Brand & clear defendable territory in the B2B world: a 3 part conversation

1. The rising value of brand in business

Brand is fast becoming a commercial conversation rather than a marketing conversation.

First. Brand sells. A recent global Fortune / McKinsey study puts brand at 20% of the decision making factor, whereas sales comes a close 2nd at 17%.

Second. Brands are rising assets. The top 20 business brands are worth near £350 bn, up 86% since 2006 (2014 Brandz Report, Millward Brown).

And third. Brands that are strong perform better. B2B brands perceived as strong outperform weak brands by 20% (McKinsey, 2012)

2. Clear, defendable territory

The Clearing thinks of brands as competitive & commercial entities rather than corporate identities. We build them to capture value, establish a position and hold their ground. That all starts with an identified market opportunity – establishing what we call Clear, Defendable Territory – which is where you then build and invest in your brand.

It’s so important for B2B brands to find this space, as buyers are more sophisticated and competition is coming from everywhere.

How do you know when you have clear, defendable territory? It must deliver maximum value, be differentiated, and be based on a legitimate claim to that territory.

First, let’s talk about value. Revenue is fairly straightforward – will a lot of people pay a little money or will a few people pay a lot? The real challenge with value, particularly in B2B, is to shift people from commodity buying to a deeper reason to buy. It’s the only real way you won’t be at the mercy of the market… where it all comes down to price.

This is where the market needs radical change. The conventional approach of face-to-face selling and a competitive product USP only really works when you have a small universe of similar competitors that say we’re better, not different.

If you ask the people buying, 86% of customers don’t see a real difference between suppliers. (CEB Study, 2012)

Nearly 60% of a typical purchasing decision—researching solutions, ranking options, setting requirements, benchmarking pricing, and so on—happens before even having a conversation with a supplier (Harvard Bus Review 2012)

That’s not today’s reality where most products are commodities, buyers do their homework and every market can be disrupted.

You have to ask what people really value. No market is perfect, so find the frustrations, tap unserved ambition and create value there.

Second, you must be differentiated. As we discussed, the days of the USP are gone. And there’s a void between what businesses should be talking about as different and what they actually talk about.

Almost all of the five things buyers want to hear are under-communicated: honest open dialogue, acting responsibly, fitting with my values and being a leader. Instead, specialist experience, product portfolio and being a driver of innovation are repeatedly over-communicated.

Focus on the values of the business not the products, the collaborative listening not the broadcast, and what to expect in the future, not what you’ve accomplished in the past.

Finally, let’s talk about legitimacy. Because if you can’t defend your territory with vigour, there’s no point in going there. What do you do, how do you behave, what beliefs do you hold that are true and different about you? And whatever that answer, it must resonate and be meaningful for your customers.

Do you have an unlikely love for building machines, like Cisco? A smarter way to bring expensive technology to the little guys, like Amazon? A work ethic that helps partners win, like McLaren. Or even a belief that design should be open, like GE.

At the end of it all, clear, defendable territory gives you direction for the brand. It clarifies where the value lies and sets out a space you can legitimately own.

3. B2B buyers are people, too

People, whether they’re shopping for shampoo or an IT supplier, rely on their instinct first and post-rationalise using their intellect second. It might sound controversial against conventional wisdom, but it’s the emerging and evidenced truth.

It was a fair assumption to think that serious and successful business decisions were made in the way we think business is conducted: rationally and analytically.

But we don’t leave our emotional brain at the door when we step into the office. So while the process of decision-making might be more committee-based and methodical, it’s no more rational or objective just because we’re at work.

We are hard-wired to look for subtle cues in our choices that deliver a deeper psychological need & benefit: success, confidence, ambition and fear all trump USPs and product features.

Features, functions and business outcome marketing has a 21% lift in perceived brand benefits. Professional, social and emotional benefits marketing has a 42% lift

And the more important the decision – like those high value, low frequency commercial decisions – the higher the role of emotion. We can joke about a bad hair day, but who laughs at a bad career day.

B2B customers are changing:

They’re confident – the seduce to sign approach is fading away. It’s the experts, not the suits, they want to see – they want “a low investment in sale – simple, fast & efficient – but a high investment in solution”.

They’re social – they’re looking at what others are saying, they want collaboration and honesty, and they identify with their choice in suppliers, partners, providers. Brands need to create a conversation.

They’re emotionally invested – in a recent study by Motista, B2B brands typically have emotional connections scoring between 10 and 40%. Whereas 7 of the top 9 B2B brands surpass the 50% mark.

These shifts change how we build relationships through brand and communications. It needs to move beyond the rational ‘ticket to entry’ elements and lever deeper, personal motivations.

Nicole Griffin is Strategy Director at The Clearing.

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