Few terms generate more resistance in an industrial executive committee than that of brand. The suspicion that it is a cosmetic concern proper to mass consumer markets is widespread and, in part, justified. Much of what has been sold as industrial branding is make-up without measurable return. Recent data force the cosmetic debate to be separated from the financial one.
McKinsey published in 2023 a study titled The rising value of industrial brands with a finding hard to ignore. The 5 per cent of best-positioned industrial brands concentrate 95 per cent of share of voice in their categories. More relevant: industrial companies that improve their brand position over five years gain, on average, 3 points of ROIC over those that lose it. The difference is not marginal. It is structural.
A second figure from the same team reinforces the first. 87 per cent of B2B leaders place brand awareness as the number-one objective of their marketing function. Companies that personalise their brand communication are 1.5 times more likely to gain share against peers. What has been measured for decades in mass consumer markets is beginning to be documented with the same solidity in industrial B2B.
The frequent error of the industrial committee is to confuse brand with advertising. For an industrial company, brand does not mean campaigns. It means three concrete things: the coherence with which the organisation conveys one or two differentiating attributes, the frequency with which those attributes appear in the places where the customer forms criteria, and the speed with which the market spontaneously recalls the company when it thinks of its category.
That last variable, spontaneous recall, is the one that translates most clearly into share. The work of the Ehrenberg-Bass Institute, replicated by the LinkedIn B2B Institute, has documented that mental availability explains more variation in B2B market share than any other conventional marketing factor. The brand operates, in practical terms, as a mental pre-selection of the supplier before any formal process.
For general management, the three points of ROIC have a concrete operational translation. A mid-sized industrial company, with revenues of fifty million euros and a base ROIC of 8 per cent, captures between four and five million additional euros of return per year by moving from the invisible zone to the visible zone of its category. That figure rarely appears in the budgetary debate on brand, partly because it is not measured and, above all, because the cost of inaction is invisible while it is suffered.
Industrial companies that do capture that return distinguish themselves by discipline, not by budget. They choose few differentiating attributes, repeat them with constancy at every technical and commercial point of contact, and measure recall over time in their target accounts. The investment is modest. The constancy is not.
The opposite error, frequent in companies that do adopt this framework, consists of trying to measure brand outcomes with direct-demand metrics. Brand and demand activation operate on different timescales. The brand changes the cost of commercial capital. Activation changes the quarterly pipeline. Confusing their metrics destroys both efforts.
The conclusion for an industrial CEO is practical. The brand is neither the last chapter of the strategic plan nor the first of the marketing plan. It is a financial asset with a measurable return that, in most mid-sized companies in the sector, is being underexploited by default, not by technical impossibility.