by Andy
April 22, 2011
Consumer brands are wonderful things – especially the wonderful brands. When done well, effective brands are valued far above their product attributes and enjoy price points that are higher than near-identical, direct competitors.
There are many examples of great brands. The world’s #1 brand is Coca-Cola, which started from a pharmacist’s kitchen in Atlanta 125 years ago. Today, Coca-Cola’s brands are so valuable that its goodwill exceeds the value of its physical assets. Meaning, should every one of its bottling plants and corporate headquarters burn to the ground, banks would line up to gleefully lend it money to rebuild.
I also love the example of Morton salt. It sits right next to the generic salt and sells for $.25 more. What’s cool is that we all know its NaCl – whether it’s in the Morton blue canister or the white generic one. Salt is salt. Yet Morton’s outsells all other salt competitors at a higher price point because Morton salt is worth more in the eyes of consumers.
My point is that a limit exists on the value one can put in the box, but there is virtually no limit to the value you can put on it. Apple is the most current example of branding excellence. Others offer smartphones, tablets, MP3 players, and laptops that are rated superior, but Apple has branded theirs at a level others cannot touch. To wit, Apple’s 2Q profits nearly doubled.
The same logic applies to B2B. Unlike the consumer space, B2B transactions typically consist of fewer big purchases rather than many little ones. Since B2B buyers are very informed purchasers (or should be), the emotional pizzazz enjoyed by well-branded consumer products cannot be leveraged the same way. Here, heart plays a lesser role. That’s because the purchase cycle is longer (sometimes years in the making) and can cost billions (i.e., power plants). Make a mistake and companies go out of business, litigation arises, careers are broken. Here, the primary brand asset is intelligence.
In B2B, you’re trying to win over the head. The more expert the company is viewed, the more the target audience will believe the product (or service) will perform at a level worthy of an elevated price point. The more you can convince the target that extraordinary intelligence is the backbone to the product or service you’re selling, the more value you can draw from it.
So how do you put intelligence on the box? Through on-going commitment to thought-leadership, research, and relevancy. Leadership must explain where the category is going (Vision) with hard facts and expertise. Once the audience believes you (and your company) are indeed smart and have a firm grasp of the market reality, the more they’ll believe your product will meet the challenges of the impending future. The more you show you know about the present, the more they’ll follow you in the future.
B2B branding is more than eye-catching design and a powerful slogan. B2B branding is about brilliance. For B2B, brand is intelligence and that goes on the box. The product or service inside fulfills it.
Great post, Andy! I agree with most of what you said, but want to put forth the idea that emotion does matter a great deal in B2B marketing. While it is true that there is a performance element to B2B that is very rational (it works or it doesn’t, it saves costs or it doesn’t), there are still emotional components that play a big role. Business decisions are made by people and people (whether they are aware of it or not) are swayed by their emotions. In B2B, some of those emotional hooks are things like “It will make my life easier. I will get promoted. People will think I am smart. People will respect me.” The more the field of behavioral economics is explored, the more we realize that we are not as rational a species as we think! Keep up the great posts.
Great post, Andy! I agree with most of what you said, but want to put forth the idea that emotion does matter a great deal in B2B marketing. While it is true that there is a performance element to B2B that is very rational (it works or it doesn’t, it saves costs or it doesn’t), there are still emotional components that play a big role. Business decisions are made by people and people (whether they are aware of it or not) are swayed by their emotions. In B2B, some of those emotional hooks are things like “It will make my life easier. I will get promoted. People will think I am smart. People will respect me.” The more the field of behavioral economics is explored, the more we realize that we are not as rational a species as we think! Keep up the great posts.
Good insight once again, Andy. I think your reasoning applies equally as well to services and products, as you say. Buyers must be comfortable that the seller has the smarts to deliver–and, if the price is elevated, that that this seller is smarter than the other potential sellers.
Good insight once again, Andy. I think your reasoning applies equally as well to services and products, as you say. Buyers must be comfortable that the seller has the smarts to deliver–and, if the price is elevated, that that this seller is smarter than the other potential sellers.
You outline a nice distinction between these two perspectives. Well said!
You outline a nice distinction between these two perspectives. Well said!
I seem to remember someone training us that they best way to build a brand is to sell a bunch of stuff, and the best way to sell a bunch of stuff is to have a clearly differentiated product that is in price position. Effective branding starts with great product.
I completely agree. Assuming the product is strong and differentiated, it’s branding and effective brand management that will get it to the next level. For B2B, I argue the best brand support is the expertise behind it. Granted, exceptions will exist to any rule. But if the head is driving the decision, then you must pander to it — not the heart.
I seem to remember someone training us that they best way to build a brand is to sell a bunch of stuff, and the best way to sell a bunch of stuff is to have a clearly differentiated product that is in price position. Effective branding starts with great product.
I completely agree. Assuming the product is strong and differentiated, it’s branding and effective brand management that will get it to the next level. For B2B, I argue the best brand support is the expertise behind it. Granted, exceptions will exist to any rule. But if the head is driving the decision, then you must pander to it — not the heart.
Hi, Thanks for recent updated! Do you have a twitter account, so I can easier follow you?
#relevancy
Hi, Thanks for recent updated! Do you have a twitter account, so I can easier follow you?
#relevancy
I’m impressed, I must say. Really rarely do I encounter a blog that’s both educative and entertaining, and let me tell you, you have hit the nail on the head. Your idea is outstanding; the issue is something that not enough people are speaking intelligently about. I am very happy that I stumbled across this in my search for something relating to this.
I’m impressed, I must say. Really rarely do I encounter a blog that’s both educative and entertaining, and let me tell you, you have hit the nail on the head. Your idea is outstanding; the issue is something that not enough people are speaking intelligently about. I am very happy that I stumbled across this in my search for something relating to this.
Great Article! I think Goldschlager is another great brand case study matches the success of Mortons.
How so?
Great Article! I think Goldschlager is another great brand case study matches the success of Mortons.
How so?