Just last week I spoke to the Association of National Advertisers and Business Marketing Association (ANA/BMA) about the eight economic advantages to branding a B2B business. Look for Boardwalk’s white paper on the subject to be published soon. The more I think about the neglect most B2B firms show towards their brands, the more I’m convinced it’s a national tragedy. By far, most B2B companies are small and middle-market concerns, privately held, often family businesses. The people who run these businesses are the very best of us – innovative, entrepreneurial, risk-takers, hard-working job creators and community builders. It pains me to think, after all the value they create for their customers, their employees and their communities, that they end up failing to get all they’re worth when it comes time to exit their companies. Without serious attention to building brand value over the life of the company, these well-deserving people end up leaving loads of money on the table. And, as branding professionals, it’s our fault.
Because there is no universally accepted definition of the word “brand”, those of us who work with brands all bring a slightly different meaning to the word. To an intellectual property attorney, a brand is a trademark. To a publicist, a brand is a reputation. To a graphic designer, a brand is a logo, a visual identity or packaging. To the clients that we all share, we sound like a Tower of Babel. Is it any wonder they find branding inscrutable and confusing? They can hardly be blamed for adopting a healthy dose of skepticism about any ROI they might see from engaging us.
So, most owners and managers of B2B brand assets turn their attention to the things they do understand – the nuts and bolts of running their businesses. They didn’t hear about the studies done by Brand Finance, Plc, indicating that brand value may contribute up to 70% of a business’s overall value. Now, for a B2B concern, 70% may be ambitious but even lower brand valuation is worth pursuing. The brand value of General Electric, a B2B colossus and the 10th most valuable brand in the world, contributes only 13% to GE’s overall worth. But GE asserts that their brand drives awareness, interest, demand and, ultimately, revenue. Revenue is a good thing. And, by the way, it’s nice to have that extra 13% on the books because, for GE, that amounts to an extra $37 billion in value!
If anything, B2B brands may be even more in need of strong brand strategies than B2C. After all, they usually deal with extremely long and complex buying processes, with multiple decision makers, all with different levels of influence over the buying decision and motivated by a variety of emotional drivers. They also often operate with extremely thin margins and have a clientele that puts lots of downward pressure on those margins. And that clientele, always wanting things cheaper, also always wants higher quality. The result is most B2B businesses are in constant threat of commoditization. The beauty of having a strong brand is it gives buyers a compelling reason to prefer the branded business over the unbranded one. A B2B business can finally rise above being a commodity and begin to dictate influence the terms of its relationship with its customers.
Owners and managers of B2B brand assets must ask themselves how much an extra 13-70% in valuation might be worth to them when it comes time to exit their businesses. Or how much that additional valuation might help them, right now, with financing or other operational concerns. Or how much additional revenue might be driven by a strong brand strategy if that was already in place this year. I ask my startup clients, only half in jest, that if their brand can, ultimately, represent 70% of the worth of their company, shouldn’t they be spending 70% of their time working on their brand?
It’s estimated that 72% of all businesses in the US are B2B companies. Yet, according to Forbes magazine, only 16 of the top 100 most valuable brands are B2B brands. We branding professionals have to do a much better job of communicating the value of brands to our B2B clients, What’s more, we need to help them drive up that value.
Best Branding Reads – Week of August 1, 2016
Rio 2016: Athletes and Non-Sponsors Rebel Against Olympic Rule 40
Best of luck to you-know-who at you-know-where from we-can’t-say.
20 Motivations That Drive Brand Loyalty
Why do people even care about brands? Why do some fall in love with them?
Tech-to-Table: How Will We Create the Food Brands of the Future?
I’ve seen the future and it is … tasty!
Brand Admiration and the Power of Love: Build a Brand That People Adore
More on how and why people fall in love with brands.
New Logo and Identity for Race Against Dementia
A brilliant solution to an identity challenge. Just brilliant!
Label-Defying US Olympians: 5 Questions with MINI’s Tom Noble
I’m a MINI driver and huge fan (see my first here: https://www.boardwalkhq.com/about-boardwalk/) so I’m including this.
Building A Cult Status Brand Without The Basics
Sriracha breaks every branding rule and becomes a classic cult brand.