Godfrey Phillips knows his way around brands. For 25 years, Phillips has focused on helping companies refine their positioning in the business-to-business space. He spent more than 18 years at the Young and Rubicam agency, where he worked with agency clients such as American Express, Xerox, the U.S. Postal Service, AT&T, and Holiday Inn.

Phillips joined American City Business Journals, the parent company of Portfolio.com, in 2003. As vice president of research at ACBJ, Phillips directs research efforts that support the company’s national advertising sales. For the last six years, Phillips has looked at what are the strongest brands for the small- and midsized-business market. This year, for the first time, ACBJ is releasing the results of its study of the top-25 brands for this market.

Phillips spoke with Portfolio.com editor J. Jennings Moss about shifting economic attitudes and what it takes to build a strong brand. Following are edited excerpts from the interview.

J. JENNINGS MOSS: Godfrey, start with the big picture. What can you tell me about what makes 2010 unique?

GODFREY PHILLIPS: 2011 is not 2008. That’s the first thing you have to understand. These three years have had a big, traumatic effect on this country. People don’t feel the same way. And if you think our country is going to be the same as it was three years ago, you’re wrong. And if you think your product and your brand are going to be the same, you’re wrong.

MOSS: Your research says that about 40 percent of small- and midsize-business owners believe the economy is starting to turn around. Yet you also find that a growing number of these people say the United States will lose its global economic dominance for good. What does this say about the economy?

PHILLIPS: It’s not like we’re talking about radical hippies or new age people. These are generally conservative business owners, and they have been hurt. They’ve seen changes that they don’t like, and they don’t believe that we’re going to be in the same place that we were three years ago. And they believe there are other centers that are important and the U.S. is not going to be the center of the commercial world anymore. This has massive implications—massive implications.

MOSS: Is there a positive way to look at that shift? Are businesspeople opening their eyes to finding business partners or other opportunities outside of the country?

PHILLIPS: At this point, we’ve just got to come to grips with the reality of not being seen as the center of dominance. It’s not about opportunities, it’s about mind-sets. It’s like you’re not the top dog and you’re not going to be the top dog. That’s the implication. It would be arrogant for us to go out and say now we’re looking for partners, why would you want to partner with a second-place finisher?

MOSS: But you still find that businesspeople are increasingly optimistic. Is that a contradiction?

PHILLIPS: People are optimistic, but they’re just saying the world’s not the same. You can be optimistic in a changed world…. I think people are just taking a big deep breath. You can’t underestimate what these two years have meant for the economy, people, and this country. I think everyone knows people who have been laid off or lost houses. This year is a time to take stock. The worst thing you can do is be aggressive, I think. Just take a deep breath.

MOSS: Besides digging into how this segment of the market feels about the economy, you’ve also done a sweeping analysis of how people perceive the brands that court their business. What are they looking for?

PHILLIPS: People just want you to address their needs. If you’re selling a brand to them or marketing a brand to them, and your messaging isn’t what they want to hear, if your product doesn’t fit their business, if you don’t have support and service to fit their business, you’re not even going to play. Never mind your brand. It’s about commitment and staying on course. People who commit themselves and stay on track win, but you have to commit.

When we used to do focus groups, people used to say we don’t want to be the flavor of the day, we’re looking for more business, more opportunity, more people to use the brand, but we’re not the flavor of the day.

MOSS: Are more businesses today just wanting to be that flavor?

PHILLIPS: In my 20 years working with this market, I’d say yes. I totally see it all the time, where companies say ‘We need to increase our revenue, so lets look at this market, it’s such an enormous market.’ Then, for a year they’ll have a committed effort, and then they’ll drop it. The problem is if you drop it, these guys remember, so you’re out. You’re out for a long time.

MOSS: If a brand is trying to appeal to the small- and midsize-business market and they go out, what’s the reason they pull back?

PHILLIPS: Because they don’t want to service the market really. You can’t just go in there and drop your product. To be honest, you have more of a problem in the midsize market than you do at the smaller end. Because at the low end, people expect that you can service them online or through call centers. But when it comes to the midsize market, which is the black hole, if I’m buying 400 big multifunction machines, I expect to have some level of commitment from that company that is more than just being answered on the phone, and yet companies only have dedicated teams for big enterprise, so this market just falls through the cracks. And it’s always been that way.

MOSS: One of the measures you use to gauge a person’s perception of a brand is ethics, whether the business leader thinks the company behaves ethically. According to the survey, you see ethical perceptions improving. What’s the real-world impact on brands?

PHILLIPS: If people question your brand’s ethics, your brand quickly feels its impact. On the other hand, not surprisingly, people expect brands, like people, to be ethical, so while that contributes to the stature of the brand, it is more a cost-of-entry requirement.

MOSS: What about older brands versus new companies and products coming to the market?

PHILLIPS: In bad times, people go to traditional brands. They pretend to give new brands some opportunity, but if it’s your business on the line, they’re not trying anything new. Bad times are good times for old brands.

It happened in the dotcom bust more than anything else. There were all these new technology brands, and people said ATT, Xerox, IBM, were all going to die because we have all these new people coming out. But being around for a long time became a good thing not a bad thing.

MOSS: Still, new brands get buzz through under-the-radar branding or viral marketing. Can that help a brand gain traction?

PHILLIPS: Some of it works for the general market, but not really when it comes to the business market. It’s your business on the line. It’s your kids’ college fund. People are working for you. It’s not like buying a new toothpaste. Business decisions are different. It’s so much more personal.

MOSS: What’s the secret for a company to make it to the list of best brands for next year?

PHILLIPS: Simply commit. It’s about your product. You can’t sell something that doesn’t work for that market. It’s about whether you can service it.