How to Boost Growth Without Spending Any More On Marketing
Take a look at Interbrand’s most valuable global brands of 2016 and you won’t be surprised to see some iconic consumer brands near the top of the list. Coca Cola, McDonald’s, and Nike all feature prominently. These three brands alone are estimated to be worth a combined $138 billion. What might be more surprising is the presence of predominantly B2B brands in the same list. IBM, General Electric and Intel all appear near the top and with a collective brand value of $132 billion. They demonstrate that branding is not just a consumer phenomenon.
What does brand value mean? It is, simply put, the sum of how much extra people will pay, and how often they will choose, one brand over another. A strong brand lifts you out of the ‘tooth and nail’ competition of commodity markets and allows you to communicate and capture value – often without having to add costly features and benefits to your offer.
Why B2B Branding Is Important: You Have to Get Invited to the Party
Branding is as important to B2B businesses as it is to global consumer businesses. Sure, B2B’s usually have the advantage of a direct sales channel to the customer. But it is the power of your brand that will open more doors.
The difficulty is, every B2B industry is exploding with new competitors. The chances of being asked to even participate in new sales opportunities is decreasing every year, as are the chances of getting past the first round of negotiations. A strong brand helps get a company get invited into more opportunities and with better chances of moving farther in the sales cycle – pre-requisites to any B2B’s growth.
In addition, it’s been proven that B2B brands with strong equity consistently have higher awareness, customer satisfaction and loyalty.
The Three Biggest B2B Branding Mistakes
While you might not aspire to making Interbrand’s next list of most valuable brands, if you want to grow you should take steps to actively manage your brands. Here are the top three reasons businesses fail at maximizing brand value.
- Not Managing Your Brands At All
Quick, ask 10 customers what your business or its individual products stand for. Would you get lots of different answers? Would you be happy with any of them?
Unfortunately, most B2Bs have not been consistent nor proactive about managing their brand positioning or image. As a result, the customer’s experience may be suboptimal, which drives their perception of the brand. Good or bad, this perception is generally deserved; it is, after all, just reality with a lag effect.
Active brand management requires a decision of what position you can credibly own and then aligning all of your efforts around that vision at every customer touch point.
- Underusing Potentially Strong Brands
Many companies are in possession of a brand(s) that has equity — in other words, it resonates with certain customer segments, has a nostalgic reputation or positive qualities. But these brands are often lost in the noise surrounding a company’s other products. (see mistake #3 below).
Active brand management includes uncovering these hidden gems, and liberating their dormant power established through past branding investments.
- Creating and Supporting Too Many Brands
Many businesses have multiple products and numerous brands serving their chosen markets. They treat all of them equally and lack coordination between brands. This can be a legacy of previous growth and success or perhaps more commonly, an effect of many historical acquisitions.
Often, the business strategy that drove a company’s mergers and acquisition decisions doesn’t cascade down to the branding strategy of the new/combined entities. This has the effect of destroying value in the long term by confusing customers, creating inter-company wars and generally killing efficiencies.
Active brand management involves regularly monitoring and optimizing portfolio, to give customers much-needed clarity and your strong brands the resources they need to thrive.
Summary: Branding vs. Competing on Price – It’s Your Choice
Actively managing your B2B brand portfolio is the secret to organic growth – often not requiring any additional marketing spend. It does require discipline and tough decision-making, but pays off in real value that will accelerate growth and protect margins. Make a commitment to actively manage your B2B brand as a better alternative to competing on price in an undifferentiated commodity market.