It's Time For B2B Brand Equity To Step Out Of The Shadows

Dipanjan Chatterjee

B2B brand management has come a long way from its roots in consumer packaged goods and has gradually branched out to play an equally central role in B2B markets. B2B CMOs are just as invested in bettering their brands as B2C. No longer relegated to industry rags and trade shows, B2B marketing is entering a new age, with firms like CA Technologies, General Electric, and IBM in the vanguard. At a Forrester event, General Electric CMO Linda Boff remarked that GE is often the first brand —not just the first B2B brand —on platforms like Pinterest, Snapchat, and Vine.

But are most B2B brands successful in following in the footsteps of these trail blazers? Forrester research with over 1,000 B2B and B2C decision-makers reveals mixed results. Here's the good news: B2B CMOs include Brand in their top three priorities and consider Brand Management to be the strongest skill set in the department. But here's where it gets ugly: 25% of B2B CMOs consider Brand Awareness an important marketing metric; only 15% believe Brand Equity is important.     

This chasm between awareness and equity, which also exists for B2C brands, can prove particularly vexing and stubborn for B2B because of some commonly held misconceptions:

  1. Brand matters more for B2C (a lingering notion despite being soundly dispelled)
  2. The role of brand (in a traditional sales-driven culture) is to drive awareness and fill the mouth of the funnel (the reality points to a vital role in securing choice and loyalty)
  3. Brand Equity is amorphous, eludes specification, and hence best avoided (there exist many robust quantitatively-specified equity models
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Not just good. Not just great. Build an amazing brand.

Dipanjan Chatterjee

There are plenty of good brands. And some great ones. But few can arouse the intensity of emotions that make them inseparable. Brands achieve resonance at the point of inflection where the interaction transforms from transaction to relationship. And like any relationship, resonance occurs in intensifying layers, with the best brands being able to trigger an enduring and self-amplifying relationship.  

Patagonia has practically written the book on how to do this right. Newer brands like Spanx and Dollar Shave Club have built a loyal following by rewriting the rules. Kimpton Hotels & Restaurants and CrossFit have built communities that thrive on shared experiences. And “legacy” brands like USAA and Delta Air Lines have effectively engaged their communities to strengthen their bond.

Forrester clients can read about these Resonant Brands in my new report (From Great To Amazing: Building Brands With Enduring Resonance). Here’s a quick preview of how CMOs can steer their brands towards Resonance:

 

Get Emotional

If you deliver a great customer experience, you’re halfway to building an amazing brand. Now, ramp up on emotional connections — they are much stickier than functional excellence.

Build Communities

An engaged community will do the heavy lifting around building brand and salience for you — if you give them a reason to. Create the right environment and the context for your brand communities to thrive.

Have A Unique Voice

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Connecting The Human Being To The P&L

Victor Milligan

The fact that human beings make affinity and spend decisions based in large part on emotion is not new news. It is the underlying logic of advertising – heartstrings are the early sparks of revenue. But there is a reason that most companies have not baked emotion into experience design and into the day-to-day engagement with customers. It's hard to do.

Emotions are situational, dynamic, and hard to read. Yet the gulf between the science of emotion and the business of emotion is closing, creating a set of new tools to convert great experiences into sustained growth.

Last week during an online event, I brought together thought leaders, Anjali Lai, Harley Manning, and Roxie Strohmenger, to translate the science of emotion to the pragmatic business application of emotion. If you were unable to watch it live, here is the replay – and for good measure, here are key takeaways from our discussion:

  • Emotion is the next step in getting to know your customer.
    The customer is now the center of the universe, and to win in this market, companies need to know – really know – their customer. Beyond satisfaction, advocacy, and journeys, companies must understand what makes customers tick and how to influence affinity and spend. Emotion is not the next thing "just because"; it gets to the heart and soul of operating in a customer-led market.
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The Vanishing Dichotomy Between B2B and B2C Branding

Dipanjan Chatterjee

 How My Experience As A Decision Maker Formed My B2B Branding World View

Before I threw caution to the wind and launched myself with wild abandon into the world of branding, I had a normal life.  For a few years, I ran a retail business for a Berkshire Hathaway company (and since everyone asks, yes, I did meet and have dinner with Warren, although I suspect his recollection may not be as crisp as mine.) We manufactured and sold uniforms to government agencies: Police, fire, EMS, postal service, and others. As you'd expect, our customers were quite insistent that the fabric for the uniforms be made in the U.S. That is until budgets got slashed, and belts got tightened. Then the only thing that mattered was cost. So we were sent scampering to find the lowest-cost fabric and our global fabric sourcing program had to go from zero to sixty in a matter of months. 

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This Black Friday, Should I Stay Or Should I Go?

Dipanjan Chatterjee

Black Friday approaches. I should be breathless with anticipation. You see, I’m a brand strategist. To me, the prospect of millions of people reveling in thousands of brands and turning the bottom line from red to black is brand nirvana. It’s like Christmas came early. Which it does, in a way, on Black Friday.

Yet, the tendrils of self-doubt infiltrate my exuberance. Must a weekend so treasured for time spent with friends and family be ruined by being pepper-sprayed at Walmart, by being gored in the Pamplona bull run down the aisles at Best Buy to save 50 bucks on a TV I don’t need? Do we really need to spend any more time glued to our devices buying more clutter?

Maybe you feel this way, and maybe you don’t. But you would expect brands to be cheerleaders for Black Friday, right? Wrong.

Black Friday 2011: Patagonia buys a full-page ad in the New York Times and instructs readers not to buy its jackets. That’s right, they pay good money to tell folks not to buy their stuff. Citing the “astonishing” environmental cost of making jackets, they encourage people to reuse and recycle. Fast forward to Black Friday 2016. This year, Patagonia is donating 100% of Black Friday sales to grass roots organizations "working to create positive change for the planet in their own backyards."  Yes, you did read that correctly. 100%. And sales, not profit.  

Black Friday, 2015: REI decides to remain closed that day and give all its employees a paid day off. No, their P&L does not self-combust. Instead, they choose to close shop again for Black Friday 2016. REI’s CEO says that this “reinforces both REI’s culture with employees and the message that resonates with the company’s core customer base.” About 2 million people plan to #OptOutside with REI.

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The Threat (And Opportunities) Facing Banks Today

Victor Milligan
Banks serve as the bedrock of the economy, and that bedrock is changing. These changes represent a direct attack against the current banking business model and associated P&Ls. Our Empowered Customer and North America Consumer Technographics data tells us:
 
  • Only 50% of bank customers are willing to keep their existing level of business with their bank.
  • Only 59% of bank customers are willing to purchase additional products or services, meaning 41% are not.
  • Almost 50% of Progressive Pioneers – the most progressive of our five customer segments representing 25% of consumers in 2016 – indicate they are likely to switch banks in the next year.
  • 21% of Progressive Pioneers have closed a bank account in the past 3 years.
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Does Trump’s Victory Signal The End Of Data-Driven Decision-Making As We Know It?

Sheryl Pattek

It’s not been an easy week or so for many of us in the US. Why did the election results surprise so many? How could we not have known how divided a country we were?

And what happened to a belief in the principles of fairness, respect, and equality for all, which formed the foundation of our democracy — despite an election’s outcome? One explanation is that many relied on predictions, polls, and data and misjudged the impact of voters’ emotions and sentiment on the race . . . and badly so.  

Four years ago, just after I joined Forrester, one of the first blog posts I wrote was about how the smart use of data helped elect Obama as our 44th president. In that post, I talked about how Obama and his team employed data science from the start to understand the electorate and target their engagement and messaging effectively to inspire voters to action.

In fact, to quote that blog post:

“What I found the most fascinating is how the use of data, the right data, served as the foundation for Obama’s successful reelection. Starting on election night, the analysts on the best-known news shows were already talking about how calm and confident the Obama team members were. And why were they confident? According to Obama’s team, it had the data to back up its march to a second term. The team members believed that data and how they used it was one of the biggest advantages they had over the Romney campaign. Think about that for a minute. Obama, traditionally seen as the image and message guy, ran his reelection campaign based on using the right data effectively. And it worked.

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Kale Is Good For JetBlue And Other Tales of Brand Resonance

Dipanjan Chatterjee

A powerful brand not only has to be extremely relevant to prospects, it has to make itself an invaluable and inextricable part of customers' lives as well. In the recent Forrester report called Navigate Your Brand To Resonance: Four Milestones To Brand Building, I outline a road map for CMOs with four clear stops, from salience to resonance, on the road to building a powerful brand. This journey is a must-take road trip for CMOs looking to assess the state of their brand and craft a strategy for taking it to the next step. The milestones are shown in the figure below:

The roadmap traces a deepening connection between brand and consumer built on a foundation of customer-obsessed experience delivery and powerful emotional connections. Good brands succeed in being salient, inducing trial, creating memorable experiences, and forming emotional bonds. Amazing brands do more – they energize the entire brand-consumer relationship in a way that creates a resonant and enduring bond. Brands that achieve this resonance are twice blessed -  they reap the rewards of loyalty with existing customers and also set in motion a powerful recommendation engine which feeds the awareness and salience funnel. As Forrester research has consistently shown, word of mouth and recommendations are far more credible than brand-generated paid and earned media.

In the report, I provide several best practices of brands on this journey from salience to resonance; here are a few:

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Amazon Spends Big To Deepen Its Customer Relationships

James McQuivey

Wall Street followers found much to be concerned about in Amazon's quarterly earnings. Shipping costs went up 43%, operating costs are up 29% overall and the company's operating margin fell to a ghastly 1.8% (down from 4.2% the quarter previous). In light of all this, the stock is down 6% in after-hours trading.

Which makes the stock a buy, in my book. (Disclosure: I'm not a financial analyst, I'm a consumer market analyst, so don't take my investment advice. Oh, and I don't own any Amazon stock outside of mutual funds.)

Amazon's margin went down precisely because the right costs went up. Amazon continues to add millions of Prime customers and investing in those customers costs money. Specifically, Amazon has opened 23 warehouses since July. Those warehouses will be in position in the crucial holiday rush to ensure not just two-day delivery, but one-day delivery more and more. And in some cities, one-hour delivery.

As the Wall Street Journal quoted Amazon CFO Brian Olsavsky: “We acknowledge that’s expensive,[but] customers love it.”

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Transparency Is The New Black At Delta Airlines And Everlane

Dipanjan Chatterjee

Transparency In A New Light

Brand practitioners generally talk about transparency only when crisis hits the fan. There are text book examples of how to do it right, like Johnson & Johnson's deft management of the 1982 Tylenol poisoning episodes in Chicago. And then there are recent debacles: VW’s drawn-out admission of guilt, Samsung's self-combustion, and the Wells Fargo CEO's cringe-worthy testimony to the Senate Banking Committee. Reputation experts will tell you that transparency is the perfect antidote to crisis. But I'm here to tell you that transparency is not just for crisis control. It's fast becoming the new normal. In what Forrester has called the Age Of The Customer, a significant shift has occurred - away from institutions, and toward customers.  This shift not only armed the consumer with much more information, but also created an expectation that brands share information more readily – information that may otherwise sit behind opaque corporate screens. Most of the brands are not there yet; many are still adjusting, often uncomfortably, to the vanishing asymmetry of information between brand and consumer. 

For progressive CMOs, this lag between consumer expectation and brand delivery presents an opportunity to differentiate the brand. Proactively trumpeting transparent brands and giving customers the tools to benefit from this transparency can be a game changer and a source of advantage. Everlane, an online retailer of clothes and accessories, and Delta Airlines provide excellent examples of how to do this right.  

Two Case Studies in Transparency

Everlane 

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