“The art of marketing is the art of brand building. If you are not a brand, you are a commodity. Then the price is everything and the low-cost producer is the only winner.” - Philip Kotler
Kotler’s words ring especially true of the B2B sector where it has been traditionally believed that suppliers should only optimize the features and pricing of their products to secure business orders.
The truth is, however, that such deals are much more dependent on strong brands and emotional connections.
Let’s start with the basics then. What is a brand and how does it help grow a business?
What is a brand?
- A promise of value
- The customer’s perception of the company’s mission
- The experience that customers have when they interact with a company
- An emotional connection between the buyer and the seller
- A unique identity
Why Does Any Business Need a Brand to Grow?
Growth in business is essential to success. A company must adapt to changing trends and customer needs. Branding can be an integral part of this process as customers engage with strong, powerful brands.
Branding has an enormous effect on a company’s market value:
- 59% of chief executives believe that corporate brand and reputation represent more than 40% of their company’s market capitalization. Further, over 77% believe that reputation has become more important in the last two years.
- Brands account for more than 30% of the stock market value of companies in the S&P 500 index.
As seen in the image below, the world’s top 40 brands consistently beat the market.
The graph shows the top 40 brand portfolios have a higher rate of return than other companies. The value of the company increases as the brand strengthens.
But it’s just not financial and business data that prove this point.
Around 95% of purchase decisions are done by the subconscious mind. Unlike stand-alone business data, brands tell stories that engage with human emotions, reach the subconscious, and convince users to make purchases.
However, these concepts have traditionally been associated with the business to consumer (B2C) sector, while business to business (B2B) decision-making has been considered more of a ‘dry,’ logical process.
On the contrary, CEB, a best practice company, conducted a study that shows the B2B sector is more influenced by connections and emotions than B2C customers.
Why Do B2B Businesses Need a Brand?
All businesses should develop a brand that speaks to their customers. Creating a creative and unique brand can change the trajectory of your business. Below are four reasons your company needs to invest in brand development.
1. Customers Will Purchase & Pay More for Suppliers With a High Brand Connection
The CEB studies demonstrate that when B2B customers have a ‘high brand connection’ with a business, they are 13 times more likely to consider buying from that company and 30 times more likely to pay for premium services.
A high brand connection can be when a company feels confident using the brand’s products or services or believes the brand is an industry leader.
Customers purchase items from strong brands that give them a feeling of value. Connecting with a brand increases consumer loyalty as more customers want to buy a brand product.
2. Brands Drive Decision-Making
McKinsey & Company, a global management consulting firm, crafted a study that revealed decision-makers consider the brand a central element of a supplier’s value proposition.
Depending on the industry and geography, the exact relevance of the brand may differ, but overall a company’s brand is on par with sales as an influencing factor for purchase, even in B2B.
Companies in different countries differ in their opinions regarding the importance of brand relevance. Some companies prioritize brand more than others.
Indian companies believe brand heavily influences decisions while fewer German companies are convinced. Still, a large portion of businesses recognizes the role brand plays in product success.
3. Strong Brands Generate More Profit
Companies with brands that are perceived as strong generate higher EBIT margins than brands that are seen as weak. EBIT margins are the ratio of earnings before interest and taxes to net revenue earned. EBIT evaluates how profitable a company’s sales are over a certain period of time.
A strong brand impacts marketing, lead generation, closing rates, average prices, lifetime customer value, and similar growth metrics. These metrics affect the bottom line and help the business grow.
4. Brand Equity Increases the Company Value
A Harvard Business Review study measured the relationship between brand perception and company performance over 16 years.
The study concluded that corporate brand equity is responsible for an average of 7% of market capitalization, with the number being around 20% for industry leaders.
So B2B companies should invest in brand development as, depending on the amount of market capitalization, even a fraction of brand equity can mean hundreds of millions of dollars in value.
As such, if branding is so important in the B2B sector, how does your business develop a strong brand that builds emotional connections and drives business growth?
How to Build a Strong B2B Brand
While the process of creating a B2B brand is not very different from that of B2C brands, the specific steps vary slightly.
There are 3 core steps in creating a brand:
Execute these steps effectively in the B2B sector to create a powerful brand.
1. Define Your Brand
Make sure your business knows what brand image it wants to pursue. Write down the style and goal of your brand to clarify how you want your brand to be perceived by customers.
Build a Customer-Centric Business Model
McKinsey’s research says that companies need to talk to their customers to understand them better, yet they rarely do so.
In fact, honest and open dialogue is the most valued attribute for B2B customers to perceive brand strength, but B2B suppliers don’t always realize how important communication can be.
Below is a chart outlining what companies perceive as important for brand development compared to what buyers believe are the most valuable components of branding.
As seen, customers value open dialogue with businesses over anything else while businesses consider product sustainability to matter the most in branding. The contrasting answers demonstrate how businesses and customers have a disconnect when it comes to branding priorities.
But it is not just enough to understand consumers. You need to keep them at the core of your business and brand.
Communicate often with your customers, understand their real problems and what they need, and build your offer to help them solve their problems. This communication will build a good customer-service reputation for your company as you listen to consumer needs and provide value.
Know Your Story: Unique Proposition, Purpose, Mission, Vision, and Values
B2B customers can’t differentiate between the benefits of suppliers. The CEB study asked its respondents, “Do you see a real difference between suppliers and value the difference enough to pay for it?” Only 14% answered yes.
B2B suppliers value transparency and a match in values with their customers.
Thus you need to identify your mission, find your competitive positioning, and a story that defines your brand. Share the vision of your company with your customers, know the values that define your business, and create a powerful narrative to stand out from the competition.
For example, a UK-based software provider, launched a campaign for 220,000 prospects, using the concept of fairy tales. The provider wanted to establish a brand story as a solution-provider for real problems, while their competition would be seen as selling a fantasy.
An illustrative approach was used to narrate the story, and all the content was similarly adapted:
The distinct artistry and theme stand out in the crowded B2B market. The provider created a great visual story that also supports their brand.
Provide Emotional Benefits
When emotional messaging decreases in the B2B sector, so does purchase intent.
In fact, especially in the B2B world, people buy a product or service because of how it makes them feel. According to the previous CEB study, B2B buyers are influenced 2 times more by emotional and personal values than business values.
B2B customers are also 8 times more likely to pay a premium for comparable products and services when the personal value is present.
Business values refer to functional benefits like business and commercial outcomes, while personal values include emotional benefits like being a better leader, attracting more respect and admiration, and feelings like confidence, happiness, and a sense of achievement.
So irrespective of how great you think your product is, focus more on the emotional benefits because those benefits eventually shape the purchase decision.
2. Design Your Brand Image
Every brand should have a distinctive visual style attached to its site and content. This look will allow customers to associate your brand with a consistent buying experience.
Create a Memorable Corporate Identity: Logo, Color Palette, Look and Feel, Personality, and Tone of Voice
Once you have identified your story, you need to bring it to life through unique designs, color palettes, and communication styles that perfectly reflect your brand personality.
If you can move away from typical designs in your industry, it will help your business stand out even more.
For example, in a world of serious SaaS brands, MailChimp packs a fresh flavor with its fun, cheeky personality, light and colorful designs, and friendly tone of voice.
Freddie the Chimp adds an element of playfulness to the brand that makes MailChimp memorable and distinctive.
Create Impactful User and Customer Experiences (UX and CX)
Almost 20% of B2B customers experience problems with suppliers, but out of those, only 40% believe that the supplier solved the problem. Further, only 5% of those customers say they are “very satisfied” with the way the company handled the problem.
In order to retain loyalty, you have to provide good user experiences and handle user problems efficiently. These factors should be integral elements of your brand design.
3. Message and Communicate Effectively with Your Customers
Businesses should integrate effective messaging systems that increase customer interactions and engagement. Communication can affect how your brand is perceived and reviewed.
Create Clear, Powerful Messaging That Further Engages Customers
B2B customers with high customer engagement scores achieve 50% higher revenue/sales and 34% higher profitability.
However, only 29% of B2B customers are fully engaged — that is, emotionally and psychologically attached to the companies they do business with. Meanwhile, 71% of customers are relatively unattached and open to switching.
Besides providing supportive customer experiences, you also need to create distinct and emotional messaging that makes an impact on your customer.
HP, the technology company, used the power of Hollywood and film-like stories of cyber villains to highlight the vulnerability of company data without using the proper security measures.
Cautioning businesses about the aspects they need to be careful about is a value-add in itself, driving brand engagement for HP.
Consistently Provide Value Through Content
75% of business executives are looking for content to help them research business information. However, 93% of marketers focus their content on selling products or services.
To establish thought leadership and generate future leads, your business should create valuable content for each stage of the customer journey.
Whitepapers, ebook downloads, case studies, newsletters, have all been shown to indicate brand value and generate leads, with the most powerful source being webinars.
Consider Partnering With Relevant Influencers
Your brand messaging can also be complemented by powerful personal brands who already stand for specific values, trigger certain emotions in people, and have their own fan followings.
For example, American Express partnered up with the influential blogger and interior designer, Emily Henderson, to give tips to small businesses about creating an impactful store experience.
Emily Henderson acts as an advocate for American Express and exposes American Express to her own following, who value her opinion highly.
Build Your B2B Brand to Grow Your Business
Your B2B business proposition is not enough to grow your company, even in the B2B sector. You have to build a distinctive story to help your customers connect with you.
Your brand is one of the most critical elements of your B2B business. Grow your customer relationships to make your brand strong. A powerful brand will increase your business revenue and value. Hire a branding company to support your vision for your company.
About the Author
Poulomi’s motto is: Be #PowerfullyYOU.
She is on a mission to help entrepreneurs and businesses identify their unique, powerful stories with brand strategy, messaging, and content marketing, so they can connect with their audiences and grow their businesses.
Having traveled to almost 50 countries and lived and worked in 5, she brings a lot of international experience from well-known brands like J&J, Vodafone, and L’Oreal, in her work.
Connect with her on social media and check out more of her posts and videos.