Exceptional branding

“The principles of branding,” I say to my clever MBA students, “apply across the board, to all categories.”

“Yes,” they agree, “except B2B. And luxury, of course. Oh, and startups.”

It’s always those three that they see as exceptions. And it’s got me wondering. Am I missing something here? Are there really whole sectors and situations to which the disciplines of positioning, targeting, insights, innovation and pricing simply do not apply? Let’s take a look.

Business-to-business

It’s certainly very different from business-to-consumer marketing, as anyone who has crossed from one side to the other will testify. And for the most part, it’s harder.

The most notorious challenge is the long buying chain, where all have an opinion, many have a veto, and few have authority to buy. B2B is also the home of that ice-cold, calculating function known as procurement, who play competitors off one another, raise the spectre of commoditisation, and drive down prices.

Into all this chaos and cunning, what would you rather be sending? A product or service with a name and not much else, or one that is underpinned by a trusted brand, with enduring values and positive associations, to make the difference when all else is equal?

Even procurement professionals are swayed by confident branding, as much as they protest the opposite, because purchase decisions have to be justified upwards and it’s a tough call to leave a famous entity out of the consideration. The adage that ‘nobody ever got fired for buying IBM’ was testament, as much as anything, to the sheer power of the prevailing B2B brand of its time.

So far, so basic. Seasoned B2B marketers will understand the difference consistent brand meaning can make in a crowded and asymmetrical marketplace. What makes their professional lives more complex in achieving it is a factor that’s far less prevalent in B2C: the salesforce.

On the one hand, sales teams are a fantastic ally to marketers. They visit multiple call points, have deep and direct conversations with customers, and bring early warning of any portentous shifts in the competitor landscape or customer psyche.

On the other hand, they prioritise the here and now and lobby for marketing ordnance to be deployed against narrow commercial objectives. Money spent on brand, from their point of view, is money that cannot be spent on showcasing the specific features and benefits they’re trying to lodge in buyers’ minds.

Innovation is always a flashpoint. While both sides welcome it, sales teams want it promoted in its own right, to meet targets today, while cool-headed marketers will insist that it forms part of a cogent, longer-term narrative.

In an uneasy, butting-heads relationship it is not always the brand team that prevails. But when it does, the rewards exceed anything on the B2C side. It’s not about shifting a bit more chocolate or shampoo; it’s about contracts for MRI scanners, jet engines, IT systems, 3D printers, breakthrough drugs. The stakes are high, the numbers are huge, and the role of disciplined brand decision-making is hard to refute.

Luxury

The students have a point. How can principles of branding typically deployed to increase distribution and drive penetration be relevant in a sector where scarcity is a requisite, and the customer base is confined to that fraction of the one percent who can afford to spend $45,000 on a watch?

They still have to want the watch, though. And know how to get their hands on it. And just as that watch will obey the physical principles of timekeeping, but with infinitely more grace and artistry than a lower-priced option, so the route to desire will give the same extreme treatment to the elemental principles of branding.

Luxury brands are where positioning is taken to its limits, with an almost obsessive attention paid to heritage. When I eventually get round to luxury in my brand-management elective teaching, the case I use is Tag Heuer, where newly installed chief executive Jean-Claude Biver revived the brand’s fortunes by taking it back to its avant-garde roots, reminding the world that ‘Techniques d’Avant Garde’ had always been what ‘TAG’ stood for.

Mass brands are less adept at exploiting their heritage because they prefer to listen to consumers and work back from insights. Luxury brand marketers grasp the meta-insight that their customers place a lower value on being heard than being inspired – which is why those intransigent creative directors, for all the difficulty they bring to the lives of luxury marketers, are such a vital component in the mix.

Positioning, targeting, insight and, self-evidently, pricing, are all facets of luxury branding. But, just as with everything else they do, these brands take it to an altogether different level.

Startups

We can be a bit brisker with this one, because it is not me making the case for branding, but investors.

The ongoing, and not unreasonable, argument from students is that at a time when resources are crazily stretched, there are other exigencies that take priority: minimum viable product, A/B testing, technical development. And in any case, surely it’s too early to clothe a new venture in brand garments it might soon grow out of?

My guest speaker – an entrepreneur who ran marketing for a successful startup in mental health – sets out the reality bluntly. The first target audience for a startup is not the eventual customer, important though that might be. It is the investment community. And what investors want to see are four things: defensible IP, economies of scale, network effects and a promising brand.

His advice is to root brand meaning in the problem the new venture seeks to solve, not the product or service itself, since that is almost certain to change. But if the branding is not there at all, there will be no takers.

Veteran investor Warren Buffett gives an insight into why. He describes a strong brand as a moat around a company’s commercial offer; something defensible that, in a capitalist system, keeps competitors at bay. He looks for that moat to be broad and deep.

Postscript

Buffett’s ‘moat’ metaphor is a vivid one, and I’m going to borrow it in a different context here. Like most of us, I am not above digging a moat around my own assumptions and beliefs, as a bulwark against assault on the intellectual property that’s been so long in the construction.

If anyone is going to breach that moat, and challenge the edifice of certainty beyond, it is students, with their global perspective, their suppleness of thought and their characteristic attitude of benign defiance. It is a reminder of one of the joys of postgraduate teaching: learning can flow both ways.