We’re often asked to help our clients bring clarity to a brand architecture that has become muddled as a result of acquisitions, product/service brands or multiple divisions.
There is no one right way to solve the problem. Like a tough multiple-choice question, every choice is right, but only one is better than the others. Everybody is familiar with the old branded house vs house of brands set up. But it’s not that black and white. Usually some kind of hybrid model will be the better answer.
There are many nuances, but six key factors can help you quickly clarify which direction will be best for choosing a brand architecture. While there will be some inherent risk in whichever direction you choose, you can reduce that risk by carefully considering the following:
1. Markets
Maybe the single most important factor is the markets that you sell in. If your company and products are targeted at the same market, then a single overarching brand can bolster awareness, leverage marketing spending and strengthen reputation. If you have products that sell into very different markets, then totally different brands can protect markets from each other, reduce risk and enable distinct stories and messages.
2. Clarity
Related to awareness, clarity is about focused and purposeful storytelling, clearly articulating the value that your brand delivers to customers, employees and other stakeholders. If customers aren’t sure what you do or sell, or your employees can’t explain it well, then a single brand that extends across both company and products can help.
3. Disruption
Any change of brand causes some disruption, but it should be measured against the long-term gain. If your product brand is very well known, but your corporate brand is not, then aligning under the product brand will cause some disruption with employees, but not with customers. On the other hand, if your product or corporate brand is well-known, any change to it could be at your peril.
4. Culture
Brand IS culture and culture IS brand. Aligning under a single brand can help rally employees around a shared purpose and build a more cohesive culture. On the other hand, forcing employees to drop a long-held and beloved product or division brand name for a new one can cause morale issues, poor performance and encourage good employees to leave.
5. Flexibility
Change is the only constant. Consider how the company may change over the next decade, including possible acquisitions, new product development, market diversification, new channels etc. Whichever model you adopt, flexible policies can help prevent problems later when opportunity demands a different approach.
6. Cost
It’s far more expensive to maintain multiple brands than a single brand. But there’s also a cost to changing a brand in everything from signage to product labelling to training a market to transfer the attributes associated with the old brand to the new one. The latter is the biggest cost and can carry the biggest risk depending on your market. In a B2B world, cost and risk are smaller because customers are often individually known and communications can be targeted. In a B2C world, cost and risk go up considerably.
Ultimately, there isn’t one right answer, but thinking carefully about these six factors can help you choose a brand architecture as a platform for future growth.