Many professional investors use a "barbell" strategy when constructing their portfolios. The barbell strategy was popularized in the early 2000's by Nassim Nicholas Taleb. Taleb has been a derivatives trader and a hedge fund manager, but he is best known as the author of The Black Swan and several other books regarding randomness, probability, and uncertainty.
The essence of the barbell strategy is investing simultaneously in extremely low-risk assets (such as U.S. Treasury bills) and extremely high-risk assets (like stock options or IPO's), while avoiding middle-of-the-road choices. The assets at the ends of the barbell have very different characteristics, and the investments are made with very different objectives in mind. Proponents argue that over time, a barbell strategy increases the odds of achieving superior overall returns.
The Barbell Strategy for B2B Marketing
A barbell is also an apt visual metaphor for B2B marketing. As the following diagram shows, the two components of the B2B marketing barbell are brand marketing and demand generation marketing. We now have persuasive evidence that companies must excel at both to produce superior marketing results.
The barbell metaphor is appropriate because brand marketing and demand generation differ in several major ways. Most importantly, they have fundamentally different objectives.
The objective of most brand marketing programs is to evoke changes in the minds of potential buyers. For example, such programs are often designed to:
- Make potential buyers aware of the brand (company or product)
- Cause potential buyers to remember or think of the brand when a need or buying situation arises
- Cultivate favorable perceptions of the brand in the minds of potential buyers