Branding – It’s Not Just for B2C
It’s rare for a B2C company to neglect branding. Yet branding in the B2B space branding doesn’t carry the same significance. Ironically, today many B2B marketers neglect branding, unlike their B2C marketing peers.
Branding by B2B companies however is not new. It has a long history. Here are a few examples: DuPont – 1802; Union Pacific – 1848; GE – 1892; Goodyear – 1908; UPS – 1913; Caterpillar – 1925, SAP – 1972; and FEDEX – 1973.
Here are five reasons businesses in the B2B space should develop their brands.
1. Increase Revenues and Profit. Bottom line: Brands command a premium. In some cases, a business can charge up to 40% more than generic or store-brands. One case in point is Mercedes-Benz trucks, which sell for 20% more than Volvo trucks.
This also means companies with strong differentiation can survive economic downturns more easily. In general, they are less susceptible to competition. Another benefit is that buyers accept marketing messages more readily than those of non-branded products and services.
2. Increase Customer Loyalty and Growth. A brand is a promise of a product or service. And when you build your brand, you build your promise. You know you’ve achieved that when your customers become your advocates.
Joe Puilizzi and Newt Barrett, authors of Get Content Get Customers, said: “Word of mouth marketing has always been important. Today, it’s more important than ever because of the power of the Internet.” ACME Brick of Ft. Worth, Texas, exemplifies the converting of customers into advocates. ACME uses an unheard-of “100-year” warranty to sell bricks to architects and homebuilders. This brand warranty helps win customers and loyalty.
3. Branding Increases Sales in Less Time. A strong brand makes selling easier, faster, and cheaper. In a 1988 Study (Malaval) of 200 European buying and marketing managers, 95% believed familiarity significantly influenced being placed on a short list.
As a result, this compresses the sales cycle. Buyers spend less time evaluating their choices. And sellers spend less time selling the customer. Two thriving brands Caterpillar and Komatsu illustrate this point. They survived a crowded market segment and now thrive in a competitive market space. They’ve differentiated themselves from the competition.
4. Branding to Influence the Buying Decision. Credibility goes a long way towards sealing the deal. That means B2B marketers must clearly and concisely communicate features and benefits. As you know, B2B products and services are typically expensive and complex.
Consequently, risk reduction plays a pivotal role in a buying decision. To address this risk, marketers must address emotions. Although facts and figures serve to justify a decision once made, emotions drive actions. Buyers tend to gravitate towards brands they trust. Powerful branding plays a key role here. AMD; Caterpillar, Cessna, IBM, and Zeiss are a few companies that make an emotional connection with their buyers.
5. Increase Market Share. This is no easy task for any company. But a U.K. study by Fred Reichheld revealed you can increase market share with branding. Specifically, his study showed that a 7% increase in word-of-mouth advocacy leads to 1% additional growth. In terms of brand advocacy effectiveness, his results indicated that a 12% increase in brand advocacy causes a twofold rise in revenue growth and increases market share. That’s the power of branding.
Branding is just as important in B2B as it is in B2C. It’s been proven to make a difference in a business’s bottom line. It creates enduring value. That leads to competitive advantage.
You could argue that because B2B products and services are more complex and expensive, branding is more important in B2B. The benefits of differentiating your business are substantial and clear.
Are your resources adequately focused on branding? Is your brand up-to-date? Does your company stand out from the rest of the crowd in a meaningful way?
If you answered no to any of these questions, use these five reasons to help persuade your boss to reenergize your brand.