Do you agree that Brands are rapidly losing value in our information society? In the February 17 issues of The New Yorker, Financial Page contributor James Surowiecki’ writes, in his article, “Twilight of the Brands,” about the theories of Itamar Simonson. In his book, “Absolute Value,” Simonson postulates that brands used to serve the purpose of helping us to choose a product or service when we had no information. Now, the Internet and social media have given us a wealth of information to aide our every purchase decision.
According to Surowiecki and Simonson, “If you’re making a better product, you can still charge more, but if your product is much like that of your competitors, your price needs to be similar too. That’s the clearest indication that the economic value of brands– traditionally assessed by the premium a company could charge–is waning.” They conclude by stating that a company is now only as good as their last product and brands have never been more fragile.
Hold on now… I would argue that Brands still retain their original function — at least for certain types of companies. The B2B service companies I’ve worked for, many of whom go to market through independent sales organizations, resellers, dealers and other channel partners, need a strong reputation/brand in order to gain any recognition and rise above the competition. In a commodity business, the brand may be the only thing that allows a company to charge more than the lowest price.
There are, of course, many ways to build a B2B brand — and content marketing that demonstrates thought leadership is one of the most effective (see my previous blogs). But not supporting your brand is like asking for a level playing field. Wouldn’t you rather have the advantage of a reputation for being a trusted advisor? Wouldn’t you rather charge a premium for that expertise? I believe that smart B2B companies understand that brands still serve as proxies for quality. Do you agree?