Is brand awareness or lead generation more important in a small business?

Brand awareness vs lead generation: what matters most for small businesses

For marketing to work and perform at its optimum level, a business needs to invest in both brand awareness and lead generation activity. But as a marketing consultant who has worked with dozens of small businesses, I regularly see activity being combined and becoming multi-functional due to limited resources. The outcome is that it can be far less effective. Both brand awareness and lead generation each play vital role in the marketing funnel and must work hand-in-hand to be effective.

What is brand awareness?

You're probably familiar with the term brand awareness. But let's define what we mean. Brand awareness is the extent to which your target audience or prospective buyer can recall and/or recognise your brand.

It is used to:

· Increase the size of your audience

· Build trust

· Drive traffic to your website

· Change perceptions of your business

· Drive customer loyalty

· Typically involves social media, blogs, advertising, and PR

Brand awareness is essential for any business and activity which occurs at the first stage and the top of the marketing funnel where you become front of mind for a prospect. This buying journey, also known as the sales funnel is a process a prospective customer goes through to make a purchase. As one of the original theories of marketing, this ground-breaking model (and one I remember learning at school over three decades ago) was invented by E St Elmo Lewis and dates back over 100 years. It assumed that buyers go through four key stages – awareness, interest, desire, and action and this was later evolved to introduce two more stages – loyalty and advocacy. It has become the cornerstone of many marketing strategies and plans all over the world and communication is planned and served to target each of these phases.

What is lead generation?

Hubspot defines lead generation as the process of attracting prospects to your business and increasing their interest through nurturing, with the end goal of converting them into a customer.

Therefore the main focus of lead generation is to create interest in your product or service, not just to be aware of your business. One of the most common techniques for doing this is for businesses to use gated content where the prospect provides their name and email address in exchange for a piece of content.

Lead generation activity includes:

· Pay-per-click advertising

· Blogs

· Events

Of course, there is overlap between some of the channels used for both brand awareness and lead generation, but ultimately it depends on the objectives set. I also would add that lead generation needs to generate an outcome and immediate result, so a strong call to action and incentive are a must. ‘Lead magnets’ as they are known, are a must and now common practice. This could consist of an e-book, training paper, or free tips. Interestingly 60% of marketers suggest that short-form written lead magnets (newsletters, checklists, ebook samples) generate the highest conversion rates while only 40% claim that long-form written content (guides, whitepapers, reports) generate the highest conversion rates. (GetResponse).

A simple mechanism is required to capture contact details, but be mindful of ensuring you're not asking for too many details which could be a barrier versus having enough information to qualify a lead. Generally, the fewer forms on a field, the higher the conversion rate. Finally, consider creating a campaign landing page that will be tailored to the campaign and the audience you're targeting.

Sounds simple so far? Well, it starts to get more complicated when you start planning resources and budgets.

How much should you invest in each?

My experience of working with small businesses is that often brand awareness activity gets cut as the company has a smaller budget for marketing than is required to achieve the business objectives and the organisation can’t afford to wait a year for the return, as cashflow is tight.

According to research from LinkedIn B2B, the optimal marketing split is 46% brand and 54% lead generation activity. Thus The B2B Institute advises that an even split of brand building and lead generation is more likely to generate better results than focusing solely on the latter. Interestingly, LinkedIn have found that businesses that run brand and activation campaigns together have achieved a six times higher conversion rate for lead generation.

There is more research that supports this. Binet and Field add that many B2B brands spend considerably less than this proportion on brand building and contrary to what many people think, investment should rise as a business matures and grows.

There are many more studies to support this - research from Marketing Week and The Marketing Practice has shown that B2B brands that were identified as outperforming their competition over the last two years were twice as likely to allocate 60% or more of their budget to achieving long-term marketing goals. So can you afford to take a leap of faith?

How long does brand building take?

This is an interesting subject and many marketing experts will have different points of view. Of course, this will depend on how well established you are, your budget, the market you operate in, and your commitment to marketing. A recent survey from LinkedIn shows that 96% of B2B marketers typically don’t measure impact beyond six months, which is when brand effects begin to pay off. This is certainly the earliest timeframe I would recommend to clients, if not 12 months.

What is more important?

Always remember that brand awareness and lead generation is a two-stage process. You simply can't fast-track to generating leads if your target audience isn't aware of you and you lack credibility. And we know this takes months or even years to achieve.

My advice to businesses is always to create a trustworthy reputation by running brand awareness campaigns and continuous brand-building activity. This will include daily social media posting and weekly blogging to name a few and even better thought leadership for those that operate in business-to-business. Momentum and consistency are needed. There is no denying that this is hard work and requires commitment and resources to sustain. Having a focused marketing plan helps businesses to achieve this and prioritise the right activity that is then rolled out in the right order.

But once you’ve achieved this, you can move into running lead generation campaigns that deliver effective results and the time involved in the purchasing process should reduce, as prospects are aware of you and trust your business.

What do you think and what is your experience of this? I would love to hear your thoughts. Feel free to comment below.

If you found this useful, then you may like to read 10 tips to create a thought leadership programme and 5 ways to support the growth of your business post-pandemic.