Brand extensions: why and how to diversify with difference
If you’re turning your mind to planning for next year and thinking about what’s going to set your business apart, or what new initiatives projects you can play with – a brand extension might be just the thing.
I’m not suggesting you jump into rolling out an entirely new service or product line on 1 January, but rather, start thinking about different ways you can diversify what your business has to offer, add value to your clients, and improve your business by building off what you’ve already created.
What is a brand extension?
It’s pretty simple really – a brand extension simply involves taking your established brand name and stretching that into new product or service categories. It allows you to talk to your existing customers about something else that can add value to their lives, and reaching new customers who might not have engaged with your core offering. In a world where we’re all battling for a share of life, and mind, extending your brand offers unique and fun opportunities to build your business and increase customer “stickiness”.
Why extend your brand?
Brand extensions can be beneficial for a number of reasons, not least of all that when done correctly, they can help you protect your core product and what matters most to your brand, while engaging with new market segments. Think about Lego branching out into collectible figurines and movies, or Chuck Taylor adding clothing and accessories to their popular show line.
Other reasons you might want to extend your brand include adding new revenue sources to your business, building credibility by extending your brand with a partnership, generating interest and talk in your brand, or creating more touch points between your brand and your client base.
Brand extensions can be a great strategy for all businesses – whether you’re product or service based, or in the B2B or B2C space. The key of course, is in the execution.
So, how do you extend your brand?
If you’re thinking of extending your brand, work through the 4 Ps:
Purpose: When you find your problem, you’ll find your purpose. Consider how people are shopping for your brand and the problem you’re helping them to solve. If you’re already in business, this should be clear to you (if not, let’s chat), and everything you create that extends your brand should follow that same purpose.
Positioning: How will your extension be perceived in the market place? You should look to balance exclusivity and storytelling with reach and revenue. When you create your extension, you’ll no doubt think that it’s the new and shiny thing everyone will be flawed by – but the chances are you’re likely playing in a space already occupied by established brands. So focus on your story and how you’ll engage your customers with that. Not sure what that story is just yet? Let’s kick it around.
Premiumization: (I am sure this is a word). The reality it Success requires a good product. In other words, don’t make shit. Whatever form your extension takes – a new service line, consulting offer, digital or physical product, focus on quality, design and collaboration to create a premium offer that improves people’s lives.
Product: Of course you actually need something to sell. So when you’re ready to develop your product (or service) – apply the LASSO principle:
L – Is the solution lateral to your existing brand? Does it expand on what the brand already stands for?
A – Is the solution addictive? Will people actually buy it? Don’t build anything you don’t have insight over whether or not you’re adding value.
S – Can the solution be storied? How will you link it back to your brand and create memories with your consumers.
S – Is it scalable? You want your extension to be sustainable, you are using the extension to grow your business after all.
O – Is it ownable? What are the distinct assets in your product or service that you can own? What makes up the DNA of the solution – is it a taste, a smell, a benefit?
What form should the brand extension take?
If you’ve made it this far, a brand extension could be for you! But what form should your extension take? Here are some common ways you can successfully add a brand extension into your business.
Shift the form
This is the simplest brand extension. Change things just enough with your product or service to move categories, add incremental use, or change how consumers interact with your product or service. Examples include newspapers moving online, or restaurant brands moving into wholesale / supermarket shelves (eg Nandos sauce).
Transfer a component
Take greatest hit and break it down into different products and service lines. Think about your existing consumer and what you already own with them, then build out a new service line based on a particular element. In retail, an example of this is VB’s foray into herbal tea based off their hops. An accountant might break off their “coding” component on a job and offer a bookkeeping or CFO service.
Sell companion products
How else could customers engage with your core product or service? What other pains do they have? Colgate started with toothpaste, but then added dental floss, tooth brushes, and mouth wash. Likewise a financial planner might expand to offering mortgage broking in house.
If you’re looking for ideas to grow your business and build your relationships with your customers, a brand extension could be a good strategy. Wondering what an extension could look like for your business or keen to kick around how you’ll share the story of your extension to connect, engage, and inspire your clients – book a complimentary catch up here.
