John, I’d like to address your question of “why should brand-building be important to B2B CEOs?

Each of your points is valid, and I’d like to add a few of my own:

Fourth, selling through the channel requires a strong brand. Channel partners need a brand to promote as they (almost never) have a brand that businesses want to buy from. Business buyers are comfortable buying from a channel partner if they represent a brand with which the buyer is familiar.

Fifth, the brand is the tip of the arrow of marketing. A strong brand enables the rest of the marketing (and sales) to get through to the buyer. The business buyer needs to know who the company is before they’ll pay attention to what they have to say.

Sixth, a strong B2B brand enables a higher margin because the “brand promise” provides a lower risk to the decision maker, and enables that decision maker to justify their decision to others – because the brand is familiar to them as well. “Nobody every got fired for buying from IBM” is the ultimate brand promise.

Seventh, a poor branding effort creates a poor brand promise. For example, Phil Mickelson (sponsored by BearingPoint) is probably the second best golfer in the world. BearingPoint, therefore, is associated as being the second best. Accenture is associated as being the best. Which would you want to buy from?

Yes, it is essential, and yes, it should be done much more than it is done today.

Sir,

While I fully endorse the need for B2B brand-building, please permit me to look at the examples cited from a slightly different perspective.

Intel's phenomenal success can probably be attributed to two factors: the waves of innovation that have enabled the company to drive markets, and its single-minded focus on the CPU, the core product of a computing device. With an increase in the application of microprocessors, even Intel has been forced to look at brand extensions - Xeon and Itanium being examples beyond Pentium.

Similarly, even though Microsoft has a portfolio of applications to offer, its success can probably be attributed to the heart of a computing system from a software dimension - the operating system.

Though not as spectacular, Canon's expertise of the laser drum (the core of a laser printer) and Honda's superior efforts in engines (the core of anything from lawn mowers to trawlers) are other examples that can be mentioned.

Which rises two questions:

1. Do not these examples take us back to the concept of concentrating on the core product as opposed to the final product?

2. In the case of companies like Dupont and Xerox, hasn't the fact of the Brands becoming generic brands (I wonder how many of us still say - please photo-copy this for me) diluted the value of the brand? In other words, can there be a deterministic model to guide a company to stop using a Brand name for everything (the case of Chevrolet immediately comes to mind) and start creating new brands? Or should this be a matter of intuition or gut feeling?

Your sage comments on these questions would be highly appreciated.

Warm Regards

John,
Excellent five points, and a lot of common sense. Of course, as a former CMO of a $3 billion+ B2B company, I'm tempted to ask what many of your other professional readers will ask: Why is such common sense so difficult to implement at so many B2B companies?
In part, I think it's because, historically, B2B marketing is NOT marketing, but rather is a collection of communications tactics, dominated by plain-vanilla media relations, unresponsive to any sense of marketing strategy.
This tendency presents a challenge to B2B marketers. The Web collapses a wall between B2B and B2C marketing. Among other things, price comparisons are easier to make, raising the importance of consistent and consistently implemented brand values across product lines and geographies.
And as you point out, the sales force actually diminishes in importance, as the Web requires B2B companies to employ its global scope to reach out to existing and potential customers through multiple marketing-communications devices -- for if they do not, their competitors most surely will. In other words, the Web, in essence, puts all companies in a marketing arms race in their sector. Like conventional arms races, the response cannot be simply to spend wantonly. The smart B2B marketer must develop a focused strategy on why, how, where, and on what to invest marketing dollars.
I believe there's at least one more reason for B2B CEO's to pay attention to marketing: On the Web, marketing can link much more clearly and cleanly to the supply chain. Configuration site responses, requests for additional information, blog postings and the like can act as early warning systems, alerting companies both to crises and to opportunities. The ability to link marketing data to the supply chain thus can have significant cost and customer service implications.
Separately, might I invite your readers to peruse the Interactive Advertising Bureau's relaunched site (www.iab.net) and my blog (www.randallrothenberg.com) for ongoing updates on the worlds of interactive media and marketing? Hmmm... I guess I just did.

Do you think brand-building is essential for B2B companies? Have you seen other characteristics of leadership in smartly branded B2B companies?

Yes and Yes.

In fact this is all we (www.imageworksstudio.com)do. SMEs especially need to focus on their total user experience, and in most cases this ends in a web visit. We believe strongly that all aspects of your brand need reinforce your band “language” and make a compelling argument as to why a prospect should consider your products and services.

Great info, I enjoyed and learned from the article.

Scott C Margenau

John,
The characteristic of smartly branded companies I see, conflicts with your point number three (Efforts are focused on a single, global corporate brand rather than individual product brands). And that has to do with the idea of a strong "House" brand versus the combination of a House brand and Product brands as a Brand Structure. The example I would like to present is Goodyear Engineered Products, formerly a division of Goodyear now owned by a private equity group. The new owners are able to move forward without the global corporate brand because Goodyear Engineered Products division spent a lot of money promoting individual product brands.While channel partners and end users may not be completely sure they will get the same quality product as they have in the past, at least the new owners have a foothold on the implied promise of quality. If a brand is an identifiable entity that makes a promise of value, why would any company not see that they are multiple entities? That is the company and it's products, unless they only have one product.

the article proposes 6 characteristics and only describes 5.

is this an error or is it the missing ingredient of B2B brand building?

John’s article is great. As a long-time B2B marketer the findings are dead-on with what our firm has known for years. I have found points one and three to be vital for any B2B marketer’s success.

Over the past year or so there has been much more interest in point four. Much of this is because now, more than every before, there are tools available to help mid-size B2B companies track marketing ROI. Clearly the role of the web has made this easier and will continue to impact how B2B marketers get their job done.

On top of that Web 2.0 technology (i.e. blogs, podcasts, RSS feeds, social media) should not be left to B2C marketers. We recently reported on a B2B journalist study we conducted that showed Web 2.0 usage among this group is rapidly growing.

With B2B journalists embracing user-generated content like blogs, webinars and podcasts as useful in their day-to-day reporting savvy B2B companies should be looking for ways to legitimately increase their participation in creating and growing online content using Web 2.0 methods.

Again, great article John.

Kudos for your focus on B2B brands. My comment focuses on your point #3, that "Efforts are focused on a single, global corporate brand rather than individual product brands." In my experience, this "branded house" approach offers the greatest competitive benefit, regardless of the inevitable challenges of harnessing people (the brand messengers, indeed) across all regions of a global firm. For many of my B2B and professional services clients, a significant percentage of the marketing function is devoted to tactically managing the brand to maintain this singular focus.

But here's the rub, even for the largest B2B companies: devising a brand strategy that appeals broadly to all audiences, (with widely varying influences - cultural , geographic, etc.), while still achieving a significant level of distinctiveness. Because the arena of B2B branding is still young, it's easier for the "early branding adopters" like Accenture to look like brilliant strategists. In this case, Accenture's "Performance Delivered" brand message is akin to "mom and apple pie" (what's not to love about that?). One doesn't have to look very far to see other B2B and professional service firms developing brand strategies that appear to be variations on this theme. The difference, so far, is that few of them have had the stomach to invest as significant a percentage of their resources in promulgating the brand message as has Accenture.

Inevitably, B2B and professional service firms will have to address deeper questions about the uniqueness of their value proposition (their true differentiation), or build this distinctiveness if they haven't got it already.

THEN we will begin to see who are the real leaders in global B2B branding.

I agree with everything John Quelch writes, but I'd like to clarify further. Revenues notwithstanding, most CEOs view marketing as the domain of consumer good brands because it is usually the consumer marketing efforts that drive most brand equity enabling more revenues to be generated on the B2B side of the business. Until marketers understand that, in the end, it is with people, not businesses where brand equity resides and ultimately where sales are made, we will continue to have B2C and B2B contrasts.

Would really appreciate if more comprehensive articles are published on B2B Branding & Marketing. A lot of materials and even experiences of many agencies are focused on the B2C segment.

I agree with the importance of branding in B2B. I would like to contribute to the conversation by stressing that in most cases, companies dealing in the b2b realm have little of no connection to consumers. For instance Caterpillar, John Deere, Atlas Copco, ABB, or Komatsu to mention few.
In such cases, purely b2b brands but not ingredient brands, represent not only a product or a service but a solution to the customer's needs.
It is well known that in business markets the price weights less than in consumer markets in the evaluation of offerings. Thus, the value attached to the brand is criticall in winning the customer's preference.
My experience in the area tells me that this type of companies manage their brands very well.

Thanks for this very interesting article John.
As a matter of fact, even at the small scale of a young start-up, we are convinced of the need to establish quickly and strongly our brand franchise.
Our competitors are stronger and older...but do not communicate "above the line".
Thus, we decided to communicate via print ads in French leading professional reviews after having worked throroughly our copy strategy.
We already benefit of positive impact on our sales and awareness.
Jean Préau - Managing Director of B.L.O, the Below the Line Observatory - Paris

Hi John: You are absolute right B2B Branding works. Phil Kotler published with me a study where we found a strong correlation between B2B Brand Performance and Stock Market Performance(Philip Kotler, Waldemar Pfoertsch: Being Known or Being One of Many - The need for Brand Management for Business-to-Business (B2B) Companies, Journal of Business & Industrial Marketing (JBIM) Fall 2007, but there is much more to consider (see Glen's comment). We also published a trade book: B2B Brand Management ( http://www.amazon.com/exec/obidos/ASIN/3540253602/wwwpfoertscco-21/ ) which can give management interesting some more hints and shows case studies from companies around the globe. Currently we work on B2B brand measurement topics, particularly for ingredient branding. The next issue is how to steer a company along the branding alley. The Chinese CEOs are very much interested in this topic.

Regards, Waldemar Pfoertsch CEIBS Shanghai

I agree with the statement that B2B organizations should consider the importance of brand, and also agree with the reasons why (especially the first one involving story). I would, however like to propose that brand, rather than being a marketing entity, is a broader result of the organization's beliefs and actions and the repercussions when those two things don't align can have potentially more dire consequences than a fragmented customer view.

While we hold onto the idea that brand is something that can be "done" to an organization - as intimated by the term "branding", we continue to miss the point that brand is a deeply rooted part of the company core. Making that brand visible and accessible is the role of the entire organization, top-to-bottom and side-to-side, not just the marketing department, unfortunately failure to do so is a much more common scenario. The point made that brand can act as protection for an organization is only true so far as their actions are in alignment with it.

Agreed that Intel was the champion, for advertising in B2B and now accenture has jumped into Band wagon.

Ground Realities remain as there are millions of SME (Small and Medium Enterprises), who constitute the majority of B2B segment, regretfully we dont speak about them.

Best Regards
Abhilash.

John,

A few other examples come to mind. MAS Holdings in Sri Lanka, a company I spent several days with a couple years back, is well-known in its industry. They manufacture apparel for Nike, Victoria's Secret, Speedo and many other well-known consumer brands. Of their many remarkable practices, their 'Women Go Beyond' program is exceptional. It celebrates their female employees (who are the vast majority of the company's staff) by announcing the company and community achievements of the best performers. The selected employees are then publicized throughout the company's many operations, creating a virtuous motivational cycle inspiring others to aim for similar success. Intertek, a UK-based quality and safety services company that certifies products to meet exacting standards country by country, is the market leader in its industry. Part of its success is based on its first-rate laboratories around the world that its customers are welcome to visit. While Intertek produces lab reports and certifications required for companies to sell products in other markets, what they are really known for is comprehensive quality expertise across a range of product classes. SAP, the German software firm, has been undergoing a brand overhaul since late 1999-2000. From dozens of logos, disconnected web-sites and confusing communications, the company worked hard internally to get employees on-board with its market-facing efforts. They hired a CMO, simplified the classic marketing tools, and disseminated their brand program worldwide through townhall meetings and online tools (to service the far-flung field operations). From 2000 to 2005, the brand appreciated 46% in value. SAP has not stopped...their value grew again last year and it is partly due to a consistent focus on branding. Bernd Schmitt, the Columbia b-school professor, wrote a short case on SAP's branding efforts. India's Infosys, which has been focusing increasingly on high value-added services to move away from their low-cost outsourcing reputation. The benefit of branding for B2B companies are just as you point out. Additionally, as an established, reputable brand, a company does not need to educate the market with quite the same intensity as rivals struggling for attention, allowing the branded firm to concentrate on different value-added activities. Furthermore, a well-known brand acts as a filter for customer decision making--only a select few companies make it through the customer filter. Finally, a key reason to invest in branding is to create competitive disadvantage for rivals, forcing them to have to explain who they are and why they are different, while the branded firm can focus on finalizing a solution for the customer and make the sale.

The examples cited, with the exception of accenture, are all companies that market heavily directly to consumers (IBM did with PCs at least). I'm confident that unless a B2B company markets directly to consumers, they will never break into the ranks of the Interbrands top brands.

That being said, B2B companies can develop brands, but it is a process that takes a lot of time and money. In focus groups I've seen time and again that except for the top 4 (IBM, Microsoft, Oracle, and SAP) IT companies have shown have little or no brand recognition among their target buyers who ARE NOT CURRENTLY BUYING. Even BEA, who spent a lot of money on advertising, had little brand recognition.

B2B companies, at least IT-related, need to invest in brand-building activities, but not assume advertising and sponsorship will help bring prospect inquiries. These companies need to rely heavily on sales outreach to make the short list. The brand building activities can support this sales outreach.

Brand awareness should be a part of any company's marketing strategy. B2B companies should be especially aware of this as they move quickly into the global marketplace and service a multi-base of clients. Not only do they become retail oriented, product / service, companies but wholesale oriented as well. Having the ability to communicate a consistent message of who and what enhances the ability of those companies they service to also deliver that message to other peer companies - viral marketing with a consistent message delivered. Even B2B's entering into partnership arrangements with a co-Branding effort should be aware of the consistent and standard message delivery.

Branding is a key factor for any B2B - just as in the mind of B2C [consumers], it plays into providing the customer a source of security. The sales process follows this security level in enabling any transaction - I'm getting what I'm paying for. A strong brand will establish this transactional trust ahead of time, and if strong enough with additional support in experiential form, will provide an incomparable loyalty to the brand as well.

A great example is Monster.com that caters to hundreds of thousands of companies from small business to enterprise. The brand is the foot in the door, the establishment of basic peace of mind for the customer in getting a reasonable deal. They are able to charge premium prices for the security of the brand and the validity that the product will reach many. For Monster, the value is even more important as their main selling point is their reach of job seekers and hence it has a dual value.

So - Yes - Branding is critical for B2B because it sells trust, and in turn, trust sells products and services.

Great post John, however, I'm confused by your question: "Do you think brand-building is essential for B2B companies?"

Like it or not, each and every business activity serves to either grow or diminish the brand in the eyes of ones audience. Brand-building, therefore, is not an option. It's an outcome.

I'm particularly interested in your brief mention of the CMO's role in this relationship.

The CEO's reputation as a brand advocate relies on a well-maintained brand foundation. Like the COO and CFO have their clear driving & guarding responsibilities, the CMO position seems understood as to its delivery to the CEO, but his/her reaching out to external markets is of little mention here (a blog about marketing) and increased scrutiny elsewhere (http://www.boozallen.com/news/659394?lpid=981228)?

Does the chicken-or-the-egg theorem apply here? What is your opinion of the necessity/communicability of having a marketer of C-class stature to maintain and grow the brand? And as the concept of brand is becoming tangible, who should be responsible to expertly communicate with internal and external stakeholders?

I think B2B is in fact the most powerful application of brand principles and it always amazes me when people question its relevance. B2B relationships are often deeper and more committed and the stakes are higher - so the impact of a strong brand can be significant. In addition there is so often a break-out opportunity for B2B brands because of the commoditization that develops over time in these categories. If you stretch the definition of B2B to include professional services the same opportunity exists - create a stand-out story in a me-too business.

It can challenge the brand orthodoxy, but there is an art to defining the corporate brand and the end-consumer brand (if required) in different terms. For example, in dairy, where there is very little consumer brand loyalty, the battle is in the channel for retailer commitment. Here, brands that promise retailer business performance can score higher than brands with consumer recogntion. You need to keep the corporate and consumer brands connected, but delivering on different values.

Great stuff. Thanks for the post.

The companies that you mention are huge organizations with huge marketing budgets. The marketing budgets of small B2b companies (and there are many of us) are torn in many directions. It is a bit of a Catch 22. If you spend your marketing dollars trying to get found under a product/service search and sacrifice your branding dollars then customers won't remember you. If you spend your marketing dollars on branding but never get found then the branding is wasted. The real trick for small business is growing the business and creating a brand all at the same time.

Why should brand-building be important to B2B CEOs?

brand building helps in creating awareness among business community eg word of mouth, advertising, billboards

business to business easily can be promoted through internet rather than through advertising at initial stage. it is so because companies ceo browse internet regularly to see their websites .

where should these advertising internet b2b should be adopted

these should be adopted in b2b company websites and job portals

the reason being b2b companies ceo regularly browse both company profiles and job portals to select candidates for their respective companies

Good discussion. I have to agree with Mike Hogan, however, that the flavour here seems to suggest a brand is something you paint over your business rather than the collective impact your business has in all the ways it touches your customers. In that sense B2B is the same as B2C.

In fact, B2B must rely far more on actions than words. B2C is more likely to be able to push through on the weight of strong promotions - where people go with the herd/heard/heart. In B2B, however, decisions are more likely to be rationally reviewed or shared and performance compared to expectations.

I am interested to see this changing for B2C, though, as a consequence of social media. As discussion on brand performance becomes broader, and easier amongst users - businesses will have to rely more on honest delivery and not just "brand" promotions.

BTW, where's John in this thread? How about some dialogue?

Best regards and thanks for the article.

The article is excellent, and touches upon many good points. My only "caveat" is that it still treats "brand" as something a bit on the superficial side — a look, a voice, a consistency that runs across the company culture and concentrates its image.

We (and I personally) believe that the brand runs far deeper than that. To be truly meaningful in an increasingly-competitive marketplace, the brand should reflect, either directly or subtly, the true benefit a company offers its prospects as a distinct point of difference from the competition.

Certainly, there are situations in which a freshened-up identity and consistency can help. But in many, if not most, B2B situations, the products are even more likely to be seen as a commodity by prospects. The most important (and perhaps most difficult) work in those cases is the identification of, or even creation of, concrete "reasons to believe"-- a positioning that is earned, and not merely claimed. That's what we do, as a company, and it has opened the eyes of (and proved valuable to) many clients.

In short, the B2B CEO had better care about branding, if only because it makes him or her more likely to address the more important issues that lie beneath that issue.

Okay, so we agree that the Intel stratgy was very successful. I am the CEO of a small manufacturer of sports licensed furniture. We have very little money to put toward direct to consumer marketing. What can we do to build brand awareness in the consumer's mind and drive business to the retailers who carry our product. You can see examples on our website at teamblg.com.

Thanks,

Gary Roberson

@Gary - make sure your products are the best in the market and distinctive for end customers but make sure your retailers know your brand. Your end customers are already experiencing the store brand and the team brands - don't expect them to see through to your company. When they rave about your products and their friends go to the store to buy, then they will be sold on your benefits. The B2B bit is your relationship with your channels - make it solid and consistent in all you say and do with them.

The problem is not that B2B businesses don't want to build strong brands , the problem is- mostof them don't know where to start .

To build a brand you have to have something to say, to say something of importance you have to have the passion or the results to back you up...

Accenture & IBM have years of heritage behind them, because of which they are considered masters of their realm and now they attract the best business, the best talent and so on... so it has now become a perpetual cycle.

What do relatively new B2B brands do when they neither have the spend power nor the heritage and not even a compelling story to begin building their brand ?

i have seen this ranking and although its the biggest in the world the methodology they applied there seems to be quite strange first of all because they include costs in the equation.. i am not sure if i understood it correctly but the value of brand looks like sth like EVA minus the value of patents.. very strange though names of companies mentioned really look like strong famous brands.. i would measure brand strength from the bottom line like better growth or smaller defections than on averege in case of some crisis??

continuation..

according to me this ranking demonstrates only well managed companies (after patents etc.)

e.g. in accordance with Interbrand methodology Gm and Ford could never be listed in that ranking and Toyota is quite high what is due rather to their cost management capabilities or very innovative processes more than brand.

i think they made some simplified assumption that any part of margin except of patent value or this management strength etc. is attributable to brand (but why did they deduct tax from revenue then?)