Recent research into the current focus of B2B marketers has pointed to two exciting trends guiding much of their activity around building their B2B brands: (1) moving from a price-driven focus to a value-based approach and (2) placing more emphasis on the customer experience. Although these highlighted focus areas were reported as separate initiatives, enhancing value and improving the customer experience are strongly linked and can be considered holistically.
Brand Positioning: The Move to Value
Historically, many B2B companies believed that branding was a B2C marketing imperative and had limited value in B2B markets. At best, branding was often associsted with a recognizable logo or tag line. Why?
- Purchasing in the B2B world is more of a rational price decision, and emotions play a limited role in the purchase decision;
- The customer base was often defined and narrow, so there was no need to spend money on branding;
- The direct sales representative owns (and often is) the brand. Face-to-face interactions deliver the brand message and often deliver much of the value;
- The sales channel was often too complex, so traditional branding methods became difficult to achieve less effective;
However, now more than ever, the changing dynamics of B2B sales have many marketers rethinking B2B branding. A recent McKinsey study states,” Decision-making authority for purchases is slipping away from individuals in familiar roles—often those with whom B2B sales teams have long-standing relationships. Business-to-business selling has become less linear as customers research, evaluate, select, and share experiences about products. Businesses today often look for partners, not just vendors, attempting to improve and position their brands. Customers are looking for vendors that can work with them to increase value, develop new products and services, and solve problems across the entire value chain.
In today’s environment of rapid information flow and internet search, all participants in the value chain (customers, special interest groups, suppliers, consumers, etc.) are getting involved in the delivery of the value. Today’s purchasing decisions are increasingly complex, often incorporating social positions and corporate culture (i.e., sustainability record, innovation history, raw material sourcing, labor practices, etc.) of potential partners into the evaluation process. So B2B suppliers must think more about brand image and take a more holistic approach in creating and conveying their brand.
Customer Experience: The Basis for Defining Value
There are two primary challenges in improving brand image by delivering increased value.The first challenge is understanding what drives value, from the purchasing group and throughout all of the customer’s functional areas. Understanding the underlying value drivers for each functional area is foundational in any brand enhancement strategy designed around improving the customer experience. For example, procurement value drivers may be price, terms, and accurate billing, while operations’ value drivers may be run-ability and on-time delivery. All are important in the customer’s ultimate decision on which vendor to use.
The second challenge is understanding the different value profiles by customer segment because all customers are not created equally. For example, customers that are price leaders often have a much different value profile than value leaders, as their customer demands are very different. Segmentation of your customer base is essential when creating an overarching B2B brand strategy. It is difficult, if not impossible to be the low price leader to some customers and deliver high value added services to others. In other words, being a Walmart to some customers and a Nordstrom to others is impossible as the assocociated cost structures and company cultures are entirely different for each brand.
Successful B2B companies view the entire customer experience as an opportunity to improve brand image, and are seeing positive results from their efforts. Quality B2B brands adapt their brand positioning to continue growing the business by listening to, interacting with, and understanding all functional areas within their customer base. Customer Insight and Experience research can provide the information needed to understand all of the value drivers for the critical functional areas within your customer base. This will serve as the foundation for building a customer drive and sustainable B2B brand by enhancing the entire customer experience.