What the flip is 'the flippening'? Is it time for B2B marketers to change tact? The Daily Dose of Digital - 15/05/23

This is the first I've heard of the term, so I am going to assume Marketing Week are responsible for coining it, but apparently "the flippening" is coming, and it's going to herald a new era in B2B marketing. In fact, according to the piece by Peter Weinberg and John Lombardo, "B2B marketing is on the cusp of a Golden Age, a glorious revolution that shall be ushered in by a momentous event." So what the flip is 'the flippening'?

Well, apparently to understand this fully and to explain everything that's wrong with B2B marketing, there are three key numbers to consider:

1. 80%. According to the article - If you talk to a financial analyst, they’ll tell you something like 80% of a business' share price is based on cash flows that are 10 years out into the future, a much more long-termist view than the conventional wisdom that Wall Street is short-term. The market values businesses on their future cash flows, so it makes sense to build those future revenues into B2B marketing strategies.
2. 95%. From Marketing Week's research with the Ehrenberg-Bass Institute, around 95% of buyers are not ‘in-market’ to buy your products right now (duh!). That means for marketing to be effective, it's important to reach the 95% of customers who are not yet in-market to ensure your brand is front of mind when those customers do enter the market in some future period. Contrary to conventional wisdom, delivering short-term sales isn’t the most important job for B2B marketers, because only 5% of customers are ready to buy today. The most important job is influencing the 95% of future buyers who generate future cash flows.
3. 8%. LinkedIn's advertising data shows that B2B marketers only spend around 8% of their budgets on brand awareness objectives. EIGHT percent! Meaning the remaining 92% of B2B budgets are dedicated to short term, bottom of funnel objectives like lead generation. This may capture sales from that 5% of buyers who are actually in-market, but it has almost no effect on future buyers. As the article says quite succinctly - "Brand marketing is much better at building the lasting memory structures that determine future sales."

So, when we consider these three numbers together, it's pretty bonkers that B2B marketers seem to focus so heavily on the bottom of the funnel.

Let's review the maths.

80% of your company's value is based on future cash flows. 95% of your buyers are future buyers, not ready to buy now. So why the flip would you spend only 8% of your budget on brand marketing, which increases future sales from future buyers? Why are brands spending 92% of their money chasing after 5% of the potential customers? When you put it like this, it's pretty insane.

Yes, this is essentially a repackaging of the now famous (and probably over-cited) Binet and Fields "The Long and Short of it" - but the key thing here is addressing the change that is coming. Finally people are buying into the theory that the longer term gains are to be had from brand marketing in B2B, so the Flip is Flippening.

So what the flip is it?

According to the article, "The Flippening is that magical moment when B2B businesses realise that brand marketing creates more financial value than short term performance marketing, and B2B CMOs begin to allocate at least 51% of their budgets to brand marketing. The Flippening will spark a positive chain reaction, which will be good for everyone in B2B."

The shift to brand will benefit businesses for many reasons.

1. Brand advertising has been shown to increase long and short-term sales
2. It also improves pricing power
3. It can also reduce talent acquisition and retention costs
4. And it unlocks growth in new categories, and much more...

So, it's coming. The shift away from traditional B2B marketing tactics towards a more consumer-oriented approach. We're flipping. In addition to the more metric-driven reasons for this change is the growing importance of emotional connections in business relationships. Brands are increasingly judged on their ability to offer a cohesive and engaging experience to customers, which includes everything from customer service to brand storytelling.

In order to achieve this level of engagement, B2B companies are going to start increasingly investing in a variety of brand marketing tactics, from social media to influencer marketing to experiential activations, not just switching up their advertising goals from lead-gen to brand awareness. As Rogers notes, "B2B brands are taking a leaf out of B2C's book by looking to create memorable, shareable experiences for their customers and prospects."

Digital is fuelling the flip:

Another key driver of the flippening is the growing role of digital channels in B2B marketing. With the rise of digital transformation, B2B companies are recognising the importance of online channels such as social media and content marketing in reaching and engaging with their target audiences.

Digital channels offer B2B brands the opportunity to create more personalised and targeted campaigns, which in turn can help to build stronger emotional connections with customers.

However, the flippening is not just about adopting new tactics and channels - it also requires a shift in mindset. The article explains: "The flippening is as much about a change in mentality as it is about a change in tactics. B2B marketers need to start thinking like B2C marketers, putting the customer at the heart of everything they do."

This means investing in research and insights to better understand customer needs and preferences, and using this information to create more compelling brand experiences. I'd argue it's this change in mindset that is going to be the toughest part to flip. This style of advertising takes longer to generate success metrics, which doesn't always sit well with the C-Suite, but it also requires marketers to embrace a 'test and refine' approach when it comes to creative and messaging, meaning some things will land, others won't, and an agility is required to hit the mark with customers.

Weinberg and Lombardo conclude: "The flippening may represent a significant shift in B2B marketing, but it is one that is long overdue. By embracing brand marketing, B2B companies can create more meaningful connections with customers and build stronger, more resilient relationships for the future."

Will your business be joining the club, allocating upwards of 51% to bet on brand? The flippening is coming, will you flip too? Let me know what your experience of B2B brand advertising has been in the comments.