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Strewn around my house are pens, coffee cups, calculators, USB memory sticks, and assorted swag from

various companies Ive met over the years. What is the purpose of all this stuff? Does having a leather portfolio with a vendors logo on it make me more likely to buy their products? Proponents of swag will argue that it builds brand by getting the businesss name in the office of potential influencers and purchasers, where it will stay top of mind. Is this really effective? Put more broadly, does branding even matter at B2B companies? Or is branding a waste of time and budget compared to hard ROI activities that can be proven to drive revenue? In this post, Part One of an occasional series on B2B Branding, Ill explain why I think branding is important to B2B companies, and why it should be part of your overall B2B marketing strategy. In Part Two, Ill discuss the subtle differences between brand and reputation. And in Part Three, Ill give tips for how B2B marketers should think about building their brands and measuring their results. (And guess what? Giving out swag is not one of the tips.) Some May Disagree Some experts argue that branding plays no role in B2B marketing. Their arguments typically include:

B2B buyers are rational decision makers (or a committee of rational decision makers) who are not swayed by emotional factors such as brands. B2B purchases are all about the relationship between the individual sales rep and the buyer; if the B2B brand means anything, it is created by the sales rep. B2B products do not promise to make you cool or sexy or any other inspirational attribute. Price is the only thing that matters. B2B products are too complex to reduce to a tagline or ad. B2B companies sell to narrow audiences, so advertising to create a brand does not make sense. Even one of the most respected thinkers in business marketing, Geoffrey Moore, recently wrote that branding has no relevance to complex B2B companies, arguing that: while [branding] has extraordinary relevance to B2C volume operations enterprises, it has virtually no relevance to B2B complex systems enterprises IBM, GE, Cisco, Oracle, SAP, Siemens, Accenture, and Caterpillar are great companies, but it is highly misleading to think of them as great brands In a complex systems enterprise the mechanisms are completely different. Customer intimacy is achieved by face-to-face interactions between representatives of both companies, and buying decisions are made and reviewed by an array of people. By virtue of these differences the impact of brand is dramatically muted. In reality it is far better to think of such a brand as a placeholder for a strong corporate reputation and leave it at that. Business Buyers Have Emotions Too Despite those arguments, my belief is that branding does matter to B2B marketers, and for one main reason: B2B buyers are still people, and people are emotional. And, as research increasingly indicates, emotions impact economic decision making. In Blink: The Power of Thinking Without Thinking, Malcolm Gladwell

writes that buyers make most decisions by relying on their two-second first impressions based on stored memories, images and feelings. Heuristics More generally, research shows that emotions impact how decisions are framed and are heavily involved in the creation of heuristics. A heuristic is a simple, efficient shorthand that simplifies decision making. They can guide which information and options are considered and which are rejected, and can bypass rational decision making altogether. (Another interesting bit of research found that buyers who had fewer options and considered fewer criteria were more satisfied with their purchase than those with a more complete decision process.) Often, heuristics are useful: if you find yourself in Africa threatened by a lion, you dont have time to evaluate all your options rationally. But heuristics also bypass rational decision making, which is the source of many biases. Kevin Randall of Movo Integrated Branding writes that B2B buyers are overwhelmed with choices, features, benefits, information, data, and metrics. The typical RFP process involves dozens of potential vendors and hundreds of questions more information than any buyer could evaluate. The fact that B2B buyers have emotions means that no matter how disciplined a buying process is, they will still use heuristics to simplify their decision making. This may be conscious, since the buyer knows she cant learn everything about every potential vendor, or it may be subconscious. In fact, whether or not the buyer realizes it, the decision is often made long before the buying process is completed. When this happens, even subconsciously, much of the buying process ends up being an effort to justify the initial emotional decision. B2B marketers can and should tap into this by appealing to the emotional side of their prospects, as well as their rational side. This is where branding comes in, because brands inherently operate on an emotional level by stimulating the amygdala portion of the brain (part of the reptilian limbic system). By building the right brand associations in your prospects mind, you can help to close the deal before the selling even starts. Avoidance of Negative Emotions Research also shows that emotions impact decision making because we take the anticipation of emotions into our decision making. When looking to buy something, we balance the pleasure of the prospective possession with the pain of acquiring it. When negotiating with others, our desire to avoid guilt, disappointment, and regret can impact our strategies as much as our desire to get a good outcome. In B2C marketing, marketers often capitalize on the anticipation of positive emotion by appealing to aspirational feelings such as desire. In contrast, the strongest B2B brands capitalize on the avoidance of negative emotions. This is because there is an asymmetry between the upside and downside of B2B purchases: the buyer does not experience the full benefit of the solution directly and may or not be rewarded for making a good purchase, but a bad purchase can destroy the buyers reputation and damage job security. B2B brands can tap into this by building trust in the buyers mind. The classic example is nobody ever got fired for buying IBM. One way to achieve trust is by being a dominant leader in your category. Since that is not an option for most companies (yet), the best way to build a brand of trust is to become a trusted advisor

via thought leadership early in the buying cycle. (Stay tuned for Part Three for more on this topic.) Hard ROI Benefits of Building Brands Because brand-influenced heuristics impact buyer decision making, companies with strong brands often have better financial performance. The heuristics used by potential buyers lead to greater access, lower price sensitivity, better openness, and more forgiveness for mistakes for well-branded companies. The book Business Market Management: Understanding, Creating, and Delivering Value argues that strong brands are reflected in these preferential actions:

Greater willingness to try a product or service Less time needed to close the sale of an offering Greater likelihood that the product or service is purchased Willingness to award a larger share of purchase requirement Willingness to pay a price premium Less sensitive in regard to price increases Less inducement to try a competitive offering Of course, it can be notoriously difficult for a metrics-driven CMO to prove these effects to their fellow executives, especially since there is no easy control group to test against. One approach is to measure brand perceptions from target customers, and then correlate their a priori perceptions to business outcomes. If you can demonstrate a positive relationship between initial brand perception and eventual revenue from that customer, you will be well on your way to being able to proving the ROI on brand building. For more, stay tuned for Parts Two and Three of my B2B Branding series, in which Ill discuss the differences between brand and reputation, and share ideas for how B2B marketers can build their brands and measure the results.

B2B versus B2C Branding

Is there a real difference in business-to-business branding versus business-to-consumer? Throughout our business career, people have continually asked us, Whats the difference between B2B and B2C branding? Is there one? And if so, what do corporations need to know to help influence positive change in their business? I must say, weve heard many strange answers throughout the yearsnot only from experts in our field, but from some of the largest, most successful B2B companies. The purpose of this communication is to give you our views on the differences between B2B and B2C branding and how successful B2B companies can leverage this understanding to increase the value of their business. Basically, in order to effectively answer the question (or at least give you sufficient rationale), its best to examine three critical components of the process, approach and ultimate outcome: 1. The heart of the buying influence and the strategic complexity 2. Sales channel/distribution alignment and communication 3. Brand relationship

UNDERSTANDING THE COMPLEXITY True differentiation at the heart of the buying influence. Unlike packaged goods and retail, where product branding really got its heritage, B2B branding starts with a premise far more complex. Lets start by thinking about a typical B2B company, such as Toyota (the forklift division). The purchasing decision is multidimensional; decision makers may include an influencer (possibly the drivers), a gatekeeper (most likely purchasing) and a specifier or champion of the decision. Unlike most consumer brands that are impulse- or single-minded-influenced, the B2B decisionmaking process can be multifaceted and take months to reach a conclusion. Which brings me to a critical point: most typical consumer purchases (except for maybe a house or car) do not require the great amount of research, negotiation and shared decision making as typical B2B decisions. And you cant lose your job by making a bad decision on what type of shampoo or cat food to buy or which restaurants you choose to frequent (or at least we hope not). The magnitude of how decisions are made in the B2B world take on a different strategic mindset, with sometimes a hundred points of communications before the sale is consummated. Therefore, one key factor to effective B2B branding truly understands all of the touch points that can ultimately affect the decision-making process and to make sure the competitive advantage and brand differentiation is clear and evident in all communications. It is this complexity, spread over many different departments within a corporation that makes B2B branding considerably different from B2C. It requires a skill set much different from packaged goods or retail product branding to consumers. Business must have a highly effective strategic orientation, one that gives visibility to the current communication status on a client-to-client basis for the greatest impact. Disciplined strategic approaches and customer monitoring and metrics are essential to having and maintaining long-term successful client relationships. Just think, one small breakdown in the process (a late proposal, bad sales meeting or billing issue) can negatively affect the entire organizations reputation for the years to follow. One technique Rieches Baird has used successfully is an innovative Touch point Mapping process: a scientific way to chart out the entire process, evaluate the current experience and incorporate strategies to align the experience with the brand promise. Imagine being able to look at the entire customer experience on your conference wall. Imagine understanding the customer perception at each point of the process and then directing your marketing efforts to monitor the experience. In the case of American Airlines Cargo, they successfully identified the current experience through advanced customer Touch point Mapping and have embarked on a journey to create the ultimate customer experiencea brilliant way to create a competitive advantage that can be quantified, nurtured and merchandised across the entire organization. THE SALE Channel distribution and communication strategy is where these two business approaches divide. Another core difference, most people would agree, is the sales or channel approach to brand communication. Distribution strategies dramatically change the way B2B and B2C agencies communicate with their audiences and the types of media used. The major difference is the type of media and creative it takes to drive demand. Most advertising agencies for B2C clients traditionally relied on proven pull-through approaches like broadcast, radio and print to drive customer demand. Agencies over the years have striven to produce outrageous creative in an effort to break through the mundane messaging weve all come to despise. So, in essence, B2C agencies are highly focused on producing the next best creative to drive their customers business. The automotive industry is famous for thisspending hundreds of millions of dollars on innovative and

creative techniques that are way off strategy or have no point of differentiation. Whens the last time you remember seeing a car commercial that connected with you? Can you even recall a recent good commercial? And with the going rate of an $11-million-a-year budget to successfully introduce a typical consumer product in the United States, this becomes a hit-or-miss proposition. This is why so many consumer product and retail brands come and go and why retail and consumer advertising agencies remain in business. Unlike in the B2C business, marketing to the B2B world cannot afford to gamble with its long-term corporate reputation to the degree of consumer packaged goods or retail brands, which typically have a shorter shelf life. Also, think about the customer for most B2B businesses; its usually not the end user. In traditional distribution or dealer models, its the business customer thats most influential. Therefore the approach becomes more collaborative and commutative with its partners. Lets take, for example, one of the fastest-growing kitchen and bath faucet companies in the United States, named Rohl. After successfully repositioning them to own Authentic Luxury for Kitchen and Bath, the main objective was to clearly establish the strategy within existing and new channels. Once again, understanding every touch point was critical to determine the influence of each medium, which ultimately drove the spending strategy. In their case, making sure Authentic Luxury perm anted through the dealer communication was critical. Keeping a strategic focus on dealer communication is paramount for B2B businesses to deliver on differentiated promises. So, as you can imagine, massive efforts must be focused on driving, maintaining and measuring the dealer experience to end users. In addition, the organizations need to make sure every department understands how they contribute to their value proposition and competitive advantage to ensure the message is authentic and believable. BRAND RELATIONSHIP Day after day it gets more personal. Unlike the other two examples that clearly demonstrate the differences in approach, process and strategy, there is a softer, intangible aspect to discuss and ponder. Its about people. At the heart of almost all B2B business brands are people interacting together and experiencing the constant expression. This is a huge difference as it relates to the personal interaction and communication. On the one hand, B2B brands live and die by personal representation. On the other hand, consumer package brands have a different expectation. I dont know about you, but I never have had the expectation of meeting Chef Boyardee (is he even a real person?) or I never really thought about who owns Barbie. The point is, sometimes it does not matter. Unless the makers of those consumer package goods do something wrong or get in the way of good communication,most of the time, the only expectation I have is of the product and the service that may be needed. On the flip side, if Im dealing with a high-stakes purchasing decision in the B2B brand arena, you can bet the corporations brand will come into major consideration. Questions arise like, How long have they been around? and Who do they work with? and Whats their philosophy? In addition, the executive leadership of B2B organizations can become extremely important. John Chambers from Cisco is an extraordinary example of this case. His ability to articulate the future as it relates to the Cisco innovation position is legendary in the marketplace. Bottom line, people are one of the most valuable assets in branding for B2B.