Over the last couple of years I’ve interviewed a number of CEOs and CMO’s from the world’s most exciting brands, and one of my favourite questions to ask is how far they believe they can stretch their brand. After all, once you have that brand equity built up, it’s only natural to want to channel it in new directions in order to grow sales.
I should say that there is a slight difference between brand stretching and brand extensions but for the sake of this short video we’re going to keep it all fairly simple.
So, for example, if a DIY company sells hammers and has a great reputation among its target audience, then it may decide to also sell nails. If anything it would be slightly irritating to the audience if they didn’t sell nails, right?
But how far can this go? Should a gym also sell trainers? Should lamborghini sell speed boats? Should a digital marketing agency also print business cards?
Well in the interviews I’ve conducted with these CEO’s and CMO’s, there are four common themes I’ve found in their answers:
– They can do it well – well that’s pretty obvious. It needs to connect to a core operational competence and not take you in some unknown direction.
– They continue to speak to the same people – the whole point about brand equity is that a certain person already trusts you and likes buying from you, so it stands to reason that your new products should still be geared towards those people, otherwise the products aren’t inheriting any value from the parent brand.
– They make sure it is adding value to these people – you have to believe that the product or service is really helping these people, and it’s not just a lazy way of earning a few more sales.
– They never lose touch with their core/essence – what is that one thing that most defines the business above everything else? If the gym is known for its personal service, then selling trainers would be fine just as long as they were sold in a personal manner. McDonalds’ core is convenience, so if they started selling pasta dishes that took 8 minutes to prepare, it wouldn’t work.
The most important thing to remember, however, is that before these brands have even considered stretching their brands, they’ve made sure they’ve absolutely owned their primary audience with their existing products or services. If there are any inherent problems in your current offering, trying to stretch it further will only bring the whole thing tumbling down.
So before you even ask yourself this question, first make sure that you’re the number one brand in your existing marketplace.
See you next time.