Strategic Relevance of Brand Management in a B2B Environment

The most common misconceptions can be subsumed under the following three points:

1. Overestimated rationality – underestimated emotionality

“B2B transactions are too rational and price-driven to allow emotional components such as brands to play a decisive role.”

This typical argument against the significance of brands is true insofar as that prices in B2B transactions play a major role. Often decisions involve a bigger budget, and larger investments mean a higher risk for the buyer. Yet especially when it comes to minimizing decision risks, a brand and the trust that customers put into it are crucial. An oft-quoted example puts it in a nutshell: “Nobody ever got fired for buying IBM.” In a McKinsey survey¹ across 1,000 decision-makers, 42% of the interviewed purchasers quoted reduced risk as the most relevant factor relating to brands. Trust is a central factor and purchasers whether deciding singly or collectively are in any event humans, who, in making professional decisions, rely on their gut instincts in no small measure. In his book “Blink - The Power Of Thinking Without Thinking” Malcolm Gladwell explains how decisions in most business transactions are, to a large extent, actually guided by first impressions which are made in a few split seconds. When taking a decision, the decision-maker draws upon recollections, images, and, most importantly, stored emotions.

Besides having a decisive effect on purchasers, brands also have a positive impact on employees. Those who can identify with the brand in question are proud to work for the respective company and become valuable ambassadors for recruiting new employees.

2. Unwarranted distinction between employees and brand

«Das Wichtigste in unserem Geschäft sind unsere persönlichen Kundenbeziehungen – die Marke spielt dabei keine Rolle.»

It goes without saying: personal relationships in B2B business are extremely important. Brands however do not function independently of these relationships, in fact they serve to underscore them and have a significant influence on how customer relationships are conducted. The brand’s role here is the unifying element, giving a consistent impression and thus influencing decisions, especially when as in a B2B transaction a large number of people are involved. Thus it is no coincidence that many industrial companies spend substantial resources on training programs to instruct their employees and distribution partners on their brand values and teach them appropriate communication, management and conduct. The more people – technicians, managers, specialists, etc. – are involved, the more important a consistent and brand appropriate conduct becomes. Employee-driven factors such as professional expertise, candor and honesty in customer dialogues are the main drivers of discernable brand strength in a B2B company. Consequently brand management requires an integrated approach that includes such topics as the structuring of brand-compliant customer relationships, sales training or management schooling.

3. Overstrained internal focus

“Our products are too sophisticated to be communicated in simple brand claims.”

Certainly purchases and transactions in a B2B context are often far more complex than in a B2C environment.  Purchasers are faced with ever larger volumes of communicated information such as product features, technical data, specifications or key performance indicators, just to list a few. Theoretically all this information would require hundreds of decisions for and against a product. This is exactly where the brand takes on a central function in the decision-taking, enhancing communication efficiency by aggregating core values and associations, thereby projecting security and creating trust. It reduces the complexity of the offer and acts as an anchor and orientation aid, and helps decision-makers to take a preliminary decision thus shortening the decision-making process considerably.

Overall, B2B brands do not differ significantly from B2C brands with regard to their primary functions and their spheres of influence. Brands...

...   allow target groups to orient themselves in the diverse offering of products

...   achieve differentiation by a clear positioning in the competitive environment

...   create trust by consistently fulfilling the brand promise

...   create identification both among employees as well as customers and business partners

...   increase demand and strengthen loyalty and willingness to recommend

...   minimize the perception of risk at the time of taking a purchase decision

...   increase the efficiency in communicating values and customer benefits across the range of products and services

It has been demonstrated that brands in a B2B environment do not contribute any less to generating value and corporate success than in a B2C context. Their influence is also reflected in financial results: the aforementioned McKinsey study mentions a 20% higher EBIT margin on average in companies with strong brands compared to companies with weak brands.

Five success factors in B2B branding

1. Focus on a distinct profile

A cross-industry overview of different B2B markets and brands reveals a certain “herd instinct.” Apparently many B2B brands imitate each other with regard to brand values or customer benefits they communicate. Buzzwords such as innovative force or quality leadership no longer allow anyone to stand out and the long lists of product features and promised benefits go under in the resulting “sea of sameness.”  Moreover B2B customers don’t simply buy a product, frequently they are also entering into a longstanding relationship that is strongly dependent on emotional factors. Here a brand with clear values and a distinctive, emotional brand story creates a sharp corporate profile.

The success of an emotional brand communication is highlighted by “Smarter Planet,” an initiative launched by IBM in 2009. In a nutshell, the idea behind Smarter Planet was to demonstrate how information technology could help both the economy and institutions to act more intelligently, efficiently and ecologically. The initiative communicates the competencies of IBM in an emotional manner.

2. Employees as brand ambassadors

Employees and their conduct are key in honoring the brand promise and it is vital that they communicate identical values in all their customer interactions. Under the general heading of “Behavioral Branding” companies are launching dedicated training programs in which their employees learn to incorporate the brand’s values and let these flow into their communications and interactions with customers. Consistent conduct is doubly important in a B2B environment because often entire teams and departments are in close contact with each other. Thus it is no coincidence that Caterpillar, for instance, within the framework of their global “One Voice” program, trained over 10,000 employees so that they can convincingly communicate the personality and values of their brand in the marketplace.

3. Strengthening the corporate brand

Many industrial companies are prone to giving their new products and innovations specific names which are then managed more or less as a brand. From a customer perspective these products do not have the status of a brand since they do not trigger specific associations nor communicate an individual brand experience. They simply make the resulting product portfolio more complex and confusing which weakens rather than strengthens the corporate brand. As a rule only the corporate brand itself has the power to communicate cross-portfolio values and customer benefits that provide customers with orientation and/or decision-making aids. Swiss sanitary technology specialist Geberit, for instance, has been careful to ensure that in defining its brand structure and in structuring its product portfolio a clear association with the corporate brand is made at all times. At the same time its brand values have been consistently and target group-specifically communicated across all categories and areas of competence. 

4. Analyzing the customer brand experience

As with consumer goods, the B2B market is also always concerned with providing customers with the right information at the right time and in the right place. Not an easy task in light of the complex and non-linear buying processes and diverse target group structures involving different decision makers and stakeholders. An integrative view of the decision path, alternatively the brand experience, brings the relevant factors into focus: 1. The relevant stages in the “Customer Decision Journey” (the after-sales phase can be just as important or sometimes even more important than the pre-sales stage)² and 2. The type of decisions and decision criteria. Here direct interaction with the customer provides the most valuable information. Tooling manufacturer Hilti actually defines the tasks of their sales representatives so broadly that these also act as market researchers and ask customers face-to-face about customer satisfaction, brand perception and improvement suggestions. Other companies have also started closing the ranks between marketing and sales by directly providing their forces with relevant customer insights. At any rate, an in-depth understanding of the customer perspective allows a more efficient and focused allocation of resources in order to create the appropriate brand experience for the customer at the right time and in the right place.

5. Integrated omni-channel brand management

Digital networking is moving forward at a fantastic pace. Customers nowadays use physical and virtual channels simultaneously as a matter of course and logistics and e-commerce have been going hand-in-hand for some time. An integrative and consistent brand experience is therefore more important than ever. Holistic and long-lasting consistent brand experiences influence customer perception and create trust and loyalty, which is especially important in the B2B context. This requires an integrative approach in order to ensure that every customer contact – be it physical or digital – transmits a consistent image of the brand. Market management should not be organized according to separate channels anymore and requires an integrated brand management across all disciplines and sectors, e.g. marketing, sales, innovation and communications and even logistics and human resources.
The aforementioned companies (IBM, Caterpillar, Hilti and Geberit) have also consistently enhanced their integrative approach in brand management – starting with comprehensive internal training on brand content and values across to the creation of new jobs and functions that ensure brand management across all disciplines. Companies such as GE or Dow even have prestigious CEOs on-board who act as prominent brand ambassadors and take on a pioneering role in communicating and living the brand values.

* Both authors work for Branders, a branding consultancy in Zurich, Switzerland. Pascal Geissbühler as Head of Strategy and Member of the Executive Board and Philippe Knupp as Strategy Director.

¹ McKinsey 2014 – Einkäufer vertrauen starken Marken: Image auch im B2B Bereich ein wichtiger Entscheidungsfaktor

² O. Lingqvist, C. Plotkin, J. Stanley – The B2B Customer Decision Journey: The Route to Increased Sales (McK)