McKinsey partner Tjark Freundt nails it when he says: "The companies that will win in the next decade are those that build strong brands on top of operational excellence, not instead of it."

The belief that operational excellence and geographical moats remove any need for long-term marketing and brand building is one of the most dangerous delusions in B2B today. Below, I'll highlight examples from some of the least glamorous industries to prove it.

Trust = Pricing Power

The most compelling evidence for B2B brand building is its positive impact on pricing. The B2B Institute found that top B2B brands command up to 20% price premiums over weaker competitors, even with identical product specs and metrics.

Take SKF, the Swedish bearing manufacturer. Despite lower-priced competitors, SKF maintains margins 40% above the industry average. Their secret? Decades of brand investment, positioning them as the "engineers' choice". As one SKF customer said, "We're buying peace of mind, not just bearings." This value perception stems entirely from brand positioning and awareness.

Deloitte's 2023 B2B Pricing Study corroborates this view, revealing that strong brands experience 70% less price sensitivity and pass on cost increases far more effectively than weaker competitors.

In my own experience, the toughest incumbents to displace are those who consistently invest in strategic marketing and brand building.

The myth of the Geographical Moat

Nicola Leibinger-Kammüller, CEO of German machine tool maker Trumpf, warns:
"Today's local competitor is tomorrow's global threat. Brand building is our insurance policy."

Even with exclusive European distribution, Trumpf has invested 15% of its revenue in marketing since 2020. This foresight is critical. According to Boston Consulting Group, regional monopolies are rapidly eroding, with cross-border B2B transactions surging 47% between 2019 and 2023, even in traditionally local sectors.

Many companies I’ve worked with have faced painful disruptions—lost distributorships, shrinking margins, and customers sourcing products from outside their territories.

Grainger, the industrial supply giant are another great example of B2B brand building. Why? They serve 4.5 million customers across North America, Japan, and the UK, with a catalogue of 2 million products. In 2023, they reported $16.5 billion in sales—proof they know how to sell, grow, and turn a profit in B2B.

Despite their industry and century-long relationships, Grainger has invested heavily in branding since 2018. CMO Deidra Merriwether says: "Digital has changed everything. Customers may be loyal to their distributor, but they're researching alternatives online every day."

Operational Excellence is not enough

Harvard Business Review's study of 474 B2B companies showed that operational excellence alone explains only 38% of performance variance between market leaders and followers. The rest? Brand strength and marketing effectiveness.

Rockwell Automation examplifies this truth. Despite decades of dominance through superior operations and distributor exclusivity, they launched their first major brand campaign in 2019, "Expanding Human Possibility." Their CMO, Tina Dear, was explicit: "Operational excellence is table stakes. Real differentiation comes from being the first brand buyers think of when it's time to modernise."

The data doesn't lie

A LinkedIn B2B Institute study, conducted with marketing experts Les Binet and Peter Field, analyzed 1,000 B2B campaigns and found striking results:

• 2.7x higher market share growth

• 3x higher pricing power

• Up to 82% higher profit margins

Even in industries with high operational barriers to entry, companies that maintain brand investment achieve far superior outcomes.

What does B2B Brand Building look like?

Brand building in B2B differs from the consumer world but remains equally critical. It focuses on establishing trust, credibility, and value perception among a smaller, more niche audience. Effective B2B brand building transcends operational features, securing long-term loyalty and pricing power, often including:

• Thought Leadership: Publishing insightful content, case studies, and research that position your company as an authority.

• Consistent Messaging: Ensuring your brand’s values and expertise are consistently communicated across touchpoints, from sales presentations to digital channels.

• Customer Experience: Enhancing brand equity through exceptional service and personalised support, creating advocates within your customer base.

• Emotional Resonance: While B2B buyers are rational, they’re not immune to emotional influence. A strong brand instills confidence and reduces perceived risk in high-stakes purchasing decisions.

The path forward

1. Audit your competitive moat: How much of your advantage comes from operations versus brand strength?

2. Map your customer's digital journey: Where are they researching alternatives?

3. Calculate your brand investment ratio: Are you achieving the ideal 60/40 split between brand building and sales activation? If not, it may be a stretch to hit immediately, but set a roadmap to align gradually.

4. Measure long-term metrics: Track brand awareness, consideration, and pricing power alongside operational KPIs.

Final Takeaway: Building a brand is essential for B2B

Operational excellence and strong distribution networks are vital, but they’re no longer enough in today’s digital-first B2B landscape. The companies that win are those that invest in building strong, enduring brands on top of operational excellence—brands that foster trust, command pricing power, and withstand competitive pressure.

About the Author

Jonathan Drainey is a senior brand strategist and marketing director based in Northern Ireland, UK. A Fellow of the Chartered Institute of Marketing, he partners with select clients in Ireland and the UK to transform their IP into market-leading products and global challenger brands. With a proven track record, he drives transformation and growth through innovation, design, operations, and strategic marketing. A strong advocate for product-centricity and the circular economy, he specialises in the agri-food, health, energy, tech, and industrial sectors.

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