Brand. Anyone who has any experience in marketing understands that having a strong brand can provide a tremendous competitive advantage in sales, margins, and customer acquisition costs. So, for companies marketing in the B2B space, what defines brand? And is the approach to developing a strong brand in the B2B arena any different than developing a strong brand with traditional marketing techniques?
I assert that the rules for establishing a brand in the arena of B2B e-commerce are completely different from the rules for establishing a brand in the traditional marketing world. As business shifts from offline to online communication, marketers are forced to reinvent strategies and use new tools to build brand equity.
Here’s a look at three important principles that drive brand value in B2B:
Marketing experts often explain that brand value is defined by the emotional response a buyer has to a particular product or company. Most often, these responses are a direct result of brand packaging, sales collateral, or advertising. In B2B, brand value is driven purely by quantitative measures. Business customers gauge value in terms of the economic or performance impact a product or service has on their company.
With the elimination of switching costs in B2B e-commerce, value must be clearly demonstrated and quantified in order to retain customer attention. UPS has been able to distinguish itself by offering a measurable cost advantage for global package delivery. It provides a profound, tangible, and distinct economic value compared to other shipping options.
Forget about positioning and targeted messaging as keys to developing a strong brand in B2B. The networked environment of e-business requires companies to develop robust connections and relationships with partners, customers, and suppliers in order to gain trust, relevance, and value within a category.
Brand value in B2B is determined by the quality of a company’s network, the strength of its business relationships, and how closely it is tied to a market. Brand power is also measured by how well you collaborate with customers in order to create new products and services.
A great example of brand value through connectivity is seen at Sun Microsystems. Its brilliance lies in establishing Java as part of an industry’s fabric. Sun maintains an excellent relationship with developers by offering training and programming advice. In addition, it works very closely with all parties involved with its technology, including hardware engineers, chip designers, and software developers.
The brand power of Java is so embedded in the web industry, that it is almost inconceivable that the programming language could ever be displaced as the de facto standard for Internet application development.
In B2B, brand equity is driven by technical innovation. The Net is changing many of the traditional gauges of brand value. Companies that develop unique models that leverage technology to deliver value to their customers generally demonstrate brand leadership.
An example of this can be seen in the e-marketplace software arena, where two companies – Ariba and Commerce One – are attempting to maintain brand leadership through technology. These leading companies have distinguished themselves from a fragmented pack of vendors by outpacing the traditional rate of new product development. Each company has demonstrated an ability to develop new features quickly, to smoothly incorporate technology from acquired companies, and to respond rapidly to the changing demands of its customers. As a result, each remains incumbent brand leaders within the e-marketplace software category.
Brand Matters in B2B
There is a great new term that is being tossed around in marketing circles today called “mindshare.” Although it’s a fabricated word, I think it reflects the number-one objective of B2B marketing – maintaining the buyer’s attention and associating your product or service with factors that influence loyalty. This is not a new concept; however, in B2B, performance and return on brand equity must be clearly demonstrated. The power of network communication via the Internet can short-circuit mass messaging, and customers will pay a premium for the business relationships associated with the transactions generated.
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