To be clear, there are hundreds of bad reasons to create a sub brand in a B2B market. The proliferation of brands is a real problem for a lot of very large companies. Every time they want to target a new market or launch a new product there is a temptation to create a new brand in order to ensure clarity of message and distinct positioning. This is a slippery slope and for the most part one that should be avoided.
However, sub brands do have a legitimate role to play in B2B markets. This article will look at three growing trends that are likely to require their (careful) use in 2020.
For firms looking to take a risk in a long established market
Sometimes it seems that innovation is now all anyone can talk about. The reality is, however, that the majority of so called “innovation” within traditional B2B markets is about doing existing things that little bit better rather than actually doing better things.
That’s because the risks are too high for true innovation. If I’m a CEO of a long established professional service firm and want to do something radical which may involve creating an entirely new organisational structure designed to compete with consumer brands and technology companies, then that is a huge leap, and one likely to represent unprecedented risk for my firm. Convincing the senior partners or board of directors that they should gamble their future profits on my hunch is going to be a hell of a struggle.
Creating a sub brand may offer a solution. In doing so we liberate those responsible for this innovation from the shackles of the parent brand, whilst protecting the latter from any direct risk.
It’s not ideal and at some point the parent brand will need to make a decision about its appetite for innovation or it will end up highly fragmented culturally and with no clear message to the outside world, but as a means of facilitating true change and proving new, exciting concepts within a highly complex and politically sensitive environment, it is likely to be the best of a limited set of options.
For firms looking to do something special with their marketing and communication
Most B2B and professional service organisations now understand the importance of having a compelling vision. However, few manage to translate that into an equally compelling communications strategy. The lofty nature of the visions are usually undermined by the lacklustre content the business serves to its audience via blogs, tweets, events and emails.
There is a further issue; in the unlikely event that the company is distributing content of a truly ambitious and engaging nature, there is still the barrier of the brand itself. Most people do not like to be seen sharing content from commercial entities at the best of times, least of all from markets perceived as traditional and dull.
There is a way to overcome this.
By creating a sub brand specifically for your content, you can build something that exists purely for the achievement of your vision, with no commercial messaging or any of the other unhelpful associations of the parent brand. Instead, this will be a brand that the audience can truly buy into, and that you can use as a vehicle to build a social community, run events, develop an email list and get in front of key influencers. Above all, it can signticanly reduce the cost per acquisition for MQL’s (Marketing Qualified Leads).
The downside, naturally, is that all of this brand equity you are developing is now on behalf of a separate brand, but there is no reason why you can’t make the affiliation very clear (at least in the direction of parent brand to content sub brand. Probably not the the other way around). You can even link to the sub-branded blogs and social channels directly from the parent website.
This is a strategy we have employed on a dozen or so occasions for ambitious B2B brands, and the results have been astonishing. In fact in one instance (within the health industry) the content sub brand became one of the best recognised names in the entire market. There wasn’t a door it couldn’t open.
One thing to make clear, however, is that this cannot be approached as a cynical marketing exercise. You must truly believe in the vision you are trying to achieve and ensure that it aligns in all its values to that of the parent brand.
Servitisation and productisation
This one I add with caution. There is a current (and important) trend for professional service companies to productise their offerings, while product B2B companies are adding layers of service to theirs. Both are intended as a means of differentiation and improving the customer experience, and in many cases it’s a critical shift for companies seeking to avoid commoditisation and retain share in markets becoming saturated or disrupted.
As part of this, it is natural for enthusiastic marketers and other senior decision makers to trial new brands in an attempt to crystallise the new offering. And in some cases, this is absolutely the right thing to do. A manufacturing company that wraps their product in layers of service never before seen within their market will be eager to demonstrate to the audience that this really is something new.
The reason I say “with caution” is that this is also an example of how a trend can lead to rapid brand proliferation. After all, if the new product is successful then it’s likely to spark others, each with their own separate brands. Very quickly a highly complex brand architecture will exist, with some of the new brands tying in very closely with the parent brand and others having far more distinct identities. Soon enough, the brand architecture will have descended into chaos and nobody will be quite sure how you got there.