Thursday, May 15, 2008
B2B companies generally don’t support branding to the same extent. Their product offerings are called products. Perhaps they don’t support the branding concept because their offerings have generally been presented directly to buyers by sales people and not via advertising or shelf position. Yet, there are logos on pens, coffee cups, calculators, USB memory sticks and assorted stuff from various companies. What is the purpose of all this stuff? Proponents will argue that it builds brand by getting the business's name in the office of potential influencers and purchasers, where it will stay top of mind. But then, their materials, website, sales aids and more are all very differentiated and no clear message is delivered. If the name does stay in the customer’s mind, it is out of focus. Tom Peters will tell you that over and over.
Does branding even matter at B2B companies? Or is branding a waste of time and budget compared to "hard ROI" activities that can be proven to drive revenue? Some experts argue that branding plays no role in B2B marketing. Their arguments typically include:
* B2B buyers are rational decision makers (or a committee of rational decision makers) who are not swayed by emotional factors such as brands.
* B2B purchases are all about the relationship between the individual sales rep and the buyer; if the B2B brand means anything, it is created by the sales rep.
* B2B products do not really promote the product’s benefits. Those are a given. Price is the only thing that matters.
* B2B products are too complex to reduce to a tagline or ad.
* B2B companies sell to narrow audiences, so advertising to create a brand does not make sense.
While some of this is true, it is also misguided. I have led businesses in both consumer packaged goods and B2B and know from personal experience the value of establishing strong brands in both.
Here is why.
· If you sell on a cost basis, you will always be negotiating and competition’s price cuts are just as good as yours.
· You are ignoring the product development investments you have made and are not getting the value from them.
· You are essentially telling your customers that everyone is equal and that only the sales inducements matter. Can that lead to kickbacks and bribes of some sort? Yes!
· You have to over-invest in your sales force to do the proper job on the customers.
· You are reliant on your sales people alone. Given the transition from company to company of employees these days that puts your business at risk. And you are paying to do it!
On the other hand here are some of the benefits I have found of branding for B2B companies.
· Branding ties together all of the activities of your company and provides focus.
Branding will provide clarity to the decision process for the customer. Less time is needed to close the sale of an offering.
· Research shows that it leads to a greater willingness to try a product or service by customers.
· The clear focus enables you to “transfer” the goodwill from one product to another.
· Branding generates higher barriers to entry for competition.
There is a willingness to award a larger share of purchase requirement by customers.
· It makes products less sensitive in regard to price increases.
· It can insulate the business from movement of sales people.
· It has been proven that branded products carry higher margins. HIGHER margins.
Here are three examples of companies doing B2B branding.
· IBM successfully created “eServices” to overcome the confusion its alpha numeric naming caused and was wasting millions of dollars. It took the company to market leadership in that area.
· Ingersoll-Rand re-branded itself as “IR” to leverage the IR master brand strategy across all of its divisions. It signaled that it was a diversified company comprised of industrial brands. More success.
· Intel uses branding not only for B2B but also for consumers to drive higher margins than competitor AMD.
It is not just large companies that are using B2B branding. Branding for all B2B companies is becoming even more important with the increase in sale via the internet. The impact of the personal touch of the salesperson is being reduced. More and more B2B companies are looking to marketing people with consumer goods experience to add to their selling arsenal. Smart move.
Branding doesn’t have to be expensive with multi-million dollar ads and campaigns. But it does have to be done right to generate an ROI that makes your investment successful.
If you lead a B2B company are you actively engaged in branding both your products and your company? If not why not?
Let us know how we can help. We have the B2B experience, the consumer packaged goods experience and the branding expertise. We can accelerate your business progress.
Maver Management Group
Monday, May 12, 2008
In good times and more challenging times, leaders have to lead. There are four commitments a leader needs to make to effectively lead.
People who work in organization want to know “where are we headed, what is our goal.” It is the responsibility of the leader to determine the goal and to regularly and clearly communicate it. The leader who fails to create a vision is doing a disservice to those who work in the organization. If there is no goal, what is the future? What is the focus? Why toil to uncertainty except for a paycheck? People want to work towards something and for something that is bigger than themselves and the leader must provide this vision.
The wisest leaders understand that they would never ask their subordinates to do something that they would not be willing to do themselves. In the movie “Saving Private Ryan” Captain Miller, played by Tom Hanks, earned and kept the respect of his men because he landed with them on
The leader cannot hide behind the desk, isolated in the office. Those that lead must not only be visible, but must communicate to those they lead. Chief among the responsibilities of leadership is to ask what people think. What are they seeing and experiencing within the company? How can we do the job better? The leader is often the most removed from clients, suppliers and employees, so seeking opinions of others is critical to learning. Tied to this is listening with intentionality to what is being said. Many leaders hear but don’t listen. Leaders must actively listen, seeking first to understand, then be understood. There is a quote that serves leaders well: “People should know what you stand for. They should also know won’t you won’t stand for."
The leader must be open, willing and ready to become better - as a person and as a leader. This is done by growing, by being open to new ideas and concepts, and by being open to coaching by others. Someone who has a closed mind, who believes that they know all there is to know, is not a leader who will take any organization far. Being in charge and being open to growth does not stop with the person at the top. The responsibility of leadership means that the person at the top should be requiring the same commitment to growth from their direct reports. If those reporting to the top executive aren’t interesting in growing, what kind of message do those people send to those in their departments or divisions?
Sandy McMahon’s concepts are right on target. Being a senior executive is not a plateau. It is a continuous journey and its direction is determined by just how good a leader you are.
Once again, if you want more information on the Executive forums of
Maver Management Group
Friday, May 9, 2008
We see it in the consulting world as companies are cutting back and becoming very defensive in their spending. Cost cutting is rampant and often without a solid plan that will protect the business for the future.
As we are working with our new clients, we are providing analysis of the current state of their business and the opportunities that exist for them. Often we see that while their business appears to be healthy on the outside, in fact it is very unhealthy underneath.
A local rancher shared some pictures with me of trees that illustrated this point. The first is a relatively healthy tree. You can see how solid it is.
What does this mean for you?
In its simplest terms, it means that you must find the “dry rot” and cut it out now. You can save the company by taking the right action. The “rot” could be in your product lines where you have allowed some to become vulnerable to competition or even unprofitable when expenses are allocated properly. It could be with your customers, as some of them no longer justify the expense to keep them. It could be with your processes that have become outdated and are nor efficient any longer. It could be with your organization where the development, care and nurturing of your managers has not taken place and you no longer have the appropriate succession plans or bench strength.
What can you do about this? Unfortunately, most senior executives have grown so accustomed and comfortable with the status quo that they are unable to see the issues clearly and the possible solutions appear to be so distasteful.
The rancher called in a consultant tree surgeon to identify the rotting trees that needed removal and to thin out the trees that needed thinning, even though they were currently healthy. The result was a much more productive environment and one that would thrive in the future.
Are you going to be ready when the recession ends to come out of it much healthier, or will you be weaker from the cost cutting and short term measures? Do you have a “tree surgeon” that you are using in your business?
Let us know if we can help.
Maver Management Group
Friday, May 2, 2008
Children’s fables are written as a vehicle to teach children valuable lessons about life. These lessons also have life applicability to adults and a direct relevance in business to senior executives and CEOs.
The Emperor’s New Clothes by Hans Christian Anderson is a fable about an emperor who allowed himself to be disillusioned. He was so caught up in what he wanted to see and believe that he didn’t see reality. In his case it was about clothing, but for you as a senior executive it could be one of many things.
For those of you who have forgotten the story, here is the thumbnail version. An emperor who was vain and cared too much about clothes hired two tailors who were crooks. They promised him the finest suit of clothes from the most beautiful cloth. This cloth, they told him, was invisible to anyone who was either stupid or not fit for his position. The Emperor was nervous about not being able to see the cloth himself so he sent his ministers to view it. They saw nothing, but knowing the issues praised the cloth. The Emperor allowed himself to be dressed in the creation for a procession through town. During the course of the procession, a small child cried out, "But he has nothing on!" The crowd realized the child was telling the truth and began laughing. The Emperor realized that the people were right but could not admit to that. He thought it better to continue the procession under the illusion that anyone who couldn't see his clothes was either stupid or incompetent.
You can imagine the results.
What does this mean to you as a senior executive you may ask?
“Everything isolates the CEO – be careful not to stifle dissent. Beware the Emperor’s New Clothes – Everyone wants to make you happy and not want to share bad news with you”
Kevin Sharer – Amgen CEO
Hard charging CEOs and senior executives often have this issue. Its not that your staff and the high priced big name consultant firms that you bring in want to deliberately deceive you. All, while they want to do good work, can have a vested interest in NOT exposing the flaws and possibly incurring your wrath. The farther down the line each project gets, the worse it becomes. The “halo” effect comes in to play and the flaws are overlooked. Since you are at least one or two people removed from the issue, it never gets to you.
I recently spoke with a CEO of a large manufacturing firm. His company had removed a popular product from the market that had lower margins in the expectation that customers could be convinced to trade up to new machines with better throughput and higher margins. Not so. The customers were unwilling to do this and stopped ordering. Given the production schedules, the intra-company reports didn’t show the problem. It wasn’t until a trusted employee took the CEO aside for a private moment and told him the truth. In essence, he became the young child in the Hans Christian Anderson story. The company suffered substantial losses. Several executives were asked to resign and extensive damage control was required with the customers.
Malicious? No. Just the CEO being kept out of the loop or given information that was biased to some degree.
This has to resonate with all senior executives no matter how closely you think you have your hand on the pulse of your business. In your case it isn’t a matter of pride like it was for the Emperor. Have you built up a support group that doesn’t provide full truth to you, since they want to look good in your eyes? Do you have big name consulting firms that want to keep the high priced contracts with you and therefore don’t really provide fully unbiased feedback?
Do you have someone that can provide you with unbiased feedback and is able to see the issues and opportunities that exist for you based on their extensive experience?
Maver Management Group