I have worked with many small- to medium-sized businesses (SMBs) that have expanded to other territories. They are either a new business or a business with other locations that are new to the area. Building name recognition is crucial for success, especially for those new to town and not yet well-known. Some industries are crowded, dominated by established locals, or have not been invented yet. Here is some advice on the importance of investing in name awareness advertising and why ambitious SMBs who want to make a lasting impact should be known before they are needed:
1. Be Ready to Spend
Percentage of Revenue
According to Gartner, B2B companies typically allocate 5-10% of their annual revenue to marketing efforts. This can cover all kinds of things like business cards, chamber memberships, and signage. Spending 10-30% of that budget for name awareness campaigns is a good rule of thumb. The exact percentage depends on the company’s stage and growth goals. And budget what you want to become. If you plan on being a $3-million-dollar company in a year or two, invest like you are there now. Spend $150-$300k on marketing and $15,000-$90,000 in building your name! HAVE THE CAPTIAL. GET A LOAN. INCLUDE IT IN YOUR BUSINESS PLAN.
Used or New
- Newer Companies: For SMBs just starting or entering new markets, a higher allocation toward brand awareness (closer to 30%) may be necessary. Establishing recognition and trust takes time, and investing in brand-building pays off in the long run.
- Established Companies: Well-established firms can spend less (around 10-15%) on brand awareness. Their reputation provides a solid foundation, allowing them to focus on other marketing initiatives. For example, an accounting firm expanding to its seventh regional state may not need to spend as much on its name.
2. Be Competitive
Industry Norms
- Competitor Spending: Analyze how much competitors invest in brand awareness. Savy media reps have access to spending reports. If your rivals have strong brand recognition, consider allocating additional resources to stand out. Remember, in a competitive market, visibility matters. When a potential customer goes to Google, you want them to know your name so they can look up information. If they go looking for category information, you are in for a dogfight.
Market Saturation
- Crowded Markets: SMBs must work harder to gain attention in highly saturated industries. A higher ad spend on name awareness becomes essential. Differentiating your brand from the noise requires strategic investment. Invest in news, talk, and sports radio stations to get name awareness to executives and business owners. Radio can provide the frequency in sixty, thirty, fifteen, or even five-second ads to hammer your name home. Repetition is the mother of learning!
3. Have a Goal
Short-Term vs. Long-Term
- Immediate Need: Name awareness might take a back seat if your primary goal is short-term lead generation, and you already have a good name. Maybe you bought an existing business. Focus on targeted campaigns that drive immediate results. It would help if you had a good digital marketing partner.
- Building Long-Term Recognition: For SMBs aiming at sustained success, consistent investment in name awareness is critical. Over time, this builds familiarity and trust among potential clients, which is positive word of mouth spread to thousands of potential clients.
4. Ad Spend Benchmarks
Digital Platforms
- Targeted Options: LinkedIn, industry-specific websites, and Google Ads offer cost-effective brand awareness options. Start with a modest budget (e.g., $2,000-$5,000/month) and adjust based on performance metrics.
- Traditional Media: Depending on your industry, consider traditional B2B advertising channels such as radio, trade publications, or industry events. While these may require a larger budget, they can yield highly effective results as they target larger markets. Remember, at any given time, only 5% of the market is ready to buy. The other 95% can learn about you before they need you.
5. Measuring ROI
Metrics That Matter
- Impressions: Track the number of times potential clients see or hear about your brand.
- Engagement: Monitor clicks, likes, shares, and comments on your ads.
- Conversion Rate: Measure how many leads or inquiries result from your brand awareness efforts. Or ask your radio rep how to track how many people visit your website after hearing an ad.
Be consistent and creative in your approach. Tell them who you are, and then tell them again in the same ad. Budget for it, and they will come, even in competitive markets. The days of waiting for the customer to learn about you through word of mouth are gone. Everything is faster and noisier now.
Jeff Caves is a sales columnist for BSM working in radio and digital sales for Cumulus Media in Dallas, Texas and Boise, Idaho. He is credited with helping launch, build, and develop Sports Radio The Ticket in Boise, into the market’s top sports radio station. During his 26 year stay at KTIK, Caves hosted drive time, programmed the station, and excelled as a top seller. You can reach him by email at jeffcaves54@gmail.com or find him on LinkedIn.
