Developing your brand should always be looked at as a long-term strategy and never built around short-term gains.
We see this every day, brands add new products or services and with each extension, the overall brand becomes little more diluted. Think of it this way. Your brand is equivalent to a pie and every time you add a new product/service you are removing a little slice or in some instances a big slice. Eventually, you will be left with an empty pie tin and your brand will have lost all value and recognition.
People don’t think of brands as multiple products/services, we tend to assign one brand name to each product/service. A great example of this would be Chevy and the Corvette. Over time, they have become separate brands but it all started when Chevy added the Corvette to their line of cars. Today, Chevy has a fleet of cars that they offer yet if you ask someone that drives one you will get two different responses either “I drive a Chevy” or “I drive a Corvette.” Here’s the problem though. Anytime someone is talking about a Chevy most people immediately are going to think of a Corvette, why? Because the brand has been diluted over time and now their brand’s image is made up of 2 separate brands as well as variety of sub-brands.
What’s the point?
Branding is a tricky thing and often overlooked since we are under the assumption that adding more makes everything better but the inverse is what’s true.
Up to 15% of a business’s most loyal customers account for 55-70% of the company’s total sales. (Hubspot)
You’ve heard the saying “less is more” however many businesses end up doing the opposite because they want to grow their brand and think offering more to a wider diverse audience will bring in more sales. Sadly, people confuse the power of a brand with the sales generated from that brand. Sales don’t necessarily relate to the strength of a brand, though.
If you have no competition, then obviously, it doesn’t matter how many segments you offer and in your mind, you would conclude that extending your line works.
Don’t be foolish.
It’s better to have 1,000 loyal brand advocates than 1,000,000 people that are only “buyers.”
80% of your company’s future revenue will come from 20% of your current customers. (Hubspot)
As Gary Vaynerchuck would say “you have to go deeper not wider.”
Add value to your brand and keep it laser focused on your ideal customer is.
By adding value and enhancing the brand you will end up making it stronger and if at some point you do choose to diversify what you offer then the main brand will have an establish foundation. The key is to retain the core values and not alienate your loyal customers.
Now, there are a few ways that you can expand your brand however always keep in mind that it can be a risk.
Run an experiment but keep it quiet
In business, the best thing you can do is constantly run micro experiments and if they fail to build momentum then you end up losing nothing or barely anything. Most brands, when they come up with a new product or service to add to their line they make a huge announcement. Instead quietly launch something and see what happens. If it takes hold then you can devote more time and money to fully develop that sub-brand but if not well… you can take it around to the back of the shed and dispose of it before anyone knows. A little morbid but you get the idea.
An established formula for success
Did you know that Chipotle is owned by McDonalds? Not many people do but it’s a great example of how to expand your brand. Chipotle quickly rose to fast food stardom in the past decade because people not only loved the food but also the concept: fast, fresh, and natural (as much as possible). Compared to their parent company, McDonalds, you probably wouldn’t associate those same words with them. In this instance, McDonalds replicated their systematized model and massive resources to create something new.
Research those that have succeeded and failed
Before you broaden, always do your research. You can find countless situations or case studies about brands that have developed a strategy that worked well or brands that have epic fails. Take what you find and brainstorm what would work best for your brand.
Summary
Before you decide to broaden your brand, you should ask yourself why this is important. But to clarify it even further, ask yourself why six more times for each answer you come up with. For example, you want to increase sales. Why? Is it because you simply want to generate more profits or is there another reason. By asking yourself why and diving deeper you’ll eventually get to the core reason. Maybe that core reason will lead you to the conclusion that you don’t need to expand your brand and another strategy would work even better. Whatever the reason ends up being, it always helps to have clarity. Remember, your brand is your reputation which means you should maintain it. As a brand, it is up to you to make sure people’s expectations and perception are in line with your brand’s message and values.
