Branding and Positioning in the B2B World

One of the biggest differences between B2B and B2C is branding or positioning your company.  Many extremely successful marketing leaders in B2C have a difficult time making the much needed adjustments to be successful.  In my book, The B2B Executive Playbook, I referred to Michael Jordan’s dominance in basketball and being labeled “World’s Greatest Athlete.”  But, the world’s greatest athlete failed miserably when he tried professional baseball.

He may still be the greatest athlete, but he needed to apply his skills much differently to be successful in baseball.  What he also lacked was experience in baseball.  I’ve witnessed dozens of successful B2C marketing executives who have been met with the same results as Jordan did when they crossed over to B2B marketing. 

Commonly, I run into high-profile executives much like the one I worked with who came over from a major soft drink company.  He is a great individual.  He amassed all kinds of accolades and had great success at his former company as a brand leader of its flagship product. His honors included national advertising and marketing awards as well as several industry awards.  The financials were incredible too…market share gains, profitable growth, etc.  Then he jumped to a B2B and became the CMO in an industry which he had no experience.  The CEO was so excited to land him and even made him over product development as well.  He applied the B2C formula that made him a huge success at his old company.

Well, his new company had about 10,000 customers, but their top 50 customers were 50% and the top 200 were around 75% of the revenue of this $5 billion company.   He didn’t fully understand the impact of this and violated nearly every B2B success principle outlined in the book.  Most of what he did was in the name of branding, (new look, logo, tagline, positioning, etc.).  He committed millions to what made him wildly successful at his B2C Company…updated look and feel of logo, tagline, entertainment/event sponsorship and a broad ad campaign. 

The results were brutal:  sales went down, market share slid, margins tumbled, and because he also oversaw and shifted R&D dollars to marketing, their product started falling behind because they weren’t reinvesting like the competition.  In addition, many of their top customers were leaving them, signing exclusive long-term deals with the competition…never to return.  The only thing that collapsed more than the financial results during his tenure was the company morale. 

That CMO lasted three years. He has been gone for about three years now, and they still haven’t recovered from the damage that the B2C approaches caused to this great B2B Company.  It was like wearing a basketball uniform to a football game.  It was ugly. 

While there is no universal agreement on the definition of brand, the core is simply how the market views your company - your reputation.  It includes aspects like what your firm is known for, where the market believes you have value or have credibility, and your company’s personality and culture.

In the B2C world, the brand position is achieved much differently.  Let’s take the world’s most valuable brand, Coke.  I drink more Diet Cokes than I do anything else.  I have it stocked in my home fridge, in my work fridge and order it every lunch, etc…

The image of the Coke brand, for me as the customer, is contained to the advertising, the package design, others’ perceptions and my experience.  Think about it. Even if the package is damaged, in my head I assume my local grocer dropped it while putting it out on the shelf.  If it tastes bad when I order it at a restaurant, I put it on the restaurant for not have the right mix (syrup and water).  I actually do not know a single person who works for Coke! My touch points and interactions with Coke, as well as all my other brand goods, are similar to this (Crest, Nike, Sony, Tommy Bahama).

All of these B2C companies invest millions into understanding the various personas, segments, demographics, geographical nuances, etc. to determine how to position and manage these brands.  The same is true about all respected B2C CPG (Consumer Packaged Goods) brands.

There are two additional elements in the other major B2C category: Retailers.  For  retailers such as Starbucks, Disney, McDonalds, Target and others, the brand is also impacted by the store (look, experience, etc.) and the people (knowledge, culture, interactions, etc.).

In the B2B world, the brand position is also established with all of the above-mentioned brand-building components.  The difference, however, is the priority and weighting these elements are assigned, as well as the impact that a very few customers can have.  And while it’s only one element, that impact can be the difference between Branding Nirvana and losing your job (CMOs have the shortest tenure of all C-level positions and functions). 

Why are the customers more important in branding a B2B?

Because in the B2B world, the people you are selling to are industry veterans and most are also subject matter experts.  Simply put, they are living what you are selling.  They live and breathe in the industry you are supplying.  When GE Aviation sells jet engines to Boeing, the people that are evaluating and making the decision are engineers that have been in the Aviation industry for 15-25 years on average.  When Harris Broadcast sells content distribution solutions to Disney, the people evaluating and making the decisions are have 15-10+ years in the media industry.  The expertise, level of complexity, layers of customer contacts and overall sophistication of the prospect is exponentially different.    

In the B2C world, in a blind taste, 90% of the population can’t tell a $10 bottle of wine from a $100 bottle.  Nor can they tell the difference from free tap water and a $5 bottled water of Fiji.   But a sophisticated and highly emotional marketing and branding program can yield premium dollars for something which the buyer honestly can’t tell the difference. 

In the B2B world, it’s just the opposite.  While they may not know your specific offering, they usually know their industry better than those who supply it and how they will uniquely apply your product, solution or service.  They will scrutinize, compare, benchmark, test, and go to third parties and associations for references and validation. 

Think about the CIO who has worked in the financial services industry for 22 years. If you have IT solutions to serve this market, your company better know his needs, priorities, his environment and requirements…and most of all, you better have peers (fellow CIOs) he can talk to about working with your firm.  If you don’t have this, a well-designed logo, powerful tagline, slick campaign, elaborate brochure or PPT presentation will not overcome the lack of credibility to support a premium position.  Too much is at risk in his world: security of the bank assets, privacy issues, government compliance, the customer experience and the CIO’s reputation and career.   In fact, in a recent meeting, CIOs rated peer input as the #1 credible and trusted source for supplier selection.

In the B2B world, the most effective way to build or reposition a strong credible brand is through your current customers.  It’s how they describe their experience working with your company; it’s what they say you successfully delivered to them (or fell short of).  And the higher level they are, they more impact they will have.

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