Purpose and sustainability: a visible opportunity for hidden companies
Many of the world’s largest companies would likely not appear in a public straw poll of well-known brands. The most widely known businesses in the world are in the public eye because they must be. They sell to the mass market often through a high-volume, low-cost approach and their success is based on an ability to sound, look and make consumers feel better than their competitors do.
Most B2B companies – those who serve other businesses, often with fewer, higher-paying clients – have historically not needed to operate in the same way. But things are changing. For these ‘hidden’ B2Bs, operating at the margins of mass awareness, the biggest business opportunity in the short-to-medium term lies in rethinking how loud they want to be, and in telling their story far more publicly and boldly than ever before.
The growing ESG agenda
The rise of environmental, social and governance – or ESG – expectations among investors and buyers is forcing B2B companies to look at their supply chains and production in ways they previously were not expected to. Ensuring that your company’s impact on the world is measurably less bad is now critical to secure inflows of investments from asset managers or pension funds, or to be considered by buyers when responding to RFPs or tenders.
Companies that want to outperform their competitive set in this regard now must have a sharp articulation of their contribution to the world. More than this, as increasing numbers of B2B companies wake up to this fact, the need to tell your story in a meaningful, genuine, and distinct way is critical. In the absence of differentiation, it will always be the company with the biggest sales and marketing budget that wins.
In B2B sectors where marketing has been less of a priority, a clear and compelling purpose will circumvent this challenge. But you must match what you are saying with what you are doing, or risk investors and customers losing faith in you.
One voice with multiple advantages
The nature of B2B has generally led to companies that look and sound similar operating in the same territory. Customer liquidity – the movement of buyers from one company to another – has typically been low. It is far more time-consuming to renegotiate a multi-million- or multi-billion-pound contract as a B2B buyer than it is to switch toothpaste brands as a consumer.
But the hyper awareness that has fallen out of the growth of the ESG agenda is changing this. A company’s ability to meaningfully respond to these questions will be what sets it apart, and with it will bring multiple business benefits.
Companies with a clear purpose will be at the front of the queue when RFPs are issued. The marketing cut-through achieved in sectors often lacking any real differentiation will boost visibility. A clear demonstration of doing good will put you ahead of impending regulatory responses to COVID and the environmental agenda, and ahead of the investor agenda. And as younger generations take a stand for their beliefs, a clear purpose will help you to attract and retain the best talent.
Hyper visibility in a COVID world
The need for B2Bs to catch up with more traditional consumer brands and be bolder in their purpose articulation has been accelerated by the events of 2020. The impact of the pandemic has rocked stakeholders and consumers right across the value chain. Consumers and customers now demand accountability from an ethical perspective. Regulators are already thinking about how to force companies’ hands in reducing their impact on the planet. Buyers are thinking about reputations when choosing their suppliers.
Examples of this are all around. As e-commerce boomed while we all worked from home, packaging companies experienced some of the biggest growth they’ve ever seen. But with this growth and added visibility comes a need to scrutinise the materials used in their products.
As the electric car industry steals an increasing share of the market from traditional automobiles – catalysed further by the widely understood link between environmental degradation and the emergence of COVID – the manufacturers of electric car batteries and their components are fielding greater order volumes than ever before.
And while agri- and bio-tech companies previously will have operated in a highly technical and relationships-based world, they now sit at the forefront of efforts to prevent future environmental and health crises from occurring.
These hidden companies have been thrust into the spotlight, and now is their opportunity to stand out from the crowd.