In their new book Absolute Value, two well-known marketing thinkers, Itamar Simonson and Emanuel Rosen, make the case that the hegemony of the brand is coming to an end, due to the widespread availability of information. Brands, they argue, took the place of perfect information and gave consumers the tools they need to make decisions.
Now, excellent information is everywhere, and Simonson and Rosen maintain that, rather than being overwhelmed by it, we’re finding the answers to our questions with relative ease. This enables buyers to assess what the authors call the ‘absolute value’ of a product or service. Not surprisingly, such a counterintuitive stance has attracted widespread attention, leading well-known finance and business writer James Surowiecki to claim in his New Yorker column that we were seeing the “Twilight of the Brands”.
Maybe not. Glancing out of the window of Ogilvy & Mather’s offices, it looks a lot more like bright midday for brands, particularly in B2B industries.
Simonson and Rosen state that “in most categories, quality signaling is a key function of brands… so there is little doubt about the typical impact of better information about absolute quality and the resulting (diminishing) effect of brand names”. We see the function of the brand as dramatically more complex and important than that, and its importance for B2B marketing is on the upswing. In fact, the 2012 B2B Branding study by McKinsey and Company found that the B2B brand is a “central rather than marginal part of a supplier’s proposition”. Brand is just about equal with sales in influence and only just behind price and product. Strong brands outperformed weak ones by 20% in 2012.
But what is it that B2B brands communicate? The CEB Marketing Leadership Council partnered with Google in 2013 in a study, ‘From Promotion to Emotion: connecting B2B Customers to Brands’, to survey 3,000 B2B purchasers, in order to better understand the role of brand. They studied two important brand measures: business value and personal value. Look at business value as a stand-in for rational factors such as function or outcomes; personal value encompasses emotion-driven rewards such as professional, social, self-image and emotional benefits.
The survey found that “not only do emotions matter in B2B buying, but they actually matter even more than logic and reason”. Personal value accounts for nearly 43% of brand benefits on commercial outcomes versus only 21% for business value. Buyers who see personal value are not only much more likely to purchase that brand, they are even more likely to pay a higher price.B2B marketers have already realised that they need to inject emotion into their brands. Witness GE’s decision to produce and air during the Winter Olympics in Sochi an evocative and lavish primetime spot that Humanise the B2B Brandhumanises GE technology. The next frontier is humanising the B2B brand itself. Only then can the true personal value be communicated to buyers and prospects. After all, B2B brands have moved from being consumed by operations management and technology specialists to being central to senior management and C-suite conversations, particularly for critical technologies.
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