Are you a B2B company, putting (or considering putting) significant effort and significant resources into developing a coherent brand for your product? Researching the marketplace and analyzing competing brands? Establishing strategy sessions to review and select the best brand identity?

If you are, you're probably wasting a lot of time and a lot of money. For the majority of B2B companies, branding is very likely of little or no value.

What, after all, is the purpose of branding? Here's my definition:

Branding is a way of helping non-knowledgeable customers make a low-risk buying decision for a commodity product with little inherent differentiation.

You know, like laundry detergent. There is no inherent differentiation between Tide and Cheer and Downy (all Proctor and Gamble brands). So P&G—the master of brand management—creates brands to reach market segments. And they promote the brands at significant expense.

Now, when customers walk into the market, they head over to the detergent shelf, spot their brand by the packaging and logo, plop it into their shopping carts and move on to the dog food. If you stop them at that point and ask things like, "What are those little green crystals?" or "Why does Downy make your clothes smell fresher than Tide?" I daresay you're not going to get much of an answer.

That's branding at its most effective.

Should You Brand?

But have I described your marketplace? Are your customers uninformed? Is your product devoid of any inherent differentiation? Is it a low-risk purchase?

If the answer is yes then by all means, brand away. But we suspect the answer is no. We suspect that your customers know a great deal about your product, and about your competitor's product, and how those products satisfy their needs. (That's what a sales cycle is for, isn't it?)

We suspect that your product carries with it significant inherent differentiation—manufacturing methods, embedded technologies, installation process, support services, and of course features...all sorts of things you don't find in a box of soap suds.

And as far as risk goes—your customers are in all likelihood risking significant business processes on your product, taking a significant standardization risk, and quite likely risking a fair amount of money (not to mention putting their own careers at risk if they make a wrong move).

Within this context, brand means little or nothing to your customers. Let me repeat that: LITTLE OR NOTHING. Your reputation in the marketplace does, and your customer base does, and customer testimonials do, and the kind of press and analyst coverage you get does. But none of that is brand.

That's right: No matter how agencies and consultants like us try to redefine branding—a redefinition whose motive is invariably to convince companies to sign up for branding programs—if your company is selling differentiated product to a knowledgeable marketplace where the buyers are taking serious risks, every nickel you spend on branding is a nickel better spent on positioning, product specification, customer service, strategic targeting and segmentation, and a lot of other truly useful marketing strategies and tactics.

More Than Word Play

Am I making nothing more than a semantic distinction here? Is one man's branding another woman's positioning?

I would be, if it weren't for the fact that companies spend (read: waste) a lot of money building and a whole lot more establishing the brand in the marketplace.

It doesn't matter how hard you bang your branding drum out there. In the end your customers are going to build matrices of products and features and benefits and prices, compare competitive offerings, subject each company to a rigorous review cycle…and then make a decision. (Can you imagine that happening with a pair of Air Jordans?)

I mean, have you ever heard any of your customers tell you something like, "Oh, I don't really bother to go through all that buying process nonsense--I mean, it's just EAI isn't it? Heck, I just look for your logo and write a PO. You're my brand of middleware!"

If the answer to that question is "never," what are you bothering with branding for? Why are you wasting your time and your money trying to apply commodity-marketing practices to significant business sales and buying cycles?

The most common answer we get when we ask that question is, "Well, come on Mike, don't you know anything about marketing? Branding is part of the marketing mix!"

Not your marketing mix, it isn't.