Brent Niemuth, President / CCO
The art of brand building still remains a mystery to many companies. During these tough economic times, business leaders are searching for ways to grow their brands, expand their reach and influence their bottom lines.
Retailers need to reach more people with more products, more often. Human nature tells us the best way to grow a brand is to sell more stuff to more people. Makes sense, right? It’s simple math. Ironically, the opposite is often true. The broader your product offering, the more watered down your brand becomes. The more watered down your brand is, the less meaningful and memorable it is to consumers.
The goal is to own a position in the minds of consumers. What does your brand stand for? When people hear your company’s name, what do they think of? Owning multiple positions in the consumer’s mind isn’t an option. It simply can’t be done effectively. It’s a fact. Our minds don’t work that way. With all of the competing marketing messages today, you’re fortunate if consumers can remember one thing about your brand. Asking them to think of you for multiple things is asking way too much. After all, that’s the simple definition of branding: a singular idea or concept that you can own in the mind of the prospect. Levi’s
sells jeans. Starbucks sells coffee. Hershey’s sells chocolate.
Addition
Allow me to explain how expanding your brand can actually weaken it. Al Ries, one of the world’s better-known marketing strategists, calls it the “Law of Expansion.” The power of a brand is inversely proportional to its scope — i.e., the broader a brand tries to get, the less focused and less successful it becomes. In other words, you simply can’t be all things to all people. Yet many brands still think they can (or at least they’d like to try). It may sound a bit counterintuitive, but the more focused your brand is, the narrower your product offering, the better it will perform in the long run. And that’s the key — in the long run.
It’s true that if you add products to your merchandising mix today you’ll perhaps see a spike in sales tomorrow. But most likely this will be short-term success. Branding is meant to be a long-term endeavor. This is where many CEOs make a mistake. Do they invest in the brand today, staying focused on its core competency so it can build brand loyalists for the future? Or do they expand the brand today in order to make short-term gains, but ultimately weaken the brand in the long run?
Let’s use Starbucks as an example of a company that added products to expand its brand only to have it backfire. Howard Schultz bought Starbucks in 1987 with a very focused core concept — create a European café experience in the United States. Starbucks offered premium coffee in an inviting and comfortable environment where people could relax, meet with friends and enjoy a tasty hot beverage. Pretty simple idea, and unique at the time. Of course it was hugely successful. The popularity of the brand grew rapidly and legions of brand enthusiasts wouldn’t dare buy their morning coffee anywhere else.
Then the visionary Schultz left the company and the bean-counters (no pun intended) took over. Starbucks’ focus quickly shifted from offering a unique café experience to growing the brand, adding stores and expanding product lines. Growth at any cost was the new mantra. Apparently being the greatest coffee house in America wasn’t enough. Starbucks wanted more. So the new corporate team added products. Soon you could buy music CDs, breakfast sandwiches, breath mints, tote bags, calendars and lots of other things that had absolutely nothing to do with coffee. Sales spiked at first, but eventually there was backlash. Turns out, people didn’t want these things. It wasn’t what they went to Starbuck’s for. They went there for one thing: coffee. The addition of these other products did have a lasting effect, however. They hurt the long-term perception of the brand. Starbuck’s brand suffered greatly. It took its eye off of what made it special and tried to be everything to everybody. It failed.
Schultz has since returned to Starbucks and gotten rid of many of those additional products that didn’t make sense. He’s taking the brand back to its roots, and it’s working. Lesson learned.
On the other hand, Harley-Davidson is an example of a brand that’s been successful at adding all kinds of product extensions. You can walk into a Harley-Davidson dealership and walk out with a bag full of merchandise with the famous Harley logo without even looking at a motorcycle. Harley-Davidson sells the usual leather jackets, T-shirts and bandanas. But you can also buy Harley-Davidson licensed coffee mugs, Christmas ornaments, sunglasses, watches, ties, boots, shot glasses, underwear and even a rattle for your baby. Surprisingly, Harley-Davidson fans buy this stuff by the truckload. Why? Because Harley-Davidson doesn’t just sell motorcycles; it sells an attitude. Harley-Davidson sells freedom. Freedom on the road. Freedom from the daily grind. Freedom from the desk job you wish you didn’t have. It sells a rebellious attitude, a swagger, a sense of community. If you’re lucky enough to be part of this exclusive leather-clad community, then anything with a Harley-Davidson logo on it appeals to you. Harley-Davidson uses its brand as a filter for everything it sells, and it works.
Subtraction
Now let’s consider the opposite of adding products. Ries refers to this as the “Law of Contraction.” A brand becomes stronger when you narrow its focus. It’s far easier and more effective to focus on doing one thing really well than trying to do multiple things at an acceptable level. Michael Jordan was the greatest basketball player to ever play the game. He focused on becoming the best at one thing. Then he tried to expand his skills into baseball. How did that turn out for him?
Are you wanting to grow your brand, expand market share and increase revenue? Thinking about adding product extensions to achieve this? Try subtracting products first. Get rid of products that don’t perform. Are there products offered in your catalog or on your website that simply don’t make sense for your brand? They’re taking up valuable space for the products that are real winners. Weed the losers out. It’s human nature to want to add products to grow your business. But time and time again, brands that narrow their focus see better results.
Ford Motor Company’s “Miracle Man,” President and CEO Alan Mulally, had a daunting task ahead of him when he took the reins in 2006. He needed to turn around a failing brand that was on life support. Was his strategy to add product lines, introduce new brands and acquire other companies? Nope. He did just the opposite. He immediately started subtracting products. He shed European subsidiaries Volvo, Jaguarand Land Rover, and is phasing out the Mercury line. He narrowed Ford’s focus.
“People really want to know what your brand stands for, not so much your house of brands,” Mulally likes to say. He’s bet everything on the Ford logo, and he’s winning. Ford’s stock was at $1.03 a share when he took over; it’s now trading above $16.
When in doubt, always narrow your focus.
Multiplication
The secret to effective branding is taking what makes you special — i.e., all of those magical moments that create memorable customer experiences — and multiplying them over and over again. Consistency and repetition is key. Multiply the things you’re good at. Repeat a similar experience at every customer touchpoint.
Cross-channel apparel retailer Horny Toad does a great job of taking its unique and quirky personality and multiplying it across all channels. Yes, Horny Toad sells women’s and men’s apparel, but it’s the brand’s fun personality and what it stands for that makes it different. Horny Toad’s motto is “Every day is an adventure.” It makes you feel just that every time you interact with the brand, regardless of channel. This core message is multiplied throughout its catalog, on the pages of its website, in its emails and in its social media efforts.
View social media as a tool to magnify your brand. It should be an extension of all your marketing efforts. It’s part of the mix, not the silver bullet that can fix everything. That said, social media can be a very effective way to take your brand story and multiply it rapidly.
Simple math — addition, subtraction and multiplication — can have a significant effect on your branding efforts. The secret is knowing when and how to use each.
As seen on Retail Online Integration
Tags: branding, Brent Niemuth, catalog design, Strategy