Branding has always been associated with creating awareness among its target group or differentiating products and services from its competitors. While, business-to-consumer (B2C) SMEs’ key focus is to advertise on social media, there is a misconception among business-to-business (B2B) SMEs that that branding is not important as it all depends on personal relationship and competitive pricing. Such strategy will put a company in high risk. If a salesperson moves to a competitor’s company, the relationship that he developed likely goes with him/her too. As for pricing, it goes without saying that brand loyalty will be near to zero when any business over emphasises on pricing.
In this short article, we will discuss how operational excellence can be a more powerful and sustainable branding strategy for B2B SMEs.
Professional buyers in the B2B segment are more rational and fact based buyers. Some of their key considerations are brand reputation, certification of process and quality, consistent availability of supplies, efficient customer service (pre and after sales) and of course competitive pricing or pricing model. All buying decision will need to be justified no matter how much they like or do not like a supplier or brand.
Demonstrating operational excellence is part of branding strategy. SMEs always claim that they are the best with minimum justification, thus it makes it hard for professional buyers in making decision to choose your brand. SMEs need to tangibilise its claims. Production process and financial performance are two most often neglected areas.
Ability to develop a quality product today does not mean that you can produce the same quality product tomorrow. It can only be done if certain systems are in place. SMEs can no longer sell by saying “You see, we have good products. We have years of experience doing it”. Instead it should be “We have systematic process of doing it”. Professional buyers need to have assurance that there is consistency in everything SMEs do.
Many may ask what has finance got to do with branding? Again, it is all about reputation and confidence. SMEs with sound financial performance will give professional buyers confidence that you will be able to provide continuous supply, upgrade and innovate.
An SME may be able to produce quality product and market it creatively with great brand communication campaigns, but buyers (B2B) may not want to purchase should they have access to details of your financial health. It is now part of procurement processes of many companies to check suppliers’ financial status from CTOS before approving it as a panel supplier. Making sure your company has good credit rating is part of branding.
COMMUNICATING AND MARKETING OPERATIONAL EXCELLENCE
Let’s assume SMEs have done a great job on the above. How can SMEs effectively demonstrate or showcase it to the market? Below are some recommendations :
By Keng Teck Yap, Managing Consultant of Bizsphere Brand and Marketing Group.
Written for Business Today Magazine, Issue November 2019.