Building a B2B SaaS Brand: How to Get CFO Buy-In

As a head of marketing, you recognize the critical role that branding plays in the growth of a B2B SaaS company. However, persuading your CFO and other board members to invest in the brand can be challenging.

Here’s my take on why this is so challenging and my approach to getting it approved:

Common Biases

• Peak of “Mountain Stupid” - Marketing doesn’t have significant barriers to entry. From the outside, it might seem easy. As the Dunning-Kruger effect shows, the highest confidence is when you know almost nothing.
• Postponed Sales Effect - Sales impact is based on market dynamics, purchase cycles, and frequency. Unlike in B2C, good brand campaigns don’t really generate quick short-term revenue. Expectations need to be adjusted.
• Underestimated Importance - Branding is often seen as a “nice to have.” There’s a hope that growth can be achieved purely with performance channels, which inevitably leads to a performance plateau.
• Performance-Oriented Measurement - Online performance channels have taught us to think in Google Analytics attribution models. But for brand you can't use the same approach.
• ROI Obsession - Larger investments with lower returns can drive greater overall growth. For example, investing $500 with a 5x return vs. investing $5,000 with a 3x return. Brand investment is a long-term game that can scale without diminishing returns like performance campaigns do. (check more studies)
• Familiarity Breeds Contempt - When an external consultant says the same thing as the internal team, the CEO tends to take the advice more seriously from the external person.

What Not to Do

Many CFOs treat branding as something esoteric. When you mention “brand growth,” they don’t know what you’re talking about. For CFOs, any expenditure is viewed as a cost. Our task is to show them that brand campaigns is a cost that generates future cash flow.

What to Do

The Marketing Laws

Start by dismissing misconceptions and show them why branding is important.

• 80-90% of B2B buyers already have a mental shortlist of brands when considering a vendor. Most choose from this shortlist, so we only get a chance with about 30% of the market. (Bain & Co.)
• With increasing spend in paid search and other performance channels, each extra dollar generates less revenue. We get closer to a performance plateau. Higher mental availability makes us relevant to more buyers and improves even the performance campaigns.
• People perceive brands and products as interchangeable. They don’t choose the best one; they choose the products they know – what comes easily to mind. This is why we need to build mental availability.
• Price affects profit more than growth. Discounts merely nudge people who already know us or are considering us. The effect on new users is much weaker. Mental availability has a greater effect on growth than discounting.

Involve Them

Positioning and messaging exercises need to be done before you pick the one association your product should be thought of with. Learn more how to select it and how to validate it.

Incorporate It into Performance Campaigns

First, we need to know what resonates and matters to prospects. Use performance campaigns to answer these questions. Note that this is still not a brand campaign. To improve awareness, use different media, formats, and especially creative content. For more on this, read Les Binet on brand performance.

Budget for Experiments

Luckily, B2B SaaS is used to testing things, so devote 5% to 10% of the budget to experiments to find new ways to grow.

For example, if you generate $5M ARR and the marketing budget is roughly 10% of revenue, you have ～$35k for experiments annually. This isn’t much, but it can provide an overview of how branding influences the pipeline.

In sales-led growth companies, the first experiment is usually how advertising prior to sales outreach improves response rates and successful discovery calls.

For product-led growth, target a list of companies that haven’t visited your site. Track how many turn into MQLs (hand-raisers, not gated content) and how quickly they become opportunities.

In mature segments with low purchase frequency, sales impact might take over a year. Start with smaller budgets.

Brand Budgets

Results from experiments will provide data to back standalone budget requests, not just the “small” budget for experiments. You’ll know the time lag to expect for hand-raisers, the pipeline generated, and the revenue. In budget meetings for the next year, calculate how much future cash flow brand campaigns can generate compared to performance channels.

Extra Tip: Slowly grow the “brand” column in the cost structure to include anything besides performance media spend, like LP copywriting and ad asset creation. Increasing from $50k to $80k is mentally easier than going from $0 to $30k.

Summary

• The CEO and CFO need to understand that growth is generated by people who already know us.
• The more people have us in their mental shortlist, the bigger the market we can compete in.
• To achieve this, we need different creatives and formats than those used in performance campaigns.
• We should invest as much as makes sense and as soon as possible to have past data to prove the effect and more importantly to prevent competitors from overtaking us.