Co-written with Pete Canalichio
The entertainment sector is currently evolving the art of building out brand success in exciting ways. And there are lessons in how they are doing that for entrepreneurs and companies with a brand that people want more of.
Once a feature film box office hit would have simply meant a sequel in the same media. Successful film one would have led to film two and so on. These days though, using what is known as a “tent-pole strategy”, the build-out for major releases is more about expanding and interpreting what works so that it becomes vastly more available across broader fronts creating a 360 degree consumer experience.
Tent-pole movies are usually widely released and receive heavy promotion to grow momentum and a groundswell fan-base. The film itself is not the major focus for profits however. Rather the film depends on the licensing of ancillaries such as toys and games to turn interest into global success. Frozen for example has transformed from a cinema property to a brand that will make its presence felt across multiple products and formats, e.g. Disney on Ice and theme parks.
What’s the critical asset you have?
And Disney has been able to do that because Frozen the film is only the mechanism. The critical asset they have to work with is the success of the characters. As Tim Maleeny, global chief strategy officer at Havas Worldwide observed in this interview, “Frozen … has succeeded by combining multi-dimensional characters with classic storytelling … In the process, Disney gave a modern generation of young girls, and sometimes boys, a film they could embrace, and a lot of theme park rides and merchandise they could buy.”
Two ways to grow
So if you’re a successful entrepreneur with a brand that people want more of, it seems to us you have two options:
- You can continue to grow the brand as is. Some brands of course should remain focused on the sector they are in. That’s where they are most intensely competitive and there is enough growth and potential within that market for them to hit their targets.
- You can take a cue from what is going on in the entertainment sector and opt to find growth by telling a more extensive story. Many brands don’t strategize for this early enough. They don’t have a master plan in place to build out from their core success to meet wider, not just greater, demand. There are three key reasons for that in our experience: firstly, they didn’t identify their core growth strategy at the outset; secondly, they haven’t identified the true critical asset(s) that will underpin expansion; and finally, they haven’t quantified the extent of their growth or its ROI.
The five expansion questions
If you do decide that diversification is critical to your growth agenda, here’s the five factors you will need to quantify:
- How much do you want the brand to be worth? – It’s surprising how seldom this question gets asked, and yet it’s critical because it not only defines the value of the brand for the business, it should also frame the level of investment that the business is prepared to make in the brand. You can define brand worth in a range of ways of course – by revenue, by margin, by percentage of total market share or by book value. The important thing is that you have a number that defines success and that forms the basis for what you bankroll.
- Over how many sectors? – It’s important to have an overview of the potential stretch of the brand. In other words, where do you see it expanding into? With traditional licensing deals for example, so many brands think about expanding on an offer by offer basis rather than consciously planning where the next brand interaction sector might be from the “big picture” down. Our view is that successful brands know how they will expand, where and with whom. They also need to be aware of the contribution to overall worth that they wish to derive from each sector they participate in. So, in the case of licensing deals for example, they need to consider not just the financial returns but also what expansion might mean for overall brand presence and value. In other words, they need to be able to strategize top-down and bottom-up. Critically, they should define ‘trip points’ in terms of reach and revenue in their strategy that decide when they should consider casting their net wider.
- Over how many countries? – If your brand is ranged across multiple countries or regions, it’s vital that you plot where you will expand market participation and in what order. This should be led by market appetite, but you should also factor in potential market size, uptake rates, the success paths of others in each market, the levels of competition in the sectors you are looking to expand into, and of course whether you will be able to achieve benchmarked levels of margin as you go.
- Over what period of time? – It’s important to know the timeframes within which you want to achieve growth. Again, whilst that may seem obvious, a lot of brands don’t think through the implications of that in terms of forward planning, resourcing and particularly runways. The key determinant here will be market demand. How quickly will you need to expand in order to fulfil consumer interest, and what dependencies will you put around extending into a particular market?
- Using what resources? – Where will the growth come from? After determining where to win, you need to determine how you will win. This requires you to take a look at your internal capabilities and priorities. What part of the expansion can you do and have the capacity to do? Based on this you will need to assess what parts need to come from external resources. This could include sourcing, where you will do the marketing and sales, acquisition where a new company will be integrated in to take on this role or via licensing where you can leverage the competencies and bandwidth of third parties to execute those parts that complement what your team is going to do.
By developing an overall plan of what your expanded brand looks like, and a strategy for how, where and when that will roll out, with what packets of investment, you will be much better placed to judge every opportunity on its merits and you will be able to connect those opportunities within the context of achieving your overall goal for brand worth.