13 March 2013
Market Leader, the strategic marketing journal for business leaders, has recently published an article on B2B branding by Workroom founder Brigid and Strategy Consultant Alec.
Consumer marketers know that putting the brand at the heart of decision-making is a vital business asset. It’s the basis of relationships – a tool to influence customer choice, create loyalty, attract, motivate and retail talent, enhance economic value, and stem product and service substitution, copying and commoditisation.
So why is it that so many B2B and corporate brands don’t follow the lead of their compatriots in the consumer world? Brigid and Alec offer five pointers for getting full value from B2B brands, with examples including Reckitt Benckiser, Balfour Beatty WorkPlace, Pentax Medical, and Balfour Beatty Living Places.
Great brands establish demand, achieve higher returns and make predicting future growth more likely. As a result, they are a key driver for acquisitions and sales. Everyone prefers a business or brand that is authentically different and relevant.
This is all well evidenced in the B2C market – so what holds back many B2B companies from building meaningful and genuinely distinctive brands?
With a few exceptions, most B2B brands tend toward the generic and dull (and blue). Marketing and communications focus on category benefits, not corporate characteristics. They use the bland vocabulary of ‘solutions’ and ‘preferred partners’, are uninspiringly familiar, and tap into conventional and ‘off-the-shelf’ visual language. They completely fail to shape a reputation for being genuinely distinctive and are unable to build real value. This usually leads to a reliance on tactical sales and cost promotions, diminishing perceived value even further.
Our experience of working with dozens of international organisations has shed light on a whole bunch of reasons for B2B’s comparative weakness in brand value creation.
Many, perhaps even most, senior executives in B2B (and corporate) organisations hear ‘brand’ and think ‘badge’. The term is inextricably linked with what they perceive to be of minimal impact to the success of the business. They also mistrust much of the mumbo-jumbo that infects the discussion. So brand is not even con- sidered as a serious strategic asset.
While brand design itself is a critically important discipline and an essential tool to amplify distinctiveness, the link between ‘brand as style’ and ‘brand as strategy’ should be severed. Enlightened organisations recognise that brand means ‘what we promise our stakeholders, and in particular our customers’, which in turn means ‘why we are in business and how we work around here’.
Brand stands for vision, purpose and market positioning, as well as a set of guiding principles that must be invested in and articulated for all. So clearly this is not just about logo and design standards that require implementation.
Corporates whose success depends on a portfolio of consumer brands also underinvest in their B2B brand. But there are exceptions. Reckitt Benckiser recognises that its business brand reputation has a fundamental impact on its ability to attract future talent, as well as build rewarding partnerships with suppliers and distributors. It knows that its consumer brands and corporate brand are mutually reinforcing and that both require investment.
For Reckitt Benckiser, its distinctive brand is about its positioning, its unique culture and its personality. The corporate brand points to a purpose and sets direction for the whole organisation.
Because of the comparatively high price tag compared with B2C brands and services, B2Bs must demonstrate tangible value to win business. These products and services tend to have much slower sales and repeat purchase cycles. People don’t buy B2B products and services on impulse. And in many B2B markets procurement has become hugely professionalised and powerful.
While brand may not feature prominently on a spreadsheet of buying criteria, you can be certain that without the right reputation, you won’t even be part of the consideration set. You’ve got to be in it to win it and your brand positioning reflects your perceived business competencies – the services and value you are capable of delivering.
Business customers need to make accountable decisions, weighing up characteristics that constitute the best return on investment. In our experience, a shared ‘big picture’ vision for success and creativity can seal the deal – providing it’s backed up with advantageous features and pricing.
Even when the end vision is shared, a common blocker to effective B2B marketing can be the fear of being different and standing out from the crowd. There is often reluctance from businesses to diverge from the norm – for example, to use less technical language to describe services and market products and services more creatively.
Companies that have the vision and courage to see themselves and their opportunities differently reap lasting rewards. Pentax Medical has grown market share and profitability since it developed a focused brand positioning, using that to carve out a new vision for its business.
Hans-Werner Albrecht, vice-president of global service at Pentax Medical, said: “To make a strategy work in our business, the brand strategy has to deliver on the customer promise at every single touchpoint.
“To define exactly what is the touch and feel of dealing with a ‘true professional partner’, and which services and behaviours will authentically underline that position, is as important as sharing this understanding with everyone in our organisation. In the end, this brand position has to be at the heart of all our decisions.”
Pentax Medical’s brand is a promise – an authentic commitment to focus on the customer and offer a service that exceeds current expectations.
Differentiated brand propositions work best when they connect on an emotive level with the needs and concerns of an individual. Segmentation provides the means to scale that highly personal connection and align their needs with behaviours and messages – the basis for focused and integrated brand marketing.
For B2B businesses, the customer is harder to pin down because there are often many buyers with different roles and preoccupations. And B2B marketers often face a double brake on differentiation – lack of a really sharp business strategy and lack of a focused stakeholder strategy.
The challenge of having a broad stakeholder base should become an opportunity to create a distinctive and visionary brand. A strong B2B brand promise offers a vision for improved performance and shared success, which transcends detailed sales messages and value propositions.
Segmentation for B2B can mean identifying clients whose corporate ambitions align with the outcomes that you can offer. And it also helps you to focus on markets where you can leverage your sustainable advantage.
For Balfour Beatty Living Places, defining and putting the brand at the heart of decision-making has been a key factor in a remarkable transformation from a traditional and narrowly-focused highways business into a lead player in all areas of managed services for local authorities and public sector organisations.
Terry Woodhouse, managing director of Balfour Beatty Living Places, says this was a major reason why it won a £200 million, 10-year contract this year: “The new North Tyneside contract is the first genuine manifestation of a client buying into the new Balfour Beatty Living Places brand. The brand’s promise is at the heart of the whole contract’s raison d’être.”
B2B businesses find it hard to dissociate their own opinions and prejudices from the way they define and deliver their brands. This is understandable, since B2B business development is generally dependent on a person-to-person sales process, and the nature of the service or product is reliant on professional and personal expertise and experience.
But as a result of over-identification with the brand, combined with the desire to focus on product features, B2B companies tend towards highly normative branding. Just as the basis of the B2B proposition should be the outcomes that can be achieved through deploying the product or service, so the B2B brand language should create a new vernacular.
Creative judgements can be difficult for senior executives with financial or operations backgrounds, who may feel that they lack the expertise to ‘think different’. And many corporate communications advisers with public relations backgrounds will focus on ‘managing the story’, rather than bringing the vision to life.
Picking the right creative partner to provide perspective can require a leap of faith. But the risk will be worth it if you give the thumbs up to a team who can point to the business results of their work.
B2C tends to be mass-market and, as a result, marketers need to invest in ‘one- to-many’ activities and campaigns, such as advertising. B2B businesses that maintain a narrow view of brand often assume brand building is the same as advertising – notoriously expensive and inefficient.
Agency fees can be hard for marketers to justify, especially if they only cover short-term campaigns and one-off events. The best investments in B2B branding are long-term – bringing analytical and creative talent to define vision, distil a unique proposition and develop a distinctive visual identity that ensures that all stakeholder touch points are compelling and coherent.
But the creative services industry doesn’t do a great job of branding itself. Clients are confused by the language agencies use to describe their services and skills. And few agencies have grasped the importance of helping B2B clients develop any sort of business case for brand investment.
Putting the value of brand on the balance sheet is a complex calculation, but proving the return on investment of brand marketing and its effect on the sales pipeline is quite easy to demonstrate. You just need a level-headed commitment to measure the outcomes of brand positioning and personality, and to assess which aspects of brand marketing actually make a difference to reputation.
While branding is usually linked to success with prospective customers, let’s not forget the impact of brand on the internal stakeholders. Providing a clear focus and a well-articulated brand promise gives everyone a real sense of direction and purpose. It energises efforts, motivates supply chain and helps staff invest in the right opportunities.
When Haden Building Management rebranded to become Balfour Beatty WorkPlace, the brand’s central idea, ‘Freedom to perform’, helped to drive a complete rethink of the company’s leadership framework, eliminating layers of complexity. This created the autonomy staff needed for mission-critical service delivery and has been fundamental in winning major multi-million pound bids.
Eighteen months post-rebrand, Balfour Beatty WorkPlace saw a 41% increase in revenue, a 33% rise in average annual value of orders, bid teams became 2.5 times more productive, tender conversion rates soared from 25% to 50%, and the average value of orders per person rocketed by 565%. Although the rebrand can’t be fully attributed to all this success, its role is unquestionable, especially since there was no additional marketing spend to support the relaunch.
As a result of the five factors we’ve identified, B2B brand management tends to be a highly operational and downstream task. The notion that ‘brand is fluff’ becomes a self-fulfilling prophecy. What can break this cycle? There are two possibilities: strategy and vanity.
The strategic ‘lightbulb moment’ is often switched on when a B2B company realises that its brand is locking it out of sales opportunities. Failing to make a supplier shortlist or win a tender is the catalyst to a leadership team’s realisation that having a distinctive and compelling brand really does matter, because reputation is either an asset or an anchor.
Vanity is another driver to reappraise the role and value of brand. Many leadership teams become frustrated that they – and their companies – are not better known and more highly esteemed. They want to be famous because they intuitively know that being talked about is the most effective of all marketing strategies.
It’s true that the penny must drop at the highest levels of an organisation that brand is about strategy, not about spin, to make meaningful change. But professional B2B marketers still owe it to themselves and to their colleagues to keep plugging away about the importance of bringing brand into the heart of the organisation. Because companies that do this outperform their rivals and connect better with customers. They do things better, and they do things differently.