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The Eight Benefits of Branding – Part 6, Price Resiliency

May 24, 2016

cutprice.jpgMany managers of B2B businesses feel they don’t need to brand their product or service. They can understand why B2C offerings need to invest in branding but, for their own purposes, they see no reason to invest so many resources to what, they presume, will do little to move the sales needle. After all, they argue, in many B2B situations, the number of customers is relatively small. Easier to reach them all with old-fashioned methods like cold-calling and door-knocking. This attitude betrays a fundamental misunderstanding of what a brand actually is. And those who hold this point of view will never derive value from one of branding’s key benefits – price resiliency.

When you take the trouble to do the work and really articulate a brand strategy, you’re making a business case for why your company, product, service – whatever – should be positioned in a particular way. You’re aligning to match your offerings to that segment of customers that only you can serve well. You’re demonstrating an authority or competitive advantage of some sort. You’re standing apart from the crowd in the best way possible.

What this means is, you’re giving your customers a reason to buy from you. Perhaps you position yourself as:

• the original solution
the most responsive
the most innovative
the most effective use of technology
the most customer-centric
exclusively serving the (geographic area) region
the largest fleet of trucks
specializing in (niche market)

One could go on and on. Every business will have its own unique differentiator, its own competitive advantage, its own reason the market should find it attractive. It’s just a matter of sleuthing out that reason and spotlighting it. But here’s one differentiator that no business should ever claim. Never position yourself as the least expensive solution.

Why? Because market forces are always pressuring businesses, especially B2B businesses, where margins are notoriously thin, into that position. Who hasn’t had a customer ask for a discount or threaten to bolt for a cheaper solution? Price is always going to feel downward pressure.

Your job, when making your brand promise, is to give your customer a compelling reason to buy from you even though you’re not the cheapest option. If your customer has no other reason to buy from you, you will have to compete on price alone. You will become commoditized. And that, really, should be enough to motivate you to develop a brand strategy.

When the market takes a downturn, weak brands have to cut their prices just to stay in the game. That's particularly dangerous in B2B markets, where margins are usually thin to begin with. Well-branded offerings can resist downward price pressure because they attract customers who will justify paying a little more. Usually, a strong brand promise is all the justification they need. Ask yourself, how would your customers justify it if they had to pay a little more for your offering? That’s your brand.

Best Branding Reads – Week of May 23, 2016

What Snapchat Has Shown Brands and Publishers About Vertical Video
Snapchat and other mobile apps are changing the way we watch – and shoot – video. 

What Leading Brand Thinkers Really Think #01: Simplicity
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2016 Logo Trends
Is your logo on-trend? Should it be?

How Stories Shape The Meaning Of Brands
Once upon a time, there was a brand that set off on a journey.

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Tags Positioning, Strategy, Added Value, Price Resiliency

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