Growth at all costs has proven to be a failed idea. And while in today’s tough economic context marketing spending in SaaS companies has taken a cut, it has become crucial to balance a successful growth plan with a solid branding strategy.
How you build a strong brand foundation by allocating a reasonable share of your budget it’s an important question. But how do you prioritize on the essentials?
For Jenny Sagstrom, CEO of Sköna, in the past, SaaS companies primarily focused on selling their services to a small percentage of interested buyers. This approach prioritized short-term growth and immediate conversions. “However, as the SaaS industry evolves, it is crucial to broaden the reach and engage with a wider audience for sustainable long-term growth”, says Sagstrom.
Building a successful brand requires going beyond immediate results and attracting customers who may need the product or service in the future. This involves creating brand awareness and recognition to ensure that your company is remembered when the need arises.
To achieve this, says Sagstrom, a comprehensive marketing strategy that combines performance marketing and brand building, known as “brand Gen,” is recommended. “This approach incorporates both short-term performance goals and long-term brand-building efforts, aligning with a more sustainable and forward-thinking approach”, adds the CEO of Sköna.
The end of “growth at all costs”
With the rising cost of capital, companies are shifting their focus to long-term strategies and making thoughtful decisions that make sense in the larger picture.
In the current economic context, pursuing growth at all costs is no longer effective. Striking a balance between growth and investing in a robust branding strategy is crucial. Traditionally, B2B and SaaS companies allocated most of their marketing budget to performance marketing for immediate results. However, according to Sagstrom, it is recommended to aim for a distribution of around 60% for performance marketing and 40% for branding. This balance allows for both immediate lead generation and sustainable future growth.
While driving immediate leads is important for job security, solely focusing on short-term results can lead to a lack of prospects in the future. Investing in branding is essential to ensure a sustainable pipeline of customers. “While the exact percentage allocated to branding may vary, starting with a 40% allocation represents significant progress”, says Sagstrom. “The market is gradually recognizing the value of considering factors beyond short-term performance”, she adds.
The priority factor
When working with a limited budget, prioritizing branding initiatives requires careful consideration. It’s important to maintain short-term momentum through performance-driven activities while also allocating resources for longer-term initiatives.
To facilitate decision-making, adopting a campaign-oriented approach can be valuable. This approach involves creating a cohesive theme that aligns with your brand’s identity for the upcoming year. By investing in quality content under this thematic umbrella, each marketing piece reinforces the others, leading to increased effectiveness and momentum.
“Prioritization is crucial because inaction is not a viable option. While some companies may have chosen to halt activities during uncertain times, it became clear that staying idle was not the best strategy. Instead, investing in branding initiatives during challenging economic periods presents an opportunity to gain market share, as others may be cutting back”, highlights Sagstrom.
Successful branding initiatives on a limited budget can be achieved through strategic testing and message refinement. Instead of assuming past strategies will work, according to Sagstrom, conducting small-scale tests helps identify effective approaches for your target audience. Once successful strategies are identified, doubling down on them and optimizing efforts is key.
Companies with limited resources are investing more in brand strategy, positioning analysis, competitor research, and understanding their audience and the business problems they solve. “This internal work helps uncover unique insights and differentiating factors that set them apart. Refining messaging is crucial before communication, considering the current landscape. Engaging in this process enables companies to position themselves strategically”, says Sagstrom.
These examples demonstrate that with a tight budget, successful branding initiatives can be accomplished by embracing a test-and-learn mindset and investing in internal brand development to refine messaging and achieve a strategic market position.
The overall branding picture
In general, organizations have the flexibility to track different KPIs based on their objectives, using tools like brand awareness studies and platforms such as Synth or Blue Ocean. Each company must determine the most relevant metrics for them, including organic search, lead generation, pipeline development, and PR coverage.
For Sagstrom, brand marketing allows the customization of metrics based on organizational needs. For SaaS companies aiming to build a strong brand in challenging economic times, it’s important to refine brand strategy, messaging, and content marketing efforts. “Testing, optimization, and measuring the impact of branding initiatives using relevant metrics are crucial. Leveraging PR opportunities can enhance brand visibility, and adapting to market changes and investing in both short-term performance marketing and long-term brand building are key for sustainable growth”, adds the CEO of Sköna.
She also gives some bits of advice: “To build a strong brand in the current economic landscape, focus on discovering your unique value proposition by understanding the problems you solve for customers. Encourage customer advocacy and leverage employees as brand ambassadors. Experiment with different approaches to find what resonates with your target audience. Repurpose existing content to maximize its value. Seek inspiration from successful branding initiatives and rebranding strategies”.
Complying with these strategies, according to Sagstrom, will help establish a compelling brand presence and effectively navigate the current economic landscape.