Value Rose Fastest for B2B Brands Viewed as Having Strong Potential

Potential depends on purpose, responsibility, love and innovation

When inevitable and often unpredictable market fluctuations disrupt corporate performance, as in the 2016 BrandZ™ Top 100 Most Valuable Global Brands, strong brands add stability, and they help accelerate growth during better times.

Strong brands share three characteristics. They are: (1) Meaningful in ways that meet both functional and emotional customer needs; (2) Different in being perceived as trendsetters and unique from the competition; and (3) Salient in coming to mind quickly and easily at the moment of purchase.

BrandZ™ uses three key metrics to describe and measure the ways in which meaning, difference and salience impact brand equity. These three metrics were based on almost two decades of study of the world’s strongest brands, and have been validated to in-market performance. Brand Power describes a brand’s ability to generate volume demand. Brand Premium describes a brand’s ability to command a premium price. Brand Potential describes a brand’s ability to grow market share in the future.

These metrics are as relevant for B2B brands as they are for B2C brands. Achieving Brand Potential, for example, requires performing well on several interrelated aspects of brand building, including:

PURPOSE

Purpose can be about a lofty objective such as making the world a better place in some way. But brand purpose is always about clarity in terms of what the brand stands for: its proposition or reason for being, the ways in which its very existence is important for the customer because of the useful, or even unique, benefits it provides.

RESPONSIBILITY

Responsibility has to do with the brand’s behavior as a corporate citizen: its impact on the environment, its engagement with communities it serves, and its attitudes and behavior toward its employees. Responsibility is one of the factors that influence trust.

LOVE

There are many large and enduring brands that operate in categories being disrupted by changing consumer expectations. As brands respond to those concerns, transformation takes time. Brands that are loved benefit from greater customer patience.

INNOVATION

Perceived Innovation is about leadership, bringing something into the market that is new and not just iterative: new products, services, communications, or packaging – any introductions that are different and shake things up for the benefit of the customer.

BRAND POTENTIAL DRIVES VALUE

Dividing the B2B Top 20 into two groups – brands that scored high on Brand Potential in 2006 and brands that scored low on Brand Potential in 2006 – and comparing the performance of the two groups over the past 11 years reveals that brands with high Brand Potential increased 123 percent in value, while the brands with low Brand Potential increased only 23 percent in value. High scores in purpose, responsibility, love, and innovation also correlated with higher rates of brand value growth.

Research into the drivers of Brand Potential can provide an advantage for brand owners and marketers enabling them to engage consumers in meaningful ways that maintain differentiation.


B2B brands with high Brand Potential grew much more in value

Of the 14 brands that appeared in both the 2006 and 2016 B2B Top 20, about half scored high in Brand Potential, increasing in value 123 percent. These brands far outperformed the brands that scored low in Brand Potential, which grew only 23 percent in brand value.

B2B brands with high Brand Potential grew much more in value

BRAND IMPLICATIONS:

Being meaningfully different today creates success tomorrow – Brand Potential. Brands that score high in Brand Potential grow faster in value. It is important to cultivate the drivers of high Brand Potential, which include: purpose, responsibility, love, and innovation.


Brands scoring high in purpose grew faster in value…

Brands that scored high in Purpose grew more in value than brands that scored lower. And the difference in growth rates is substantial, as becomes clear when the various aspects of Purpose are unbundled. Brands that scored high in “Makes Lives Better” grew 81 percent in brand value between 2006 and 2016, while brands that scored lower in that component grew only 24 percent.

Brands scoring high in purpose grew
faster in value

BRAND IMPLICATIONS:

Brands that think of their consumers, rather than only themselves, and genuinely attempt to improve consumers’ lives will succeed to a much greater degree.


… Responsibility, trust drive value…

More trusted brands grew 80 percent in brand value between 2006 and 2016, while less trusted brands grew only 25 percent.

Responsibility, trust drive value

BRAND IMPLICATIONS:

This finding is important for B2B brands, which are often in categories, such as technology or banks, where customer trust is an important issue. In technology, concern with privacy and data protection will become even more evident with the implementation of the Internet of Things and the greater involvement of technology in people’s lives. Trust is critical for banks, especially among millennials, as banks seek to expand their retail businesses. Some brands have a reservoir of trust built up over time. But to be sustained, trust needs to be renewed constantly. Similarly, companies that are seen to treat their employees well grew brand value at three times the rate of companies less known for treating their employees well.


… Love also drives value …

This finding dispels the notion that people may be emotionally engaged with B2C brands but not with B2B brands. The brands that scored high in love increased brand value 60 percent over the past 11 years, compared with the brands that scored low in love and increased value only 43 percent.

Love also drives value

BRAND IMPLICATIONS:

Love is an important discriminator between brands that are more successful or less successful. It is important for a brand not just to be loved but to be loved for a purpose – that is, for the contribution the brand makes to people’s lives.


… And innovation can have an enormous impact on value

The brand value impact of being perceived as different or creative is enormous. Brands seen as different or creative almost doubled in value between 2006 and 2016, while brands perceived as low on those characteristics improved in value only by around one-fifth over those 11 years.

And innovation can have an enormous
impact on value

BRAND IMPLICATIONS:

The drivers of value for B2C brands also hold for B2B brands, and they provide an excellent guide for driving future value growth.

B2B brands score well in Potential but lag B2C

Business-to-business brands score well above average in Brand Potential and in all the attributes that contribute to Brand Potential. They score somewhat lower than business-to-consumer brands, however. Consumer-facing brands may pay more attention to brand building, and in some instances the B2B brand strengths may not be as clearly understood and appreciated.

The BrandZ™ B2B Top 20 brands score 108 in Brand Potential overall, and the BrandZ™ B2C Top 20 brands score 118, using an index that sets the score for an average brand at 100. B2B brands outscore the B2C brands on only one driver of Brand Potential: “Treating Employees Well.” B2C brands outscore B2B brands on the other drivers. The B2C brands are strongest in Innovation, especially the attribute of being seen as Different, where they score 146, while B2B brands score 110. The B2C brands score 125 in Brand Love, compared with 106 for B2B brands.


B2B brands score well in all Brand Potential measures

The BrandZ™ B2B Top 20 brands score 108 in Brand Potential overall, well above average, although less than the BrandZ™ B2C Top 20, which score 118.

Top 20 B2B compared to Top 20 B2C

BRAND IMPLICATIONS:

The takeaway from the lower Different score for B2B brands is not that they lack Innovation, but that compared with B2C brands, they are less perceived as innovators. B2C brands receive credit for innovating; B2B brands not as much. Similarly, the contrast in Brand Love scores means that B2C brands are more loved, but it does not mean that B2B brands are unloved. There is room for B2B brands to more effectively communicate underappreciated strengths. These changes would help B2B brands grow in brand value and market share over time.

BrandZ Top 100 2016

BrandZ Global 2014 Report Top 100 Report

Top 100 List

Top 100 Infographic


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Methodology and valuation by Kantar Millward Brown

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