Should B2B Businesses Invest in Brand?

It happened again this week. I was reading a copy of BtoB Magazine, and a CEO from a struggling B2B company was quoted as saying: "Brand is for consumer products; B2B is all about relationships and people, not products - because most of the B2B products category is made up of commodity products and services anyway."

Not so. It's just as important for B2B customers and prospects to know what brand of manufacturer, supplier, distributor or professional services provider you are as it is for a kid choosing a pair of basketball shoes. It's all about differentiating your company and products from your competitors. And if it's well done, buyers will pay a premium price for that distinction. It's a proven fact that purchasers perceive brand name products to be of a higher quality, more reliable and worth more!

B2Ber's have historically relied on direct sales relationships to move products. They assign sales reps to an area, give them some sales materials and encourage them to start calling on prospects. To increase sales, they must bump their competitors by developing a personal bond, expand their area, offer concessions or make special deals. But the successful B2B's are sending their salespeople out with more than sell sheets - they're arming them with a unique, deliverable claim of distinction.

According to some recent Harvard Business School research, B2B marketers are realizing that developing an awareness of a brand's distinction among their customers' customers can capture a larger share of channel margins and build loyalty that can protect them against lower priced competitors.

Consider these examples: Intel makes no sales to end consumers, yet the company built consumer demand pull for its chips that required every PC manufacturer to incorporate and advertise "Intel Inside" on their products and in their ads. Would Dupont's shareholder value be the same today if it had not made consumers aware of nylon, Lycra and Stainmaster and linked these innovations to the Dupont name? Definitely not.

Do you think that brand building is essential for B2B companies? Have you seen other benefits in successful B2B companies that have invested in brand development?

Join the discussion. We'd love to know what you think.