Brand diversification: extend with caution

Extend with caution

In the search for more income, many brands seem keen to broaden their mandate or redefine the sector they see themselves as now being part of. But the hunt for diversified income streams comes with its own list of dangers and the most obvious caution is this: don’t lose the plot. Don’t spread your brand so wide, generalise your position so much or shift your emphasis so far from where you’ve been that you lose credibility, authority or distinction in the minds of your customers.

This is driftnet strategy.

I watch with concern as companies make plans to “lifestyle” their brands, shifting the emphasis of what they do in order to introduce the new product lines that they hope will invigorate demand. This is driftnet strategy. It’s based on the belief that if you trawl wide enough across a broad enough front with a general enough message you’ll end up with a bigger catch than what you’re hauling in right now.

You can’t find relevance

Dig a little deeper into the plans and it becomes clear that the sectors brands often wish to rush into are already crowded (which marketers justify as proof of demand) and the rationale for this move is based on perceived interest/opportunities that are exactly that – perceptions – and that should, with rigorous appraisal, be dismissed as optimistic rather than substantial.

You don’t automatically become a better brand, a bigger brand or a more attractive brand by walking away from, or downplaying, the equity you’ve worked so hard to build.

In some circumstances of course, diversification is the best strategy going. Clearly if the sector itself is dying or if you are being converged on or commoditised at an accelerating rate, the need to disrupt your business case and reframe your brand is obvious. IBM have shifted their emphasis a number of times to powerful effect.

You can become a more powerful and vibrant brand into the future if you can introduce an idea/product that extends the relationship people have with your brand in ways that feel effortless and delightful. But if the effect of diversifying is simply to weaken what you already stand for by spreading what you do over a wider area and hoping that customers will find “relevance” in your presence, the effect may well be the opposite of what you intended.

My simple rule for brand extension/diversification is this: Go from strength to strength and not from strength to hope.

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