Buyer2Brand

Brand Research is not Market Research

One of my favorite online resources for trends, case studies and strategic approaches to branding is Brandchannel - hosted by Interbrand. It isn't just a collection of the firm's own work, but offers a real forum for discussion and third-party perspectives.

This article caught my eye by a guy named Joseph Benson. Joe is a B2B brand strategist whose past clients have included technology and financial services firms, among other industries. He's also the former VP of Brand Strategy at Sapient Corporation. I don't know him personally, but he offers some easily digestible insight on the difference between market research and brand research.

Most marketers understand the power of research to quantify buyer demand for new and existing products. Standard market research surveys are very useful to determine direction in areas like pricing, packaging, technical requirements, and purchase intent. In the IT industry, I've found that technology vendors are great at using customer research to gage customer satisfaction with the product itself (features/functions) as a direct feedback loop to Engineering, but not so great at examining their own organizational performance to the extent it informs the customer's total "brand experience".

Typical market research studies are not focused on qualitative measures - such as buyer perception, product preference drivers, and the relative success of vendor marketing efforts. Brand research on the other hand aims to understand WHY customers chose the product they did - the true differentiators among competitors as the buyer perceives them - and why they would be willing to pay more for a stronger brand. Brand research is best conducted by the vendor either in one-on-one interviews with its most profitable customers (who cares why the losers bought?!), or when appropriate, in small focus groups. 

So the basics of brand research answer the following questions: Why did your most profitable customers choose you? Who are the market influencers they trust to advise them? What marketing messages resonate most with them? The folks who specialize this stuff are usually domain experts, so they know enough about the market to probe deeper.

According to Benson, brand research is the way to go in the following quick-hit scenarios: when a company (new brand) is first launched into an existing category; when a vendor is exploring if its brand can be extended to a new product type without dilution; and when companies merge and need to merge their brands correctly. Mature organizations use brand research more regularly to steward the brand itself - continually measuring the changing dynamics of customer choice and aligning the organizational behavior of executives and frontline employees behind it. In the final scenario, when a vendor's offerings have become commoditized and the brand diluted, research can find new meaning and relevance with target customers and teach the organization how to revitalize its outdated promise.

Rebranding is about realignment

I've written on rebranding before, but its a decision-making process that merits more discussion.

Most IT vendors are not "startups", in the strictest definition of the term. Most are small companies that are actively selling and winning first customers, then servicing and supporting those customers while working to improve their product or service. Most have active PR and other outbound marketing initiatives that build awareness and fill the sales pipeline. All assert their positioning in the marketplace relative to competitive alternatives.

In a new book Why Johnny Can't Brand (Portfolio 2005), authors Bill Schley and Carl Nichols explore when and why companies should rebrand. They argue that many companies rebrand prematurely or unnecessarily, shooting good brands in the foot instead of strengthening them. The three most common catalysts for misguided rebranding are: new executives trying to make their mark, the need for instant gratification trumping long term commitment, or organizational malaise/boredom.

To gain a foothold in the market, small to mid-size B2B technology vendors typically "chase the money" - closing business for the sake of the reference and the revenue, thanks to the sales staff's existing relationships. If branding's maxim is "customers create your brand", then what happens if some of these early customers fall outside of the positioned target market? Over the years it typically takes a vendor to attain critical mass, markets are in constant flux. Differentiation can be challenged by new competitors or emerging trends. Since "brand happens" with or without the vendor's active stewardship, the result over time can be a spotty understanding of exactly why customers utilize the product or service. The daily demands of customer growth and pace of market change can outdate, dilute, or distract a brand.

Such ventures are prime candidates for Rebranding - which doesn't always have to mean a complete overhaul. Rebranding can in fact have nothing to do with redesigning visual assets (logo, tagline) and instead focus entirely on operational or internal mindset changes. Rebranding is essentially an exercise in realignment. It is rediscovering the single unifying principle that aligns the organization with its customers. It means listening as those who bought tell you why you are special, why your offer resonates, and why your product is relevant. It is evolution more than revolution, but holds great power to re-energize a company.

If you are considering Rebranding, make sure it's not for one of the reasons Schey and Nichols cite above. A quick brand audit is a great way to get a read on if your brand is truly misaligned, not just fatigued. A reinvigorated brand can deliver more qualified sales leads & stronger customer loyalty, but brand equity needs time, dedication and maintenance to grow. Rebranding should not be undertaken lightly, and management support is a critical success factor.

Positioning vs. Branding

Many of the same tech marketers I have interviewed as part of this blogging project negate the importance of Branding while holding up Positioning as the ultimate strategy for winning minds and markets. This distinction is important to address, as the two disciplines are closely related, if not two sides of the same coin.

Both Positioning and Branding are driven and defined by precise differentiation from competitive alternatives. The difference is in the direction of the communication. A vendor’s positioning is what it says to the market, and its brand is what the market says about the company in reply (and by extension its product or service). The vendor asserts its competitive positioning, executes against this in the market, and then is rewarded or punished with its brand. If the two perspectives contradict, then execution of the positioning has failed and the brand is broken. In the IT world of the complex, considered purchase, listening to what customers really think about you and your offering is of ultimate importance in this symbiotic conversation between Position and Brand.

Positioning is largely an internal consensus exercise. A methodology for getting all company stakeholders marching in the same direction. It is informed by present market conditions and competitive realities, to be sure, but is often unable to predict actual customer application of the technology or changing market conditions. Often target segments and value propositions are dictated by who buys what and why.

Without customers, there can be no brand (no, a logo is not a brand). A startup that has yet to attract its first customers can assert its positioning, but does not yet have a brand. It is talking to itself. It has yet to fulfill promises, built no reputation, and received no grades from the market. At the beginning, Positioning drives everything.

But a few months after a startup celebrates its first live customers, an early brand identity can be researched and formulated. It is at this stage, when company and product brand are one in the same, that brand auditing is easiest and consistent brand building can be instituted within the marketing organization. As the company continues to grow, its internal corporate culture and values emerge to further inform its brand personality. With market success, the distinctions between brand and position come into clearer focus.

Microsoft exec on Dot-com hangover

As part of my primary research study into the current state of B2B tech branding, I talked with Doug Free of Microsoft. Doug heads PR in Silicon Valley for the company, making sure that Bill G. and Steve B. and Ray O. are visible and connected whenever they visit our corner of the world. He was my client back in the 1996-97 timeframe when he headed marketing at an early web collaboration software company. His experience with branding goes deeper than logos and taglines, as he helped launched the GO Network for Disney when he worked at Infoseek.

Doug believes as I do that our industry is still suffering from "dot-com hangover". The conventional wisdom holds that branding is expensive because it necessitates a big budget to make a big splash. During the Boom, branding as a strategic marketing practice went out the window, and the term became synonymous with lavish launch parties at The Tech Museum and full-page ads in The Industry Standard. Good branding = high burn rate. There simply wasn't enough time - or even the need, it was widely believed - to steadily build one's reputation with customers over time when the IPO horizon for most startups was under a year.

Branding professionals must share some of the blame for this cheapening of our art during this period, as many of us were all too happy to collect high fees for actually planning the parties and placing the ads! Yet in doing so, we did B2B IT companies a disservice, missed an opportunity to soundly educate an industry, and are still suffering the fallout.

As Doug rightly points out, many tech marketers first real experience with branding was spending the "funny money" of the Boom, and he cited an example from his own experience. He recalled that one of his employers during the period wanted to run a major ad campaign to reach only a handful of key targeted investors. High-touch, low cost alternatives would have better driven the financing round but were rejected outright. Of course it was silly behavior in hindsight, Doug explains, but everyone thought - and was told by "the experts" at the time - that big spend was the way to build big brand. But every branding pro worth his/her salt knows that attention/awareness/buzz are the fringe benefits of a strong brand, not the goals themselves.

In all, Doug remains pretty discouraged with IT marketing professionals use of the term "branding" with vendor management teams. He thinks C-level understanding of the practice today extends merely to tactical design deliverables or is locked inexorably into the concerns of B2C markets. He asks what is easier: to educate an entire industry or change our language to fit the market? Doug was not completely pessimistic, however, and sees a lot of opportunity for branding to impact service-oriented B2B markets where Web 2.0, SaaS, and LAMP stack delivery models are coalescing.

Tech PR Veteran on Branding

Ed Niehaus and I sat down recently as part of my ongoing primary research exploring the current state of B2B tech branding.  Ed is an industry veteran who headed one of the top technology PR firms from the early 90s through the Internet boom - Niehaus Ryan Wong.  NRW launched Yahoo, Verisign, Apple's iMac, Veritas, and 3 Pixar movies.  The agency was one of the unfortunate casualties of the dot-bust, but luckily its founder lives on as a VC at Cypress Ventures. 

It's no secret that public relations is often the first program in the marketing mix that technology startups choose to outsource.  PR can be among the earliest third parties to influence how a new company positions itself in the marketplace.  PR becomes the first line of marcom offense in getting a vendor noticed and talked about.  Some may argue that PR firms and practitioners enjoy an undue share of influence over how and which new technologies and personalities move our industry.

My former employer The Horn Group was in friendly competition with NRW, so I've had nothing but respect for Ed.  He is one of the best at his craft.  He recognized early on that the firm's strong reputation engendered a unique opportunity to offer new clients a value-added service on Branding, hence trumping the leading advertising/interactive agencies at the time.  Ed believes brand is definitely a CEO-level discussion, one of the most strategic decisions, and so he wanted PR to have a seat at the table.  Now Ed is no fan of advertising - not even the inexpensive kind - and it's fair criticism to say NRW's service neglected the aesthetic design element in branding (it had no visual deliverables).  Still, Ed was out in front in recognizing the powerful role of PR in building tech brands.

Reflecting both enterprise and consumer tech experience, Ed recommends talking about brand with management of B2B companies in terms of the the vendor's reputation.  This approach would help the discipline mature and hold it to the same litmus test as all marketing spend these days.  Namely, does the activity drive either awareness or sales?  Buzz or share? 

According to Ed, brand comprises not just the positioning of the venture (i.e. product solving target customer pain better than competition), but its values and vision as well.  Brand is not the identity package itself, but elements reflect the entire "affective domain" of the company - its deeper sensory appeal to the buyer.  This is also impacted by buzz in the market, which is created by (surprise!) PR.

Finally, Ed had a parting piece of advice for most startups: stop expending 90% of your communications effort solving internal struggles, and only 10% talking to the outside world!  Could the solution he's implying be "hire a good PR firm", I wonder?

Entrepreneur article on Rebranding

This month's Entrepreneur Magazine has an excellent column on Rebranding by John Williams. 

John's major points are:

1. Don't confuse rebranding - which is a comprehensive, frequently expensive change of strategic direction for a company - with the simple need to update your look.  A simple refresh of design elements or slight naming alteration, which may be all that is required, is not the definition of rebranding. 

2. Rebranding should only be undertaken based on a proven need to alter course (e.g. new market, new trend, new product direction).  Given changing market conditions, it may even be crucial.  Rebranding should be based on sound strategy supported by facts related to sales and profits, not driven by organizational fatigue.  Ideally, everything should be changed at once.  For B2B companies, this starts with all sales tools and the website.

3. Be prepared to lose some customers.  The more dramatic the change of strategic course, the more customers will probably become alienated and abandon your product or service.  No worries, as long as you embody and deliver on your new brand promise to the new target audience(s).  Branding is about using mindshare to win marketshare.

John is an eloquent torchbearer for my mantra that Brand = solid differentiation.  In his words, "you simply can't be all things to all people".   He believes as I do that Brand Happens.  "Branding isn't an option today -- (it's) either by default or design." 

He offers one final piece of advice of particular interest to tech vendors: changing the name of the business to the name of the product is rarely advisable.  It is usually self-limiting and stymies the organization's ability to pace marketplace evolution.

Branding for M&A vs. IPO

I recently interviewed Christine Hinton from VantagePoint Venture Partners as part of my ongoing primary research study on the state of B2B tech branding.  Christine is VP Marketing at the firm, which is a leading multi-stage investor in the tech and healthcare markets.  In her position, she actively advises the boards of VPVP's portfolio companies on marketing strategy, and previously headed the West Coast tech practice of leading PR firm The Weber Group (now Weber Shandwick).

Christine is a seasoned pro with some interesting things to say about branding for startups.  She thinks that engineers, the folks who typically run early tech companies, often have the wrong idea about brand.  First, they think that it's something that's wholly created by the company itself (i.e. not by the market/customers in response to the company's offering).  Second, they think that a good brand is defined simply as the vendor with the best "buzz".  Basically her advice to CEOs is "you can't buy it, you need to deliver it."

We had a lengthy discussion about the decision to brand on the company or the product.  Christine contends that in early stage companies there is no such decision to be made, that essentially the vendor and its offering are one in the same.  As a VC firm, VantagePoint's advice differs depending on whether the company is headed for ultimate liquidity via acquisition vs. IPO.  In today's market - where the consolidation is the rule of the day and less than 10 tech IPOs occurred in all of 2005 - the choice is clear.  Startups on an M&A track should brand on the uniques of the product/technology and the strength of the engineering team.  On the IPO track, branding the company, which is essentially the "product" sold to Wall Street, becomes paramount.  For better or worse in today's climate, where most companies can only hope for acquisition, Christine thinks some CEOs think, "why bother with branding?"

Given these distinctions, a discussion of the concept of Brand Equity is enlightening.  According to Wikipedia, Brand Equity is a measure of the total value of the brand to the brand owner, and reflects the success of its branding with target audiences in the marketplace. Measurement can be both quantitative (i.e. comparative pricing) and qualitative (i.e. brand loyalty). Successfully branded products or services typically command higher prices, and strongly branded companies can command higher market valuations - whatever the liquid event.  So re: the issues discussed with Christine, it's a wash.  Strong brands demand and command a premium with target audiences.

Mike's definition of Brand

Since I began this blog by comparing talking about brand to discussions of the Great Almighty, it's only fair that I impart to you, in the interest of full disclosure from the start, my own personal religion. 

I decided to begin my mission evangelizing branding over 2 years ago, while attending Sandhill Group's Software 2004 conference.  The tone of the conference that March, with the enterprise IT industry still emerging from the downturn of 2001-03, was sullen and introspective.  Why were our sales still so flat?  Why did our industry suck at marketing? Why did our customers hate us?  I added to these laments one of my own: Why does my industry not respect branding?

In the course of my ongoing primary research on the state of branding in the B2B tech world, I've discussed the Brand Diety with many fellow IT marketing professionals.  I've heard brand gurus from the B2C world evangelize their unique dogma, and seen way too many powerpoints about the future of our religion as a whole.  Some descriptions include: "Brand is a personality."  "Brand is a promise."  "Brand is your DNA."  So what's the definition that fits our industry best? 

Brand is What Your Customers Say About You.

Simply put, your brand is the grade you receive from customers, prospects, investors and the marketplace at large on your ability to fulfill the need you promised to address.  Did you make the pain you targeted indeed go away?  Do you always deliver as advertised?  Is your reputation one to be trusted? 

A vendor cannot buy its brand.  It's not a website or an ad campaign or a press release.  It's created over time by a company's consistent behavior in the marketplace, by how the company sets expectations and then exceeds or disappoints.  The vendor asserts its competitive positioning, executes against this in the market, and then is rewarded or punished by the brand it receives in reply.  Customers define your brand, with or without your help.  In this way, brand is about perception...and reality. 

Brand Happens.  So B2B technology vendors better start joining the conversation.

Talking about Brand is like talking about God

It has been said that talking about brand is like talking about God.  Everyone has their own definition and beliefs.  Still, I've taken on a new professional mission - to evangelize the power of brand to transform the way my industry sells enterprise technology and satisfies customers.

To understand the current perception of branding and its value for the B2B IT industry, I have undertaken an ongoing qualitative research study, interviewing some of the leading technology marketing minds on their branding dogma.  In this blog, we'll examine and discuss findings from this project.

Buyer2Brand will strive never to be preachy in its tone, but instead present the beliefs and opinions of minds greater than my own, relate insights on the news with links to point of origin, and analyze emerging trends and best practices as asserted by sources we trust in common.

If you are a senior-level technology marketer, and would like to be interviewed, please drop me a line.