The reputation of a company and its brands are primary determinants of its margins.
Reputation is how your company is viewed in the marketplace—what it is known for, how its culture is viewed, and, most importantly, what the market believes about the value of its offerings.
These are all external perceptions, but in both B2C and B2B, they add up to a sort of capital that accrues as customers willingly pay a premium price for a company’s offerings.
Only then will margins expand predictably over a sustained period of time.
What differs in B2C and B2B companies is how corporate and brand reputation is created.
In the B2C world, reputation is defined by elements such as advertising, package design, and the experience of using the product. B2C companies invest millions to understand the demographic and geographical nuances of customers in order to position and manage their corporate and brand reputations in the mass markets of the consumer sector. Retailers, such as Starbucks and Target, add the look of the store and the behavior of employees to the mix.
In the B2B world, corporate and brand reputation is composed of the same elements, but in very different configurations. The priority and weighting of the elements are altered by the three realities discussed above. As we’ve seen, the people you are selling to within your customer companies are usually industry veterans with high levels of domain expertise. Simply put, they’re living what you’re selling.
These customers aren’t going to pay a premium for your offerings because you’ve got a cool logo, a catchy tagline, or a slick PowerPoint presentation.
What do they respond to? Business value.
And how do they determine that value exists in an offering? In addition to their own knowledge, they rely on their peers. For example, surveys of CIOs consistently find they rate peer input as the most credible and trusted source of information about products and services.
Thus, the path to a premium reputation in the B2B realm is through your current customers.
It is how they perceive and describe your offerings and what they think and say about working with your company and your ability to deliver what you promise that ultimately determines your company’s reputation. And the higher these customers are on the corporate ladder, the greater the impact of their opinions and recommendations.
AMG will work with you to help you successfully attain sustainable, predictable, profitable growth by anchoring your reputations as high as possible within their customers’ organizations.
Through AMG’s Reference Programs, tap the good will of the person who makes the decision to buy. This is far more important to B2B companies that are trying to maximize their margins.
Source: Geehan, Sean. The B2B Executive Playbook: The Ultimate Weapon for Achieving Sustainable, Predictable and Profitable Growth. Clerisy Press.