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TOB market people often encounter the boss's question: Do you want to be a brand? Is the brand useful?
This question is difficult to answer. Some ToB enterprises sell widely and do not make brands, but they also develop well.
However, there are also ToB companies that attach importance to brands. At the airport, you can also see advertisements of ToB brands such as Huawei Cloud and Tencent Cloud.
Whether ToB is a brand or not cannot be generalized. Different enterprises have different situations. I used to draw a picture:
ToB enterprise brand promotion demand
Now it seems that it is not concise and accurate enough.
Even for the same enterprise, the role of brand in different stages is different.
For example, we can roughly divide the development of ToB products into two stages: 0- 1 and 1- 10.
0- 1 stage
In the cold start stage, ToB generally does not need to do brand promotion. What is most needed is to find some target enterprises to try out.
For example, when Alibaba Cloud first entered the market, it was mainly small and medium-sized enterprises. Because large enterprises basically build their own IT and operate by themselves. Cloud computing is more attractive to small and medium-sized enterprises, so that they don't have to buy a lot of servers and other equipment for peak traffic, resulting in a waste of resources.
By cutting into small and micro enterprises, it not only educated the market and expanded Alibaba Cloud's own market share, but also laid the foundation for cutting into large enterprises in the future.
After obtaining the first batch of seed users, Alibaba Cloud paid attention to the feedback of users' actual use effect and took good care of them, because during the trial period, customers may give up the trial for any reason, so it is necessary to find out the problems and solve them in time to retain seed users.
Then, analyze the behavior of seed users, find out the main source channels of users and the most active functions used by users, and then make targeted optimization, including product and team goals.
1- 10 stage
After the seed users try out and verify the feasibility, ToB enterprises need to target customers BD in the target industry. The most common practice here is to strive for industry benchmark customers (well-known enterprises in the head) as much as possible, and build benchmark customers into company benchmark cases, so that it is more likely to impress other customers in the industry or cooperative customers in the upstream and downstream of the industrial chain.
When ToB business can meet the needs of industry target customers, it can create a large number of customers similar to BD, thus maximizing product scale and revenue.
At this stage, carefully making brand manuals and benchmarking case packages and increasing sales staff BD can significantly bring about performance growth.
But when the number of salespeople and customers increases to a certain extent, there will be a "marginal diminishing effect". At this time, it is necessary to maintain existing customers as much as possible by improving the strength of the back-end product and service team, and improve the renewal rate and customer life cycle value. Because compared with developing a new customer, the cost of maintaining old customers is obviously much lower, and old customers can continue to generate value.
In the end, sales-product-service, these three links basically constitute a closed loop for the sustained growth of ToB business, and they influence each other, which requires enterprises to configure and cooperate according to their own actual conditions.
Generally speaking, at this stage, brand actions can accelerate business BD to expand customers, and brand actions such as big customer signing report, case results packaging, industry conference marketing, content marketing and joint promotion will all run.
Therefore, we can simply say that ToB enterprises enter the stage of expansion and development, the greater the role of brands.
Let's give another example of a purchasing scenario. Enterprises must find companies with certain brands and strengths if they want to purchase fiscal and taxation systems. If it is just looking for someone to do bookkeeping and tax returns, then simply find an accountant or a small company to solve it.
Therefore, we can say that the more subdivided the supplier market, the smaller the brand role.
There are many such examples.
In order to fully explain this truth, we need to use the concept of "brand power"
I will use the word "brand power" for the time being to illustrate the value of brands in different situations.
(Ps。 Coincidentally, all my concepts are similar.
We can list the following dimensions:
Scale
Different stages of enterprise development
Degree of supplier market segmentation
Number of competitors
Degree of market monopoly
Complexity of purchasing process or customer relationship;
Number of purchasing decision makers;
Different buying scenarios
The larger the enterprise scale, the greater the brand power;
The more enterprises are in the stage of rapid expansion, the greater the brand power;
The more subdivided the supplier market, the more difficult it is for the brand to stand out;
In the market competition scenario, the oligopoly market with fewer competitors or the unified market with medium competitors has the highest brand power, such as the current market competition of cloud computing vendors;
When there are a large number of competitors in the market, such as accounting companies, advertising and printing companies, brand VI design companies, brand power is very low;
When the market is very monopolized, the number of competitors is close to 1, and suppliers have a very high voice. People have no choice but to buy goods from monopolists or give them up. Brands are meaningless to buyers. For example, the Dutch mask aligner giant ASML has more than 90% of the global market share, and chip manufacturers have to beg him.
In a very complicated purchasing process, the final decision usually depends on many continuous local decisions. This greatly reduces the possible influence of supplier brands.
In the product market with relatively simple procurement process, the brand power is higher.
The more decision makers involved in the procurement process, the more important the brand is.
Then, for enterprises with strong brand power, why should we strengthen the brand? What is the function of brand?
Reason 1: The number of similar products and services surged, which brought fierce competition and product homogeneity.
Reason 2: It is getting more and more complicated.
Too many choices are not only common in ToC field, but also in ToB market. The surge in the number of similar products and services leads to fierce homogenization competition, and functional advantages are often quickly imitated. Innovative products and services may not achieve long-term sustainable competitive advantage, and technological Excellence is no longer the only key factor for success.
In the increasingly homogeneous market competition of products and services, a strong brand may be the only feature that distinguishes it from its competitors.
Take IBM as an example. Although many IBM products do not provide unique functional advantages, professional buyers will still choose IBM over other less well-known competitors simply because it is a trustworthy brand. IBM has been trying its best to provide more added value beyond technical performance.
Today, almost all enterprises tend to provide more and more complex and diversified solutions. The company has stopped selling a single product or service. They sell solutions. These solutions may include a whole set of different products and services, which are very complex and often difficult for customers to distinguish. In this case, the brand may be a very useful tool to reduce the complexity involved and spread key related information.
Just like smart city solutions, similar to "gobbledygook", buyers can't understand it anyway. Then choosing famous brands, such as Ali, Huawei and Tencent, is more secure. If you cooperate with an unknown brand, you may be worried about its technical strength.
Mckinsey and MCM survey found that the brand value ranking in B2B field:
1. Reduce procurement risk, accounting for 45%;
2. Improve information efficiency, accounting for 41%;
3. Added value (brand premium)/benefit of creating brand image, accounting for14%;
Comparison of the Importance of Brand Functions in B2B and B2C Fields
This is contrary to the TOC market. Brand premium or image creation benefits are far ahead in the consumer market (40%), information efficiency accounts for 37%, and risk reduction only accounts for 23%.
The following are elaborated respectively:
Customers' choice of branded products can reduce the risk of making wrong purchase decisions. Brand makes customers believe that the expected performance of products is good, and provides continuous hints for product benefits.
In the field of ToB, corporate customers often purchase with high customer orders, and they all have the basic desire to avoid risks. Brands can help them prove the rationality of their purchasing decisions.
To put it bluntly, the person in charge of purchasing is looking for a well-known brand supplier, advertising Ogilvy & Mather, doing cloud computing for Huawei Ali Tencent, and doing fiscal and taxation software for Kingdee UFIDA. In case the service is not good enough, it is the supplier's problem, not the buyer's. After all, the most famous supplier in the market has been found.
If the person in charge of purchasing chooses an unknown manufacturer, in case it doesn't do well, the boss may think: Is there something in the procurement, or is there something fishy in the procurement process?
The brand can prove that the purchase choice is correct.
An important role of brand is to improve communication efficiency, so that customers can know you faster, understand you and trust you to a certain extent.
Brand products make it easier for customers to collect relevant information. The information about products is concentrated in the form of brands, which is conducive to the success of enterprises in a new or chaotic product environment. Moreover, brand products have cognitive value, and customers can quickly and conveniently identify their trusted brands again.
As can be seen from the above figure, there is a huge difference between TOB and TOC markets in this respect.
In TOC market, the biggest role of brand is to increase the intangible value (emotional value and symbolic value) of products and increase the product premium.
Because the role of ToC consumers is usually relatively simple, the initiator, decision-maker, buyer, influencer and user are all the same person, or two or three people. The unit price of customers is not high, and they are easily influenced by emotions, and they can have brand preferences and impulsive consumption.
People who like oppo, Xiaomi, Huawei, iphone and one plus mobile phone can have their own reasons, or they can buy this product because they like spokespersons.
Why don't TOB enterprises invite celebrity spokespersons and bombard them with celebrity advertisements? Because enterprise procurement must be based on rigid demand. Initiators, decision makers, buyers, influencers and users are many different departments and people. In this process, the business department can apply to initiate the purchase. The purchasing department is responsible for studying and comparing the products of different enterprises, and then making a report to the boss or management, and then the purchasing department is responsible for purchasing. The technology department and the finance department are important influencers and will put forward their own opinions.
Therefore, TOB procurement has the characteristics of "long decision-making cycle", "high trial and error cost" and "high customer unit price". Through this whole process, there are almost no perceptual decisions, only purely rational decisions. Therefore, the premium ability brought by brand emotion is greatly reduced.
Although the function of ToB brand is not to add emotional value to its own brand, it can bring value of the image to customers. By choosing a brand, customers can not only show the image of the whole enterprise to employees, but also show it to the outside world.
For example, the mobile phone is produced by Foxconn factory, which feels that quality control is more secure; When the car uses Huawei's intelligent in-vehicle system, it feels more reliable;
To sum up, ToB brand has three major values: reducing procurement risk, improving information efficiency and increasing added value of products.
Brand to brand value
In a highly complex environment, brand is an effective differentiation factor, which can break through the chaos and make the company known and familiar to potential customers.
We summarize the role of brands in the ToB field as follows:
Differentiation: In the homogenization competition, brand is an effective and eye-catching means of "being different".
Protect the future of the enterprise: In many business fields, only those companies that choose branded products from the beginning can survive. With a strong brand, enterprises can easily survive various crises;
Create brand loyalty: Brand helps companies change from transaction-based marketing model to relationship-based marketing model. Customers are always the most important. Enterprises can create brand loyalty when they strive to continuously deliver value according to their brand promise.
Improve marketing efficiency: enterprises with strong brands can benefit from improving communication effects. Compared with those completely unknown products and services, marketing efforts will be more acceptable. For example, other brands are more willing to cooperate when doing brand joint activities. It is also easier to recruit people when holding conference activities.
Creative preference: brand preference effectively excludes competitive brands. This phenomenon is common in TOC market and has certain value in TOB field.
Charge a premium: Enterprises with well-known brands can bring customers an image of value, so they can charge a premium for their products and services, so that enterprises have stronger strength to face the competitive pressure. The purchase price of an enterprise has repeatedly reflected that the ToB brand is the most valuable resource, and the brand can greatly increase the purchase price.
Create brand image: Brand makes enterprise's value proposition more attractive and eye-catching. Most importantly, a positive brand image can also attract all stakeholders, making it easier for enterprises to recruit and retain talents.
Improve the conversion rate and increase the sales volume: For example, if a ToB enterprise puts in a search advertisement and obtains customer clues, the customer has never heard of this brand, and the transaction rate will be very high. The stronger the brand, the higher the turnover rate of customers. Strong brands help to improve the conversion rate and sales volume, and bring profit growth.
To sum up, compared with other assets, a lasting brand can bring more benefits to enterprises and become an emotional shortcut between companies and customers. A distinctive "worth having" brand image can build an emotional and rational bridge between customers and companies. Brand personality and quality reputation can effectively distinguish enterprises from competitors, cultivate customer loyalty, and then achieve growth.
Truly successful enterprises are always those brands that occupy a unique position in customers' minds.
Finally, a picture summarizes the role of ToB brand:
The function of TOB brand
Finally, some ToB enterprises really don't need to do "brand promotion", but the basic brand elements, such as brand positioning, VI vision, brand slogan, brand label and brand description, still need to be done. We can call these "TOB brand infrastructures".
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Original title: "ToB enterprise: what is the role of brand? 》
Author: Chen Xiaobu
This article comes from 36Kr Enterprise Service Review.