From the “Duh” File: Brands Matter in B2B Markets

I read an article recently on a respected marketing-focused website, which I responded to like a daytime soap opera viewer: “It made me laugh, it made me cry.”

Brands matter in B2B markets. I laugh, because the notion that someone would think otherwise (or that a writer would posit this opinion with such dignity and a straight digital face) is so surprising it’s actually funny.

But I cry because this seems to indicate that there’s still a question about the value of brands. While the author made several reasonable, if not inspiring points, (“Marketplaces are constantly changing.” “Companies have to adapt to stay ahead.”) the core notion that brands need to differentiate rings absolutely true.

Brands have always mattered.

No matter what you’re selling (Coke, Cornflakes, combines or computers), there is no inherent difference in the core process of building emotional attachments to your brand.

In larger-ticket business purchases, there’s more rational support required to support that emotional buying decision, but if there’s no connection, there’s no sale.

After all, people – particularly in the B2B market – buy from people, not companies. The emotional connections that are often made in a “Blink” (Thanks, Malcolm) can be created, nurtured and grown through your brand.

Yes, brands matter in B2B. Which means that what you stand for, how you’re positioned and what your people say and do, can make or break your business. Just as it has for the last 200 years….

Bridging the Strategy Gap: Getting to Execution

I’ve heard executives talk about the importance strategic planning is given within an organization, and I’ve seen much of the impressive output from expensive consultants.

And while it’s easy to bash these 100-plus page PowerPoint “paper bricks” that often end up gathering dust when some other consulting firm produces them, my tune changes pretty quickly when it’s our recommendations sitting neglected on the shelf.

The fact is, great strategy – whether brand, marketing or business management oriented (in our case, often all three) – can only succeed if it’s actually implemented. When something goes wrong or nothing happens, it can leave the organization unchanged or (even worse) only partway through a critical process.

A recent engagement with a growing financial services firm drove this point home … again. Where does it go wrong? While we see our job as the planners and champions of change, it takes internal leadership and motivation to drive it. Great leadership is about implementing change as well as developing the strategies to create change. You can’t have one without the other.

But not all leaders are naturally equipped, or empowered, to deal with the challenges that this role will throw at them. Whatever their “official” role (whether you’re leading from the top or the middle), leaders need to be able to drive strategic change in their organizations, and motivate others to join them.

I’m thinking we need to add a role to our toolbox: just call me Coach!

Listen. Your customers are speaking

You may know it. I certainly know it. But many brand experts don’t know that customers can provide you with a myriad of intriguing insights into building your brand –– and boosting your business. You just have to offer them an open channel of communications.

After all, once you’re privy to what your customers are thinking through ongoing customer research, you can truly enhance their relationship with your brand.

• After inventing the minivan 25 years ago, Chrysler approached IDEO to re-imagine the minivan.
  

  Inspired by multipurpose family rooms, Chrysler’s popular Town and Country minivan features new interior configuration concepts that allow passengers to talk, work, eat or play together in transit, shifting the minivan’s image from a human cargo vehicle to one that enables quality interactions.

  The result? At this week’s 2009 North American Auto Show, a panel of 100 consumer-minded Detroit News reader-judges — rather than industry professionals — selected the 2009 Chrysler Town & Country as the best family vehicle at the 2009 North American International Auto Show.

• General Motors is listening, too. Check out GM’s blog, FastLane:
  

  Amid growing concerns about the economy, our long-term energy security, driving cars that have less of an impact on our planet, and ever-expanding urban congestion, we all seem to be coming to the conclusion that the automobile as we know it — powered by a combustion engine — must eventually go the way of the horse and buggy. It is simply not sustainable.

These are just a few examples of being able to measure relevant customer metrics over the long-term to gain accurate, actionable results. Brand research helps you understand more about your prospects, your customers, your shareholders, and others, so you can step up your sales pitch to the loyal ones and stop wasting your money on those who aren’t as faithful.

With the right tools and the proper step-by-step guides to improve your research practices, you can more easily capture, codify and interpret information to move your marketing strategy forward.

So whether you need to present perceptual brand attributes to a data-oriented board, to make a case to extend a product line, or to justify some long-delayed pricing updates, brand research can serve as the foundation to build your case, get better mileage out of your marketing budget, and enjoy more sales.

Branding Your Brand Equity

OK, let’s face facts. Managing your brand is paramount to any business. Right?
After all, it’s the best way to boost its perceived value to your customers so you can drive brand equity, boost business growth, and increase profitability.

It was launched by the brand geniuses at Procter & Gamble in the early 1930s. But in today’s über-competitive marketplace with an increasing number of media channels ––digital, print, broadcast and mobile –– brand management is more critical than ever to product and corporate success as organizations attempt to communicate promises, build preference, and create other barriers to competition.

But brand management isn’t just about enabling multiple brands from a single company to compete in the same product category. You know that. I know that. Heck, even my kids know that with the Apple iPods or the Abercrombie & Fitch clothes they buy with their weekly allowances.

But building brand equity is even more imperative to organizations with just one single brand that must overcome the odds and out-market their competitors to create stronger bonds with their customers. This fact is key to the relationships between your divisions or product groups who are constantly cross-selling, up-selling, and trying to corral as many customers as possible within a branded family.

So whether your organization is large or small, multinational or regional, statewide or local, we are here to provide insights, guidance and counsel as you contemplate the various ways to manage –– and grow –– your brand.

Spending Smart: Wooing the Right Customers

A waiter has taken flak from a table of elderly ladies during a two-hour luncheon. They’ve changed their minds, complained, reshuffled their orders, and made the server’s life miserable. When they finally ask for the check, he delivers it with the question, “Was anything all right?”

In direct marketing, few enterprises understand that it’s more profitable to market to your best customers than to attract the millions of potential customers who aren’t yet buying your product or service – or even those infrequent buyers.

Let’s pop open your database and take a peek at The Good, The Bad, and The Ugly. It may not be a nice thing to say, but in truth, most of us have a mix of all three.

• Your good customers are the ones who buy your product time and again. They tell their friends, family and colleagues about you, acting as spokespeople. You love these customers. If you could, you’d clone them.
• The bad customers are the ones that buy just once; then they just disappear. They’re often cherry pickers – they change mobile services over and over, lured by cheaper rates and bigger incentives; they hop from bank to bank, chasing higher interest rates and free toaster ovens.
• And the ugly customers? Don’t get me started! They’re never satisfied. They’re never going to be. They cost more than they’re worth. Let them drift over to your competitors, and be thankful.

Successful companies identify and satisfy their ideal customers, doing everything they can to please and retain them. Simply stated, you should target most of your marketing to these best customers, developing relationships with them, bringing them closer to loyalty – and advocacy.

Example: A telecom operator in South India, struggling with high customer churn, planned to develop a blanket rewards and relationship program with mobile subscribers – but realized that rewarding all subscribers may not be the answer.

Why? The bottom 28% of their subscribers were actually eating up half the profits generated by the others, in operational and servicing costs. Another 12% did not generate any profits. And 30% were only slightly profitable.

By deciding to focus on this top 30%, the operator saved 70% of his marketing budget, and was able to retain 98% of these high end customers in a market that was witnessing over 50% churn.

Bottom Line: It can actually be more profitable to lose bad customers than to gain new ones! The Bad and the Ugly cost more money to service than they generate.

Retaining the right customers is common sense. And one day, it will be common practice.

What’s the true cost of Customer Lifetime Value?

How often have you heard the phrase Customer Lifetime Value (CLV)? According to Wikipedia, the free encyclopedia with over 1.7 million articles, it’s “a metric that projects the value of a customer over the entire history of that customer’s relationship with a company.”

But even if you’re unfamiliar with this phrase, don’t ignore the dynamics of marketing to your base. Politicians do this especially well. But no one does it better than the TV networks.
A few years ago, ABC was in last place among the big three. But now, by giving its base what it wants, Disney’s network has runaway hits like Lost, Desperate Housewives, Dancing With The Stars, Ugly Betty and Grey’s Anatomy.

In fact, many companies totally ignore the impact that loyal customers can have, when the benefits of increasing it are so dramatic:

> A 5% increase in retention can create an 85% increase in profits;

> A 10% increase can translate to a 20% increase in sales;

> Extending customer lifecycles by three years can triple profits per
customer.

As you’ve no doubt heard, it’s difficult to improve what we cannot measure. So it’s even more difficult to accurately project how much you should spend to acquire, service and keep your customers if you actually don’t know their value.

But it’s ALWAYS far less expensive to reach out and market to your current customers than to your prospective customers. That’s why tracking your CLV will help you –– and your organization –– find, keep and profit from the right customers.

Welcome to Touchpoint Insights

With over 100,000 new blogs being created each day, blogging is here to stay. And with that, our entry seems to be not only reasonable, but timely.

Our goal with this blog is to discuss the things we think about every day in our professional roles as brand and marketing consultants. As it says on our website, MCorp. is a Strategic Brand and Marketing Consultancy. The contributors to Brand Perspectives are our partners, associates and friends.

Though we’ll do our best to avoid promoting ourselves, we’re sure that some of our expertise and points-of-view will make their way into this dialogue. After all, we’re marketers at heart. As the scorpion said to the frog “it’s my nature…” We’ll subtly provide more info on us as the Blog progresses.

In the meantime, we’re not sure where this is going to go. A lifetime of carefully crafting each thought, message and word long before they “see the light” is about to take a sharp turn down a road less traveled. We’re just hoping we don’t hit a tree. So if there’s anyone on board with us, we hope you enjoy the ride.