B2B Branding: Symbolism versus Substance.
By Dean Crutchfield
Brand is not marketing: It’s about who you are. The role of business is to create customers through marketing and innovation, but customers have often lost out in the relentless push to maximize shareholder value. As Neutron Jack (Welch) would tell you, “Shareholder value is a result not a strategy. Your main constituencies are your employees, products and customers.”
Whether it’s a Business-to-Business (B2B) or a Business-to-Consumer (B2C) brand, it’s all about Business-to-People (B2P). So as we reap the grim harvest of imprudent lending amidst insider dealing, bankruptcy, accusation, claim and counter claim, misconduct by big brand names and shifting customer and investor behavior has changed the perceived value exchange of B2B brands and transformed the meaning and context of trust. Look at banking; historically banks focused on acquiring, growing and protecting their clients’ assets, lending money and making profit out of the assets under management. Then at the turn of the century the value relationship between banks and clients abruptly changed: it switched to banks trading their own products at the sacrifice of their own clients and overnight the compensation model was based on upon how much money can you make by the volume of products they could sell, not the number of clients they were managing. The outcome we all know.
Trust is a crucial ingredient of all brands and their reputations. Today that contract of trust has been shattered: stocks do not have a memory recall button, but investors and customers do and that’s why fewer than half of all Americans have a favorable opinion of business today.
Compounding the brand fatigue that has besmirched many B2B brands is the belief that customer-centricity can be achieved by entering B2C’s Temple of Mammon and bedecking themselves with happy logos, pleasant typefaces, comforting language, and a library full of stock photography with smiling friendly people to lift them from their somnolence as staid corporations and market themselves as perfect, genuine, complete, crystalline and pure. The irony, of course, is that some of the best B2B brands are anything but sweet and friendly, but they are serious about who they are.
The changes wrought by the financial breakdown will reveal that our notion of trust has dramatically moved on from trust in the company to trust in the people behind the company! It’s about whom do you trust and that battle will be won and lost on the consistent delivery between word and deed.
Today, most organizations commonly refer to the meaning of share in terms of market share, profit share, revenue share, etc. What they overlook, however, is that they are also ferociously competing with other brands for share of trust.
Beauty fades with age and any B2B brand built on image has been found wanting. Tomorrow’s B2B brands need to obviate that trap and be built and driven first and foremost by their “capabilities”. These defined capabilities should dictate the products and services in their offering, the culture of the organization and finally their image to the world – not the traditional B2C way of image first.
To optimize this new era, B2B brands need to first redefine their meaning by identifying who they truly are and why they are in business. This will provide a picture of their future, their organizational style and the direction they need to take. As Jim Collins writes: “All good-to-great companies began the process of finding a path to greatness by confronting the brutal facts of their current reality.”
The second priority is for those in a position of leadership to recognize that if their people don’t believe, they’re not coming. Therefore, what are the rock hard beliefs their people can hold onto?
Third, culture, the engine that makes the B2B brand work. According to Bain, every four years, the average company loses more than half its customers! The two determinates of value creation in business are how tight the ship is run and the closeness of the relationship with the customer; don’t forget it costs 5X more to acquire a new customer, but if you retain 5% of your customers it can increase your bottom line 25%! Retaining customers can only be achieved by a culture that has shared responsibility, share benefits and shared values. Therefore, how do you separate value from commodity?
People and business live their lives in the future not the present. Whilst many B2B brands have attempted to shift from being functionally oriented to emotionally oriented-brands, the real “leap” is in being values-centric brands: It is no longer enough for B2B brands to define themselves in terms of what they are, they must make a commitment (environmentally and socially) about who they want to be. The current mindset encases itself in the moment, forgetting the prosperity of the past and ignoring our ability to shape the future. How people see the world shapes the world.
John Maynard Keynes identified sinking confidence and pessimism as causal to sustaining and deepening economic recessions. The psychology of investors and ordinary consumers is in many respects more critical than what might be described as “objective economic conditions.” The time is now for companies to take on the responsibility of rebuilding trust and advancing the common good as an antidote to the debilitating fear that will assuredly delay a speedy economic recovery. Finance might be the brains of corporations, but brands are the heart.