When a customer buys a product or service from a company, he is not just making a transaction. He is actually starting a relationship with the brand. It could be a one-time purchase or a long term relationship. Surely, companies aim to establish long lasting ones and then build brand loyalty. This is especially important for B2B companies. The amounts of each B2B purchases are usually much greater than B2C ones, because instead of buying products for only one consumer, they are buying for teams, departments or perhaps their whole company. Or they could be buying something that is directly related to the final products such as supplies that will be part of products or even the equipment that will do it so. When stakes are high, risks are high. For these reasons, procurement has become a strategic and complex process in buyer companies. That’s where brands are turn into competitive advantages.
Let’s suppose you are a procurement manager at a hospital that wants to buy a magnetic resonance machine. Among the companies you spoke in the past month, two presented products that are a good fit for the needs of the hospital. The X Solutions, a two-years old company, has a slightly better offer in terms of price and delivery date. However, the other company is Phillips Healthcare. Which basket would you choose to put your eggs in. You might not know that Philips is among the 25 most reputable companies in the world. But you probably agree that Philips brand is more trustworthy than X Solutions. At the end of the day, even with a less appealing offer, you will certainly rely on Philips’ heritage on technology because you know that the risks would be higher with X Solutions. Even when a company has a technological advantage over competitors, brands can play an important role. For instance, when Philips develops a new product, it has limited time to convince buyers to buy it before some other company copies its technology. Although a new technology might present risks, physicians and hospitals can rely not only on the reputation of its corporate brand, but also on the association it has with quality. Nonetheless, sometimes having a brand with good reputation is not enough. How a brand is positioned in the prospect’s mind also matters. That is, a brand means something for its customers (and other stakeholders). Once it means that thing, it can’t mean something else at the same time. It’s simple like that. In other words, when a brand becomes strongly associated with a product, customer profile, industry, or some other thing in the prospect’s mind, it is extremely hard to embrace other meaning. Xerox learned it the hard way. In 1969, when it made an acquisition to enter into the computers business and decide to incorporate it under the Xerox brand as Xerox Data Systems, it was actually trying to amplify the meaning of the Xerox brand. The company ended up finding out how expensive and unsuccessful it was to convince people that they should buy a computer saying that “This Xerox machine can’t make a copy”. It culminated in the cease of computer operations, writing off $84.4 million.
Better communicate offerings
B2B marketing is also known for having more reliance on personal selling. So let’s go back to the example of a procurement manager that wants to buy a magnetic resonance machine for a hospital and has two similar offers from different companies. On one hand, the sales person of the X Solutions then gives the manager a lengthy explanation of the additional services his company offers. The manager feels overwhelmed with so much information that he needs to memorise. On the other hand, the salesperson from Philips does the same, but quite differently. He first presents DoseWise, a set of solutions to help hospitals manage radiation dose across patients and staff. Then he shows how, with SmartPath, the hospital can keep its equipment updated with the ultimate technology. See the difference? Many times, B2B companies have complex products and services, therefore brands can be helpful in better communicating offerings.
Companies can brand services, technologies, events, loyalty programs and even ingredients. In today’s world, copying is easy. However, when your offerings provide branded features that add value, the copying process becomes much harder. And these brands don’t always need to belong to the company. Often companies achieve competitive advantage by partnering with others to come up with cobranded solutions for their customers. Furthermore, setting a brand architecture that suits the strategy of the B2B company can also be beneficial. It establishes the structure of each brand and the relationship between themselves. When it is well done, the brand architecture should clarify how brands such as core brand, sub-brands, endorsed brands support and/or complement each other. Thus, it should enhance the customers’ understanding of your offerings. For instance, although 3M has different brands over its umbrella, it uses its core brand 3M to endorse them. So even if a buyer doesn’t have much knowledge about a brand, he will see the 3M endorsement convey associations such as quality and innovation, and feel confident choosing it.
Matter to final users
If a company is selling to another company, it does not necessarily mean that the final consumer won’t be affected by this transaction. In fact, strong brands that are relevant to final consumers will have a competitive advantage over others, especially if what is being sold represents a component, feature or ingredient of the final product. One of the most known cases that illustrates that is about Intel Inside brand. After failing to trademark the numbering system used to name its microprocessors, in 1991 Intel decided to combine the pushing effort of advertising to convince computer firms such as IBM and Compaq to carry the Intel Inside logo on their packages and ads. Even though people didn’t know what microprocessors were at that time, this campaign made consumers sensitive to a component of the computers. It also enabled Intel to positively affect its brand equity not only by being the ‘first’ microprocessor to be ‘formally introduced’ to final consumers but also by being attached to well-known computer manufactures.
If you are a person, you have a brand: your own personal brand. However, when you decide the company you want to work at, you should care about what the its brand stands for and whether it relates to your own brand. Moreover, working for companies with high brand awareness, makes a difference at your resume. I’m sure commenting that you worked at Intel will give you more credibility when talking to recruiters than saying you worked in a company no one heard about. For companies, attracting talents is not only about having the best skilled employees, but also finding those who are the best fits for the companies. And that’s no different for B2B companies. Therefore, they should be interested in building their brands as employers. That doesn’t mean just making your brand recognizable. More importantly, B2B companies should worry about conveying their culture. In order to achieve that, companies can also count on brands. As an illustration, Phillips developed a branded program called Innovation and You to tell real-life stories that translate what its culture is all about. This helps the company to show their unique culture that sets itself apart while generating goodwill from potential employees, shareholders, society and so on.
Define what’s next
Branding is also about self-discovery. The B2B companies that don’t understand well their brands, can’t define what’s next. It seems pretty intuitive to know about your own brand, but many companies don’t put any effort on finding it out. The role of those responsible for managing a brand is to align brand identity to brand image. In other words, their job is to align how a particular brand is intended to be seen and how it is actually being seen. For instance, if Philips brand is not being associated with innovation, they have a problem. The company will then assess why this association is not being made and what they could do to make it happen. Furthermore, although core identity elements of the brand should not be modified to keep consistency, there are elements that are part of the extended identity that are more flexible. Unlike the core identity that is representative of timeless elements such as fundamental beliefs, major competencies of the company and what it truly stands for, the extended identity adds elements that provide completeness and texture, therefore adding more details to the big picture of the brand. In the made-up example about Philips issue with innovation association, which should be a core identity element, the company could consider adding the element heritage to the extended identity. Although in this case heritage is not a core element, it will support the core element innovation by communicating how the company’s heritage is related to innovation. In short, if a B2B company wants to play the future of its corporate brand or other brands it possesses, it should first take a step back to actually learn about it. That doesn’t mean just write down what they think of the brand identity. It should include the opinions from employees, customers, partners, shareholders and others that will set its current image.