BtoB

Brand preference monitoring debated

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Given the innumerable metrics a company can track, one of the most important roles for marketing executives is prioritizing the few that have the biggest impact on business decisions. But in the nuts-and-bolts b-to-b sector, the value of consumer marketing's most central metric, brand preference, stirs debate.

Brand preference is a measure of whether someone prefers one brand over another. It is distinct from brand awareness, which tracks how many people know a brand, or brand reputation, which tracks positive and negative associations. Brand preference research aims to uncover both the rational and emotional factors that lead to a purchase decision over a competitor.

"It's a behavioral measure that gets closer to market performance," said Jeff Cox, CEO of the ARS Group, a marketing measurement and research company that specializes in scientific brand preference measures through its Brand Preference Monitor methodology and service.

A major goal of brand preference, as opposed to marketing campaign metrics, is to understand how customers feel about a brand over time. Brand preference monitoring focuses less on product or service features, which change regularly, and more on lasting company attributes such as quality, reliability and trust.

Some very large b-to-b companies-including Cisco Systems, Hewlett-Packard Co., IBM Corp., Intel and Motorola-have famously built their market dominance on brand preference. But unlike the importance of tracking core sales metrics, which no one debates, the value of investing in brand preference monitoring is a subject for discussion.

Brand preference in b-to-b

"What is the importance of brand preference in a b-to-b context? Regardless of what business you're in, you want your brand to be preferred. Every company has a product they're promoting, whether they're a detergent company or a law firm," Cox said.

Laura Pasquale, director of brand marketing at LogMeIn Inc., a remote-access software company, agreed. "We measure everything, and brand preference is a component of almost every survey or customer interaction we have," she said.

LogMeIn uses brand research to drive new-business and product decisions, and validate past ones. The company uses services from market research firm Greenfield Consulting Group and monitors blogs, forums and industry sites for qualitative measures of brand preference.

It also conducts in-house surveys using an online tool from SurveyMonkey.com, asking questions such as "Does it matter that this product comes from LogMeIn?" (82% of the respondents on a recent survey said "yes," Pasquale said).

In addition, the company uses a further level of "why" questions to find information that it can act on. For example, its customers, who tend to be from technology and engineering backgrounds, say they prefer LogMeIn to competitors because they can complete the entire buying cycle without talking to a live salesperson. This finding bolsters LogMeIn's e-commerce strategy, which complements its direct sales approach.

Making sense of all these data isn't easy. One of the first hires in the marketing department of the 120-person company was a full-time data analyst to interpret the statistics and feedback. Pasquale said the effort has been worthwhile.

"Brand is both art and science, but brand preference is dollars," she said.

Skeptics of preference

But other b-to-b marketing executives are more ambivalent, questioning the importance of brand preference in customers' purchase decisions. This is especially true in the professional services and legal sectors where individuals are selling their personal services within the context of a larger organization.

At Morrison Foerster, a law firm with more than 1,000 lawyers in 19 offices around the world, brand matters. However, brand preference isn't the determining factor for most clients when purchasing legal services, said Amanda Duckworth, chief marketing officer at Morrison Foerster.

"A firm's brand says something about its teamwork, its global resources and other key attributes," Duckworth said. "For instance, it helps that the firm may have a brand reputation for intellectual property law. But in the final analysis, what companies buy when they buy legal services is the provider of legal services, and that is not the firm but the individual attorneys."

'Awareness' instead?

When a company is in an emerging market, other factors, such as simple brand awareness, can be more important than preference.

Unica Corp. is a provider of enterprise marketing management (EMM) software. EMM is an emerging software category that melds marketing and customer analytics, demand generation and marketing resource management. Unica was recognized by Forbes' Midas List in 2006 as one of its 25 Fastest-Growing Technology Companies. But at this point, the company is focused more on marketplace awareness than preference.

To track awareness, Unica conducts annual blind surveys through outside market research firms including AMR Research, Forrester Research and Ovum. Chief Marketing Officer Carol Meyers tells of surveys in which respondents suggest that IBM and Microsoft are EMM market leaders, even though the companies don't have offerings in the category.

"It's not that respondents don't know just us, they don't know any of the companies in the category at all, so tracking preference is moot," Meyers said. "They say `IBM' because it's a brand they know. So we're primarily looking at whether we're moving up the awareness ladder."

The choice to monitor brand preference is a strategic one that can help a company form long-term strategies and check assumptions in a competitive marketplace. But setting aside the budget and time needed to track what some view as a "warm and fuzzy" metric depends on the value of the company's brand and the role it plays in supporting purchase decisions immediately and over time.

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