generate enough sales to meet most long-term growth goals. Instead, marketers need to simultaneously execute campaigns that engage both existing customers through lower-funnel tactics and new prospects through brand awareness initiatives to create a pipeline for future sales. Even the most recognizable brands still need to execute upper-funnel tactics, since awareness decays and since a consumer can’t engage with a company if it’s not top of mind the moment they are ready to make a purchase.
Marketers need to address brand growth through a balanced marketing strategy that accounts for every part of the funnel. Here’s how:
Take customers from the awareness phase to the finish line
Nielsen research found that a 1-point gain in brand metrics (e.g., awareness, which the Ehrenberg-Bass Institute argues is the best way to attract new customers, and consideration) drives a 1% increase in sales. In short, more awareness and consideration mean more potential customers, and ideally, more sales. To this end, the relationship between awareness and activation marketing strategies needs to be balanced. But this doesn’t mean the two have to be separate from one another. In fact, marketing efforts to acquire new customers offer the added benefit of making lower-level activations more fruitful. New customer acquisition efforts pull more potential purchasers into the funnel, which means lower funnel activations will be applied to a larger group of individuals. Proving this point, in a recent study of a financial services brand measured in about 20 markets, Nielsen found that the correlation between the market-level brand health and market-level marketing efficiency was exceptionally strong.
Some brands may argue that their current focus is maintenance over growth (e.g., in response to the financial strains of the pandemic), but even customers who had a great experience with a company need reminders to return. Brand equity efforts work beyond enticing prospects to prevent loyalty erosion, keeping the brand top of mind for past customers who need a nudge to come back.
The right message and channel mix is critical for growth
Brands need to be aware of the broad influences their customers are facing in the world in order to understand how their product or service solves for those challenges. For example, whereas 90% of Americans expressed being more favorable towards companies that were helping consumers during the pandemic, many are now more focused on getting back to normal life. Marketers need to not only keep a pulse on the state of the industry, but the state of the news cycle and world and how customers are reacting to it.
While brands determine their target audiences based on demographic information and shared values, no audience will be monolithic. Individuals who have just heard of a brand won’t respond to the same calls to action as those with a history with the company. As such, marketers need to mix up the messaging they use in order to grow their different customer groups in tandem.
Messaging also needs to be presented through the right channel(s) to make a strong impact, but the channels that are effective for driving sales are not always the same ones that are effective at driving awareness. Two recent cases studies by Nielsen found that video and offline channels are well suited for the awareness stage of the funnel, as these can be positioned in front of those unfamiliar with the brand and direct consumers towards more interactive channels. Likewise, lower-funnel messaging works better with non-video and online media since, in today’s ever-online world, the distance between seeing brand messaging and acting on it to make a transaction is often only a few clicks away.
Zero in on the balance for your brand using detailed measurements
In its latest Annual Marketing Report, Nielsen surveyed hundreds of marketers across industries about which measurement capability they found to be most important. Overwhelmingly, they named brand awareness measurements. And yet, brands repeatedly underutilize this metric and instead focus heavily on short-term sales as reflective of their influence.
Just as conversion-oriented marketing shouldn’t be brands’ sole priority, sales shouldn’t be the only metric used to gauge marketers’ efficacy. Brands need to be able to see the long-term effects of brand-building and awareness efforts in quantifiable terms so that they can pinpoint where their efforts are succeeding—and where they need to be improved.
Moreover, because they lead to different goals, lower- and upper-funnel activations should be assessed separately. That’s because upper-funnel messages will likely boost brand metrics, whereas lower-funnel messages will likely boost sales, and combining the two into a single metric can depress the aggregate lift of both. Assessing these metrics independently of one another demonstrates more visible lifts in each one’s intended outcomes.
Brands can’t mistake the value in cultivating loyal customers who return to their businesses time and time again—but the focus on them shouldn’t outrank time and spend dedicated to the rest of the funnel. The quick wins of conversion-oriented marketing may feel rewarding in the moment, but unless they are balanced with brand and growth marketing tactics, they could find themselves on a slippery slope toward contraction.