When asked what separates them from the competition, too often B2B companies speak of their sterling reputations and unsurpassed expertise. The issue is that a company of any significant longevity is likely reputable and capable, otherwise it would have gone out of business long ago. Many fail to understand that expertise and reputation are not enough when aiming for maximum profit in competitive, lowly differentiated industries. A company may be able to survive on reputation alone, but it will never become a market leader. To do that, it needs a brand.
According to corporate brand expert Larry Ackerman, “the corporate brand offers managers a comprehensive discipline for clarifying, humanizing, organizing, and communicating how [a] company creates value.” Empirical studies and real-world performance have proven the efficacy of corporate brands, but still many companies fail to respect a brand’s ability to communicate a company’s unique value and competitive advantage.
A reputation is built on offering high quality, credible, and ethical solutions that people can rely upon and come to trust. It is a company’s relationships and resume. Reputations are built on a history of excellence and outstanding past performance, but though a reputation is a necessary condition for success, it is not enough. Reputation is only one part of a brand. A brand is an expression of the character and value of a company. It establishes a significant and differentiated presence in the market that attracts and retains customers. It is not a name, a logo, a tagline, a font, or colours. Nor is it a company’s culture, values, customer experience, or reputation. It is a representation of all those things.
A carefully cultivated brand tells current and potential customers what separates a company from competitors. It carves out space in a customer’s mind so that the name of the company, or any image or message associated with it, calls to mind a complex web of associated signifiers. They can be attributes, items, colours, phrases, words, traits, memories, and even smells. These associations are involuntary and unstable. They come to mind without prompt and change with each piece of marketing collateral a customer sees, each interaction with a sales person a customer has, and each time a customer sees your logo or reads copy describing your company.
An effective brand wrestles control of that involuntary, shifting process in a customer’s mind and seeks to control the associations and meanings that people attach to your company. Even in B2B buying, which often on the surface involves “rational” buying processes free of emotional input, a strong brand acts a heuristic shortcut in a buyer’s decision making.
There is empirical proof of this. Academic studies and real-world performance make a compelling case for the ability of a brand to enhance a company’s competitive advantage and produce financial results. Strong brands not only increase the chance of a company being placed on a buyer’s bidding list, but enable it to:
- increase referrals and loyalty,
- increase barriers to entry,
- command a price premium and higher margins,
- enhance confidence during the decision-making process,
- expand their service/product offering,
- increase demand and awareness,
- reduce buyers’ feelings of risk and uncertainty
- increase acceptance of their direct sales process, and
- support their service or product claims.
A study published in Industrial Marketing Management found that companies that are able to cultivate a leading industrial brand name command a price premium of nearly 14% over companies with unknown brands. That study also found empirical proof that buyers are more willing to recommend companies with strong brands and perceive the quality of the product or service to be higher with no actual change in quality.
To deliver quality and have a reputation is not enough. B2B marketers must ensure that their companies not only have excellent reputations and high-quality products or services, but that those merits are translated into perceived quality through the power of their brand. Brands support reputations by establishing and communicating credibility. To give your company an enduring identity that makes it an icon in its market and connects with audiences, it needs a strong brand.
(Seyedgehornan et. al, Advancing Theory and Knowledge in the Business-to-Business Branding Literature, The Journal of Business Research, 2015)
(Bendixen et. al, Band Equity in the Business-to-Business Market, Industrial Marketing Management, 2003)