Brand Benefits the Company, Not the Customer…

I was on a road business trip yesterday and was passing by a town where a celebrity television couple had renovated a building and opened a bakery inside of it. My wife, having seen the business advertised on TV, asked me to stop in and check it out. I swung off the road and found the building. There were about 50 people waiting in line, in 100-degree weather, to get into the bakery, with another 30 or so snaking their way through the line inside. Based upon nothing but the popularity of the place and the throng of happy and excited people waiting to satisfy their sweet tooth, I succumbed to the moment, waited for 20 minutes in the heat, and stocked up with four cinnamon rolls and six cupcakes (no, I didn’t eat them right then and there, I brought them home to my family). We had the cupcakes for desert last night, and the cinnamon rolls for breakfast this morning.

I paid $44 for what amounted to maybe $5 in flour, sugar, butter, and few other items, plus a little bit of labor. We were expecting these to be the pièce de résistance of pastries, but in truth, after the first bite, we found the product to be underwhelming and commonplace – we would have gotten more enjoyment from spending $1.89 on a package of Pillsbury Cinnamon Rolls and spending a few minutes making them together in the kitchen and letting the aroma fill the house.

In the sales world, we call this buyer’s remorse. What prompted this relatively expensive misadventure? Nothing more than the popularity of brand created by this celebrity couple. Don’t get me wrong, the pastries were okay, but in this humble foodie’s opinion not worth diverging off course for. The other hundreds of people who visited the bakery that day may have had different opinions, and may indeed have thought the products were nirvanic, but I have to wonder if they weren’t simply justifying their having just payed more than top dollar for flour, eggs, and sugar.

The same exact thing happens, writ large, in B2B sales. Based purely upon the vendor’s brand reputation, companies will flock to the most popular product on the market. If there are so many satisfied customers waiting in line to buy the product, it must be superior in quality and effectiveness. Right? Right…?

The power of brand is difficult to overstate. Companies will quite literally spend billions of dollars in M&A to acquire a brand, knowing that people may be generally more attracted to a given brand than the product itself. We all have friends who swear by a given brand of automobile, regardless how good the product is when compared to others, or even if their total cost of ownership is more than others because their vehicle is in the shop more than their friends with another brand; they’ll turn their “lemon” in for another vehicle from the same manufacturer.

Let’s take CRMs as an example of B2B purchasing. According to SelectHub[i], nearly 44% of those surveyed contacted zero – ZERO – vendors before selecting which CRM they’d go with, relying upon their own ability to research things online and listening to their peers. Who do you suppose the number one vendor was? I’ll give you three guesses, and the first two don’t count: Salesforce. About 65% of all respondents considered Salesforce at least 3x more frequently than dozens of other CRM vendors, and Salesforce continues to hold the largest market share where CRMs are concerned.

Yet, CRM adoption continues to be an issue within many (most?) companies. As reported by Nomalys[ii], and according to research firms such as CSO Insights, Forrester, and others, less than 40% of CRM customers have end-user adoption rates above 90%, and some 49% of CRM projects fail. And still people continue to flock toward one vendor, Salesforce, based at least partially upon simply the brand’s popularity.

All of this is to say that building and protecting one’s brand is critical to financial success. Note how I phrased that: financial success. I didn’t say it resulted in success for the customer. Brands benefit the company, not the customer. Over time, the goods and services must deliver on their promises if there are to be any long-term relationships with customers. Don’t rest on your laurels and allow brand alone to drive business or you may find yourself losing your install base as fast as you gain new clients, which over time will erode your brand. So, just as with the so-so pastries from the uber-popular bakery, you may ride the wave of having a well-recognized brand, but competition and their superior products which meet and exceed the expectations of customers will eventually dilute your brand’s value and cause that wave, and your business, to crash.


[i] https://selecthub.com/customer-relationship-management/crm-software-buying-trends/

[ii] https://www.nomalys.com/en/28-surprising-crm-statistics-about-adoption-features-benefits-and-mobility/

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