Beyond the Funnel: Balancing Brand Building and Transaction Driving for Sustainable Growth
There was a recent headline in the
reporting Airbnb’s record profits fueled by brand marketing. Well, there’s more to the story than meets the eye. The industry often grapples with a false choice: brand building or conversion driving. But what if we could harness both simultaneously to drive long-run sustainable growth?This article explores the emerging trend that Airbnb’s loss and success illuminates: brand building while at the same time driving transactions. This data-driven approach seamlessly blends top-of-funnel awareness with mid-funnel engagement and bottom-of-funnel conversions, building brand affinity while generating short-term transactions and long-run customer loyalty and value. It’s a win-win for both the present and the future.
Data Debunks the Silo
Traditionally, marketing efforts were segregated; brand-building campaigns ran on billboards and social media, while conversion-focused tactics dominated search and retargeting ads. Often companies heavily invested in one and not the other. However, data paints a different picture. Studies by Edelman and BrandZ showcase a strong correlation between brand equity and financial performance. A powerful brand acts as a magnet, attracting customers, boosting loyalty, and commanding premium pricing. Neglecting brand building in pursuit of immediate sales is akin to planting seeds without nurturing the soil.
The Airbnb Example: A Cautionary Tale
Airbnb’s early success demonstrates the initial allure of prioritizing transactions. Paid media campaigns drove rapid growth, fueled by the novelty of the platform. However, neglecting customer experience and failing to adapt to evolving needs led to negative reviews and stagnating growth. This serves as a stark reminder that short-term transaction-driven strategies are unsustainable without a foundation of strong brand equity.
Transactional Brand Building: The Gold Standard
The key to achieving a harmonious balance lies in transactional brand building. This data-driven approach leverages brand awareness campaigns to collect valuable customer insights. These insights, both qualitative (feedback) and quantitative (data from brand awareness campaigns), inform product development, customer experience improvements, and even future brand messaging.
Rain the Growth Agency is one of the pioneers of this approach using the language of “transactional brand building”, advocating for brands to confidently own a full-funnel approach. By integrating brand building and conversion efforts, brands tap into a powerful flywheel effect where brand data fuels conversion and converted customers enrich data, creating a self-powered loop of growth. Positive brand experiences generated through top-of-funnel campaigns convert customers from paid media, who then become owned data assets, fueling further targeting and personalization for lifetime value. This results in increased brand affinity, driving organic referrals and repeat business, ultimately amplifying future transaction volumes.
Rain the Growth Agency’s implementation of the Transactional Brand-Building model for their client OOFOS, an active recovery footwear brand, demonstrates remarkable success. Since adopting this approach in 2019, OOFOS experienced a significant 63% growth in sales from 2020 to 2021. Additionally, during this period, the brand saw a 54% increase in new customer acquisition, underscoring the effectiveness of this integrated marketing strategy. You can find out more here.
Preparing for Economic Headwinds
As deflationary pressures loom, owning the full marketing funnel becomes even more critical. In a recessionary environment, brand loyalty fosters resilience. Customers who hold a brand in high regard are more likely to stick with it even when faced with price sensitivity. Additionally, by understanding their marketing mix and customer data, brands can optimize spending and target resources more effectively, maximizing return on investment even in a tighter market.
The Takeaway:
Transactional brand building is not just a marketing tactic; it’s a strategic shift in mindset. By recognizing the interdependence of brand and conversion, brands can create a virtuous cycle that fosters sustainable growth. As we navigate economic uncertainties, the brands that prioritize both long-term brand equity and data-driven conversion tactics will be best positioned to weather the storm and emerge stronger with increased market share.
Things to Remember:
- Data is the bridge between brand building and conversion. Use insights from both top-of-funnel and mid-funnel campaigns to inform product, experience, and messaging will improve bottom-of-funnel conversion.
- Own your full marketing funnel. Integrate brand building with conversion efforts to create a data-driven flywheel effect.
- Prioritize brand affinity. In a recessionary environment, loyal customers become your most valuable asset.
- Data is your compass. Optimize your marketing mix and resource allocation based on customer insights and performance metrics.
By harmonizing brand building and conversion, brands can craft a future-proof marketing strategy that drives both immediate results and long-term success. It’s not about choosing one over the other, but about finding the perfect blend that resonates with your audience and fuels your journey towards sustainable growth.
