The Importance of Branding in Today's B2B Customer Acquisition

October 6, 2012 at 7:00 AM

As B2B CMO’s work to transition their teams to lead generation, there is a danger of abandoning brand stewardship.  There’s intense pressure to show a return.  Branding metrics, even when quantified with reliable data can be looked upon with reservation.  The more tangible metrics of Lead Generation are winning the day.  Be careful not to gut branding advantages in the process.  Doing so will hamper your company’s growth. 

The purpose of this blog article is to highlight the importance of branding for B2B customer acquisition. To understand the role of branding in the Revenue Lifecycle, Register for the MAKE THE NUMBER Tour session

Branding is Business

My favorite CMO leader is Marty Homlish.   Marty recently joined HP.  He is famous for being the business leader responsible for the successful launch of the Sony PlayStation.  Later as a global CMO at SAP, he was the catalyst for SAP’s brand value rising $2.8B or 46% during his tenure.  You might remember ‘The Best-Run Businesses Run SAP’ series of campaigns that repositioned SAP from an exotic solution to a commonly considered solution among Fortune 500 companies.  See below for the escalation of brand value during Marty’s tenure.

Brand Valuation

Most importantly SAP revenue and profit surged along with worldwide installations increasing by 255%.  Not too shabby.  I think Marty gets it right.  He’s a brand purist, a believer in branding principals, yet he’s a business person first.  This quote says it all:

“Marketing is a service- based organization. Our only reason for existing is to provide services for the organization. We do not create marketing for the sake of marketing.”

Marty Homlish, CMO

In a timeless article from AdAge.com, Marty outlines what he considers to be the goals of Marketing:

  • Sell more stuff
  • Make more money
  • Do it with less expense

Note that he doesn’t say anything about branding.  Marty understands that driving business results required among several things, a strong brand.  You can read more about the specific SAP branding efforts through a Columbia Business School case study

Three Reasons Branding Principles are Crucial to Customer Acquisition

In the pursuit to sell more, Marty made a significant investment in branding.  The following are three reasons branding is crucial to customer acquisition:

1. Establish Trust

For an emerging brand, marketers must provide air cover for sales reps to gain traction.  Credibility is vital to business development.  This is most commonly known as developing Aided and Unaided Brand Awareness. 

We know from human psychology that people are ‘wired’ to distrust anything that is unfamiliar.  It’s simply a survival instinct that is still with us today.  Branding your company provides familiarity to your target audience that in turn enables trust.  An unknown brand is untrusted.

If you’ve ever worked for a start-up company or a troubled company with a poor brand, you know it is an uphill battle.  Many marketers never realize how much the power of a strong brand is producing results for them.  A marketing manager at FedEx could feel like they have the golden touch not realizing that the strong FedEx brand is juicing their results.  Building a company or launching a brand into a new category gives you total perspective on the playing field with a weak brand. 

2. Build Preference

Through sound execution of branding principles, a marketer can establish preference of your brand over competitors.  Let me give you an example to illustrate the point;

One of the brightest CMO’s I’ve ever had the pleasure of serving as an agency partner is Greg Reid, former CMO of YRC Worldwide.   During Greg’s tenure, the brand ‘Yellow Freight’ went from the unpleasant designation by Fortune Magazine as the worst of five national trucking firms in the LTL industry in 1996, to #1 in the industry within five years.  Greg built a powerhouse brand by transforming ‘Yellow Freight’ to ‘Yellow’, a highly preferred brand. 

Brand transformation Lead Generation

Greg recognized in 1999 the future importance of online shipment tracking and control.  He cast the following vision; “Equally important to moving a shipment from point A to point B is the flow of information.”  While competitors were running ads talking about how fast they could move a box, Greg was directing his team to run ads about shipment visibility and control.  He outlawed words that described how a box was moved so that we were forced to craft messaging that spoke to business value.  The end result was such dominance in the market that Yellow acquired or put out of business three of their four national competitors. 

Branding principles apply customer research to identify key points to differentiate.  Success ultimately involves marketing’s ability to tell a compelling story to establish preference among their target audience. 

3. Audience Positioning

Branding efforts involve more than just brand awareness.  The CMO actively drives recognition of key brand attributes.  This is performed by developing a positioning statement where attributes are conveyed in messaging.  The attributes are tracked in brand studies to provide quantitative data that shows the traction and lift over time.

An example to provide color is my experience directing the e-commerce agency of record for Colgate Professional.  Colgate’s top competitor is Crest.  While Crest was putting sparkles in their toothpaste and hiring the celebrity chef Emeril as a spokesman, Colgate was hard at work creating better toothpaste.  I saw the research – Colgate is truly better.  But consumers and dentists saw both as quality products with no point of differentiation.   

My agency team proposed an E-Detail approach where dentists were educated through online videos.   The B2B goal was to compel dentists to provide Colgate samples (vs. Crest) and recommend Colgate to B2C consumers.  We ran pre/post surveys of exposed vs. unexposed audience on product attributes.  We found quantifiable evidence that the exposed audience was persuaded of Colgate’s superiority.  Literally, we saw a majority % increase in dental professionals who saw Colgate as significantly better than Crest.  The B2B program was ramped out to provide a competitive advantage.

By leveraging branding principles, your company can drive acceptance of key product positioning. 

Summary

Branding is a crucial element of your entire go to market plan. Brand building is a catalyst to drive customer acquisition and lead generation. Solid execution across your go to market plan with Sales Enablement and branding efforts performed in corncert will give you a comprehensive approach to win in 2013. 

Key take away points include;

  • Branding establishes credibility
  • Preference for your brand can be instilled in your target audience
  • Prospects can be persuaded to embrace key points of differentiation
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Topics: Lead Generation, LeadGen, CMO Resources, CMO, Brand

Posted by Vince Koehler

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