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B2C outpaces B2B in value growth, but gap narrowing

One of the most striking differences between business-to-business (B2B) and business-to-consumer (B2C) brands is their average age. Business brands are 83 years old, on average, compared with 44 for consumer brands.

 

Legacy B2B brands like IBM, established in 1911 in New York, have grown substantially in value over the past 12 years, according to BrandZ™ research. But they have lagged the pace set by younger B2C brands like Apple, which was started in 1976 in California. However, as industries evolve and collaboration increases, the pace of brand value change may become more even.

 

During the past 12 years, the BrandZ™ B2B Top 20 increased a healthy 90 percent in value, but the   BrandZ™ B2C Top 20 increased 233 percent. In contrast, both the B2B and B2C appreciated in value at virtually the same pace last year, 11 percent and 10 percent.

 

On the BrandZ™ Vital Signs Index, the gap between B2B and B2C remains wide, however. The Vital Signs Index assesses brand health across five diagnostic indicators—Brand Purpose, Innovation, Communications, Brand Experience, and Love. The average Vital Signs score, a composite of the individual scores, is 100. B2B brands score 107. B2C brands score 118.

 

The widest gaps are in Communications and Love. B2B brands score 105 in both indicators. B2C brands score 120 in Communications and 119 in Love. The disparity reflects the return on the investment that B2C brands receive from brand building. It also suggests the kinds of improvements that a B2B brand could expect to achieve by adopting B2C brand-building practices.

 

Significantly, the Vital Signs gap is narrowest in Brand Purpose, where B2B brands achieve their highest score: 110, compared with 116 for B2C brands. This score is significant because Brand Purpose usually is the foundation on which Communications and the other indicators are built.

 

High Vital Signs scores have important practical consequences, because strength in these five aspects of brand health produces Meaningful Difference. And a brand that is perceived as meaningful (meeting needs in relevant ways) and different (distinctive and trend setting) is better able to gain market share and command a premium price.