Tuesday, March 20, 2007

The value of B2B brands

Jon Miller of the Marketo blog has a very powerful post refuting some people's belief that B2B brands don't matter, and that investing in brand-building is a waste of money for B2B companies.

I'd go as far as to say that anyone who thinks that brands don't matter in business-to-business sales hasn't sold to many businesses. And certainly hasn't been involved in buying much for their companies.

In my experience, selling with a well-established brand behind me is much easier than selling an unknown brand. And buying a well-established brand conveys stability, longevity, predictability and a measure of security.

By way of the evidence of B2B brands' value, I'd point readers to the March Harvard Business Review, in which James Gregory of CoreBrand and Donald Sexton of Columbia University describe their method for calculating the brand equity of business-to-business companies. (A free copy is available by following this link.) Sexton and Gregory concluded there were significant deltas in brand equity between leading companies and lagging companies across many B2B industry groups. For instance, in the Office Equipment category, brand equity ranged from 18.37% of market cap (highest) to 4.26% of market cap (lowest).

If B2B brands are meaningless, how then to explain the differences in brand equity these statistics illustrate?

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Jon Miller said...

Thanks for the link to the HBR article -- very helpful!