A B2B company recently approached us with a problem: a confusing list of several dozen products, each with its own made-up name and without any sense of organization. And with a series of acquisitions and ongoing internal product development, the list was growing longer and more confusing every year.
The chaotic roster itself was not the only branding and business challenge this company faced. Since marketing and sales had focused on building those product names, customers tended to have more affinity with individual products than with the corporate parent. This created several problems. Among them: It hindered the marketer’s ability to create customer loyalty and made cross-selling difficult.
Unfortunately, this is an all-too-common scenario with many engineering- or technology-driven organizations. Whether it’s five or 50 different brand names, product-level branding diffuses the equity of the parent brand and encourages customers and even internal sales to think of your company as a point-solution provider.
A holding company brand architecture certainly has a time and a place. When a company’s products or divisions operate completely independently of each other, it may be useful to maintain separate brands with their own value propositions. For instance, this works for Adobe, which maintains several successful product brands – such as Illustrator and Photoshop – in addition to their unbranded service lines. However, there is a trend in the B2B world toward consolidating sub-brands in favor of a “master brand” brand architecture strategy. And there is good reason for this.
- Brands are expensive to maintain. Individual brands, each with their own stories to tell, should be supported on their own and often require significant budgets. Each brand needs a separate marketing and communications plan to ensure that key audiences understand the differentiating factors and benefits of doing business with that product, service or division. If a company has a very broad portfolio with many different products, the cost of maintaining that large number of sub-brands is unrealistic. Many of those sub-brands will suffer from lack of support and become meaningless in their respective markets.
- The corporate brand does not get credit for successful sub-brands. In some cases, a very successful product, service or divisional brand can overshadow the corporate brand. And although customers may be very loyal to that successful sub-brand, the company is probably missing out on significant cross-selling opportunities. In essence, because customers connect their positive experience to the product rather than to the company they are doing business with, they are probably unaware of the company’s other offerings. Companies in this category are accustomed to hearing customers say, “I didn’t realize you also provide X, Y and Z. I have been using your competitor for years!”
- Employees lose sight of what the corporate brand is really about. In a worst case scenario, when the internal focus is on building up individual products or services, employees can forget to support the corporate brand. How do the individual sub-brands relate to each other and the parent organization? What is the larger vision the organization is striving toward? Are our product and service offerings supporting the master brand, or is the brand story rewritten for each product sale? When these questions begin to crop up, the corporate brand is in serious jeopardy of becoming obsolete.
With our recent client, it became apparent that a simplified brand architecture was a necessity to build the corporate brand and move the company forward. Although the process is never easy — for this company it will mean retiring a few dozen brands over several years — a streamlined architecture will definitely result in a stronger master brand.