There’s a change afoot in the B2B world. Once known for their buttoned-up cultures and button-down collars, these historically sales-driven enterprises have begun to adopt the emotional tools of brand-building to stay competitive and grow their businesses. We’ve noticed this trend in our own caseload and judging by the headline activity popping up in trade journals and the general blogosphere, the change is gaining momentum.
We thought it might be a good time to take a beat, collect our thoughts and better define what we’re seeing, why we’re seeing it and what it means for professionals looking to reorient their efforts and create modern B2B brands.
Selling vs. Branding
In the past, B2Bs have relied on a well-oiled sales organization to drive sales and business growth. Sale professionals employed lead discipline and people skills to build relationships and generally be in the right place at the right time when a customer was ready to buy. In this way, sales teams often become the main face for their company, and thus carry the weight of the company’s reputation.
But changes in customer behavior are requiring modern B2Bs to rethink traditional sales approaches. Successful organizations are complimenting sales activations with modern brand-building as a way to expedite sales cycles, soften the top of sales funnels, create consistency and synchronicity from rep to rep and, ultimately, invest in long-term growth.
So, what happened?
Well, Millennials happened. Long garnering attention for their impact on the consumer economy, they’ve now attained decision-making power in the world of B2B. According to MacFayden, Millennials are making 73% of the purchase decisions for their companies and their decisions are being influenced by a set of sensibilities long associated with this group:
These sensibilities are producing new buying behaviors and, similar to the scramble made by consumer brands over a decade ago, B2B brands need to overcome their institutional inertia to catch up to their customers. So, let’s catch up.
They do the research. Digitally.
When you’ve grown up with search engines, research is second nature, whether for an English essay or a sneaker purchase. This behavior has dramatically changed the level of information required to begin a purchase journey, as well as when, where and how information is accessed.
The company sales rep is now the #4 source of information for a company’s product. If a charismatic sales force is your secret sauce for business growth, it’s likely become rather bland. Touchpoints like demos (the #1 source of info), websites and social media channels have knocked reps out of the top spot—and if yours aren’t brand-aligned, you’re missing out on a huge competitive advantage.
They’re comfortable buying big-ticket items online.
Being digitally native doesn’t stop at search engines. This group has grown up in a world of increasingly sophisticated e-commerce and they are more comfortable with purchasing bigger online ticket items than their older colleagues. One survey found that 70% of B2B buyers are comfortable spending as much as $50,000 without the assistance of a company representative. Elegant self-service is actually preferred over the messiness of navigating a conversation with a “pushy salesperson”.
They expect impeccable customer experiences.
Tech columnist Kara Swisher has called San Francisco “assisted living for Millennials.” Much of the service innovation emanating from Silicon Valley was aimed at this group’s desires for food, rides and dates. For a cohort accustomed to a work/life blur, CX that redefines expectations is now a basic expectation. Their patience for mediocrity in the products and services they buy is extremely low. Investing in impeccable, brand-driven CX presents a huge opportunity for B2Bs to not only delight customers but also to do to their competition what ride-hailing apps have done to taxicabs.
They care about brand purpose and values. Really.
Way back in 2019, we lived in a world where companies entertained the desires of a subset of passionate employees to address various corporate social responsibility (CSR) issues. Committees were formed. Reports were published. Recommendations were issued and a fragment of those recommendations were acted upon.
In 2021, a lack of tangible action on these plans has real potential to kill deals. Remember, this group has next-level research skills, they’re values-driven and social media-adroit (where the corporate laundry gets aired first and loudest). Purpose-washing is no longer a strategy. These professionals actually care about carbon footprints, where products come from and how workers are treated. They require authentic action that is part of a brand’s DNA.
Customers are people and people are complicated. They have hopes, dreams and aspirations that they bring to work. Millennials—having grown up in a culture drenched in brands—are more likely than their older coworkers to use brands to attain aspirations and build personas in their professional life.
It’s important to remember that brands are more than a collection of rational benefits. At LPK, we use a model based on the heads, hearts and guts of consumers. These are a colloquial expression of the rational, emotional and primal reasons people buy brands.
Connecting at all three points is crucial because Millennials are often aiming to build innovative reputations within their organizations and they’re using brands and their new-found purchasing power to do it. B2Bs that insist upon clinging to bulleted listicles of rational benefits run the risk of appearing dusty and staid.
A Brand’s Place in the Sales Funnel
As noted above, Millennials are brand-savvy and they’re bringing a more B2C-style sensibility to the B2B world. Unfortunately, in many B2B cultures, this sensibility can come off as fluffy and superfluous BS – all art, no science. In actuality, that fluffy stuff is the collection of attributes that engages the whole brain of your potential customer (not just the left half). It’s also akin to the persuasive charisma your sales team brings to customer interactions – interactions decision-makers want less and less to do with. This is where brand-building can pick up the slack and make the lives of a B2B sales force easier.
A well-designed brand engages customers earlier in the decision journey, reframing products in new, more resonant ways and helping them think differently about their challenges. By the time customers are ready to act and engage with a company representative, affinity is created and much of the decision-making has already been accomplished.
Cutting through the static of a noisy world has always been one of the key challenges for a B2C brand. But in the last decade, this endeavor has gotten even more challenging. A fragmented media environment and disintegrating barriers to entry have minted thousands of new brands and thousands of messages sprayed across the cognitive bandwidth of consumers. To improve the likelihood that their brands break through, B2Cs typically adopt three strategies.
Margins & Price Sensitivity
In the B2B world, obsessive attention is given to driving more leads and increasing sales volume. Leads and sales can be tracked with numbers. Numbers are sexy. (At least to this crowd.) Measuring brand value and its contribution to sales totals is a dark art at best. However, as Professor Mark Ritson explains, research consistently shows that strong brands command a higher price point, reducing price sensitivity with customers. This is important because a 1% increase in sales volume delivers a 3% increase in profitability—but a 1% increase in price delivers a 10 % increase in profitability.
As Warren Buffet says, “the single most important decision in evaluating a business is pricing power.”
The ways in which companies are valued are similar to that of a professional athlete’s contract; the expectations of future performance. McKinsey estimates that 80% of the value of a stock is based on sales 10-plus years in the future.
At LPK, we define a brand as the promise of an experience or more accurately, the promise of the next experience. The B2Bs that invest in brand-building are the ones more likely to enjoy the benefits of an assumption of future performance. Additionally, strong brands are not only awarded higher stock prices, but they are also imbued with a high degree of resilience. This was powerfully expressed after the 2008 downturn when the top 100 brands in the Brand Z index dramatically outpaced the rest of the market in terms of depth of dive and strength of rebound.
Invest in your brand. More importantly start brand-ing. Identify the higher order promise your brand offers customers and put it into action across every aspect of your business. Connect on a head, heart and gut level. When you do, your brand can amplify the efforts of your sales team, strengthening the connection between your business and you customers.
How does your brand stack up?
Finally, we’ve developed a scorecard to aid you in understanding the opportunities ahead to strengthen your brand and ultimately grow your business. To get The Modern B2B Scorecard, download it here.