Jonathan McGrain
PRINCIPAL, CAMBER STRATEGY
In financial services, meaningful differentiation often begins where product differences end.
I once asked a senior sales executive I worked with how he described the quality of our service to prospective clients. He looked at me and smiled. “We’re no worse than anybody else,” he said. He wasn’t trying to be funny; he was being honest, in a way that speaks to the challenge of branding in a commoditized industry.
This frustration is common in B2B financial services and is typified by a leadership team that knows its business performs well, serves customers reliably, and prices competitively, yet struggles to explain why a prospect should choose them over a competitor that can make exactly the same claims.
The first reaction to this dilemma often focuses on marketing. The message needs sharpening, or the website needs work, or the sales team needs better tools. All of these may be true, but they treat the symptom rather than the cause. The cause, often, is that the company is trying to differentiate a product the market views as a commodity, without first establishing the brand foundation that makes differentiation possible.
I’ve encountered this problem across banking, mortgage banking, mortgage insurance, title and settlement, and other financial services sectors. In many of these categories, the product itself is standardized by design. Regulatory requirements, GSE guidelines, and industry conventions constrain what any competitor can offer. The result is a market where differences between providers are real but marginal, and where competing on product features alone feels like a race without a finish line.
The limits of product differentiation
Companies facing this challenge tend to reach for the same levers: improving service, streamlining process, rolling out more sophisticated technology. While these can be worthwhile investments, they don't necessarily produce lasting differentiation. Service levels are difficult to sustain as table stakes rise across an industry. Technology gets replicated. What looked like a competitive advantage in year one becomes an expectation by year three.
What’s less frequently examined is an assumption that sometimes underlies this approach: that branding is something consumer companies do.
Consumer brands have advertising budgets, emotive campaigns, and decades of practice connecting products to identity and aspiration. B2B financial services firms have RFPs, pricing models, and relationship managers. The markets feel categorically different, and in some ways they are.
But this assumption conflates two different things: brand as advertising and promotion, and brand as foundation. The first may be less relevant in B2B, but the second, how a company presents itself, earns trust, and builds preference over time, is just as important. Businesses that overlook this tend to underinvest in brand precisely when they most need it: at moments of launch, transition, or competitive pressure, when they need to give customers a reason to choose them that goes beyond price.
The emotional side of B2B decisions
The widely held assumption that B2B purchase decisions are purely rational turns out to be empirically wrong, in a way that has big implications for brand strategy.
Research conducted by Google and CEB (now Gartner) found that B2B buyers are actually more emotionally connected to their vendors than consumers are to their brands. This finding might seem counterintuitive until you think about the stakes. Many consumer purchases carry relatively little risk. A poor choice costs money and perhaps some inconvenience. Business purchases, on the other hand, carry a much different weight: career risk, organizational risk, reputational risk. The emotional pressure to make the right call is higher, not lower, than in consumer markets. And because of that pressure, the research found that business customers won’t buy without a substantial emotional connection to help overcome the risk.
A separate study by B2B International, drawing on 2,000 decision-makers across the US, Europe, and Asia, found that 56 percent of the final purchase decision is based on emotional factors. Rational criteria help establish which companies make the shortlist. Confidence, trust, and perceived fit can play an important role in determining which one wins.
This has direct implications for how B2B financial services companies should think about brand. If the buyer isn’t the dispassionate evaluator the industry assumes, then the brand’s job isn’t simply to communicate capability. It’s to create the kind of confidence, trust, and resonance that makes a buyer feel — not just conclude — that the choice is right.
Differentiation beyond the product
Theodore Levitt argued in a 1980 Harvard Business Review article (love the title: Marketing Success Through Differentiation — of Anything) that there’s no such thing as a commodity, only companies that allow their product to be treated like one. His point was that differentiation is always possible, even in markets where the product is functionally identical across competitors. The question is where to look for it.
In B2B financial services, the answer is rarely in the product. It’s in point of view. What does the company believe about its market? What does it understand about its customers’ challenges that its competitors either don’t see or haven’t said? How does it define its own role — not in functional terms, but in terms of what it’s actually trying to accomplish?
A company with a clear and consistently held point of view creates cognitive distance from competitors even when the underlying product is identical. This distance isn’t established through advertising; it’s built through the cumulative effect of how the company communicates, who it hires, how it talks to customers, and what it chooses to say publicly about the things that matter in its market.
I witnessed this dynamic early in my career, working with a start-up firm entering a category dominated by established players with decades of client relationships. The product was structurally the same as every competitor’s. There was no feature to hang a campaign on, no pricing innovation that couldn’t be matched. The work wasn’t about finding a product distinction, but about defining what the company believed, who it was for, and how it wanted customers and prospects to think about it. The naming, positioning, and narrative that came out of that process gave the company something to build on — a brand foundation.
The cost of deferral
Brand investment deferred isn't brand investment saved. Companies that put off the foundational work often find themselves addressing it later, under pressure from a competitive threat, leadership transition, or other significant change. By then, the need is more urgent, the stakes are higher, and the time available to make thoughtful decisions is shorter.
In the meantime, the absence of a distinctive brand carries its own cost. When customers see little difference between providers, price becomes an increasingly important factor in their decisions. A clear and credible brand gives them other reasons to choose a company, stay with it, and recommend it to others.
None of this requires a large advertising budget or an elaborate brand campaign. It requires clarity about what the company stands for, who it serves, and why that matters — expressed consistently across every interaction with the market. When the product itself offers little room for differentiation, the brand becomes that much more important.
