2020 has been a sobering time for B2B marketers so far – and it’s hard to see an end in sight. The Services Purchasing Managers Index, a useful proxy to understand business buying trends at a broader level, is at a record low. So, when customers need support, not sales pitches, what is the B2B marketer’s job?
The top-level advice for marketers is to keep communicating if you can – maintaining share of voice will help sustain brand saliency which will help in a recovery phase. “When your brand’s voice is quiet, you lose it fast and it takes a lot more to regain it,” says Michelle Peluso, SVP Digital Sales & CMO of IBM. But some organisations have no choice right now other than to ‘go dark’ and cut promotional spend.
If your organisation is having to endure a temporary hiatus in its sales pipeline while the business world reorganises itself into a new normal, how can B2B marketers use this time productively and build value for their organisations?
While everything is on pause it could be time to get to grips with some serious housekeeping – starting with re-assessing and tuning up one of the most valuable business tools a B2B organisation has within its use – its brand.
How much do B2B brands matter? Clarify the role of your brand in order to reveal its worth
Brands are much more than just a method of identification – but often we see many B2B organisations struggling to quantify exactly how their brand is a source of strategic value. There is plenty of evidence proving that a strong B2B brand supports sales – but it’s not just sales metrics that define the full organisational and bottom-line value of a B2B brand.
A strong brand is a device which can be put to work to solve challenges ranging from market development to reputation management to recruitment – no matter what sector the business is in.
The role of branding for B2Bs is therefore as varied as there are types of B2B organisations. That means the way brand value is calculated for B2B organisations is going to be unique to each business.
Now could be an ideal time for marketers to take stock. A structured review process of what kind of tasks the brand should be performing would show where work is needed. But where to begin? The first place to look in a review of sources of brand value could be the business’ commercial track record.
B2B brand strength has been proven to support growth
Look back over campaign plans and sales patterns to spot connections between trajectories of brand strength and trends of commercial growth.
The key is to find the data that will demonstrate the brand/sales link to stakeholders. Some business leaders assume buying decisions about their products are driven by customers’ rational, logical thought-processes alone (e.g. sales are achieved on the strength of the product’s features), with subjective influences like brand perception or preference playing no part.
There’s plenty of research showing how branding boosts B2B sales growth. As Binet & Field pointed out in their latest report on B2B marketing effectiveness – a direct return from B2B brand-building investment is seen in revenue growth. With every 10 percentage points of a brand’s ‘share of voice’ exceeding its category market share, this leads to an additional 0.7% market share growth each year.
As an example of how moving a B2B organisation’s brand perceptions can drive commercial success, between 2015-2018 EY invested in differentiating its brand image. The audience’s opinion of increased brand distinctiveness resulted in long-term sales impact, because buyers were more likely to consider and prefer EY across all its services as a result.
After growth trends, where next should marketers look in a B2B brand value review process? To understand exactly how the brand influences sales success, the next step is to dive in the buyer’s decision-making journey.
A brand’s influence becomes even more important in complex B2B sales processes
It’s easy to miss the importance of brand influence in sales with multiple decision-makers, like those for B2B. However, the complexity of the B2B sales process makes the role of a strong B2B brand even more acutely important, not less. The higher-stakes and higher-cost the buying decision is, the more important the brand becomes.
The sales process can take months or even years before a buying decision is made. A strong brand provides an instrument to sustain and represent meaning over a long period of time, in a variety of different channels and touchpoints. The brand comes into play in numerous buyer interactions that may not have a company representative present – like the buyer researching the vendor online.
The complexity of offerings from large B2Bs amplify the importance of the company behind the product. B2B buyers want to buy from strong, stable, leading organisations. Buyers – and their bosses, and influencers – need to feel confidence about the buying decision, which is where the B2B organisation’s brand strength comes into play as a way to build trust with multiple audience layers.
Map out all the points of contact your customer decision-making unit (and their circle of influencers) has with your organisation – evaluate how they see your brand from their point of view. An audit could reveal that your website or social media channels takes on far more of the heavy lifting than you realise – especially now that opportunities for face-to-face engagement are totally limited.
But using a strong brand as a tool to influence buying decisions is only part of the story when it comes to understanding how a brand can create value for B2Bs. Sales aren’t the only metric of value that matters. So, in an audit of brand value, marketers need to analyse how their organisation operates too.
A strong B2B brand creates commercial value beyond its impact on sales
When it comes to calculating the value that a strong brand creates, the ‘brand contribution’ equation can be easily dominated by sales metrics, because a decision to purchase based on brand influence is the easiest brand-influenced decision to measure. So, assumptions about a brand’s impact on the balance sheet are often limited to its role in revenue growth and price premium/margin.
However, for B2Bs, brands influence other types of important decisions that aren’t just about buying. Lots of people make decisions about a business every day. The larger the business, the greater the complexity of stakeholders involved and the more numerous and weightier the types of decision they make.
Policymakers will make regulatory decisions about the business. Employees will make commitment and productivity decisions about their business. Sought-after talent like software engineers will decide whether they would like to work for the business. Journalists will decide how to write about the business (meaning investors will decide whether they should put money in the business). Suppliers will decide how to negotiate with the business.
All those decisions affect the commercial success of the business in question – they influence the business’ cost of operating.
A lot of the commercial upsides that strong brands create for large B2Bs are therefore operational – not just related to revenue or margin – and are still measurable with metrics that CFOs value. Employee retention and productivity translates into more efficient use of working capital. Brand influence on lenders’ perceptions of business risk reduces the cost of capital. A strong brand can help supplier payment negotiations – which helps free cash flow.
So, in your strategic review of brand value, don’t forget to calculate how much money your brand is saving you, as well as adding up how much it is making for you.
There’s more to calculating the value of a B2B brand than meets the eye
A strong B2B brand is proven to support sales – but it’s not just a brand’s influence on buyer decision-making that creates its value to an organisation. For B2B marketers a full calculation of the value delivered by the brand to your bottom-line means widening your sources of metrics to business operational measures too.
By gathering data from the talent, treasury and purchasing departments as well as the sales team, you can begin building a framework to understand how your B2B brand truly matters. And, once you have that picture, you can get to work strengthening that brand to help your organisation compete more effectively, no matter the disruption it faces now or in the future.