When Should You Add Another Brand?

Multiple brands aren’t always the best approach.

My client often ask me if they need a separate brand for new products or services, especially if the offer is “breakthrough” or radically different from what they currently sell.

Creating a separate identity may seem like a no-brainer, but it’s not necessarily the right choice.

I’ve noticed a trend of sorts recently towards multiple brands, which isn’t always a good thing. From my observation, brand-breeding seems especially prevalent among solopreneurs who seem to feel that every endeavor needs its own brand platform.

These independent professionals are trying to segment their brands and their lives, but often don’t succeed at either effort. The smaller the company, the harder it is to juggle multiple brands.

Larger firms have similar issues, but it’s much easier to manage sub-brands or even disparate brands when you employ thousands of people and serve markets around the world. Different divisions often have their own brands, staff, and visual identity for operational efficiency and marketing purposes.

Regardless of whether you’re sitting behind a desk at a Fortune 500 company or a start-up, my advice on when to create a add another brand can help you make the right choice.

First, let’s look at the symptoms of split-brand personality disorder…

  • Multiple email addresses for the same contact, each on different domains.
  • Several websites, often stacked up in a pile of 3 or 4 URLs on business cards and letterhead
  • A blinding variety of logos which don’t seem to have any relation to each other
  • Customers are confused by the variety of product brands and/or company brands.

If you deal with any of these symptoms on a daily basis, or other issues like multiple signs on the door and not knowing what name to use when answering the phone, you may have a brand problem.

Multi-Brand Hazards

Sometimes a new offering seems to demand its own brand, but it does carry risks. Stop and think hard before you head down that path. Downstream implications of multiple brands mean your business must deal with issues like:

  1. What website do we send customers to? Is it worth splitting your website traffic between two or more sites, of is it better  to have one site with several products or services listed?
  2. What email addresses will our staff use? A consistent address build brand value, while variations dilute the brand.
  3. How do we manage leads? Are responses uniform, or to you need brand-specific messages?
  4. Will you have different sales teams for each brand? If yes, are the competing with each other for business?
  5. Is there a unique P&L for each brand? If so, can you easily allocate revenue and expenses?
  6. How will you manage social media profiles? One for each brand or an umbrella presence for the whole company?

These and many more queries will come up as you work to manage your multi-brand business. Sometimes it’s worth the trouble, and often, it’s not.

When Is it Right to Add Another Brand?

There are some valid reasons for creating a new brand. It makes business sense to develop a stand-alone identity when certain criteria are met. These include:

  • A change in geography. If you’re entering a new country, a separate brand may make sense to address cultural differences. Often there’s a benefit to carrying forward an existing brand, but sometimes the language or imagery is not appropriate in the new market. A classic case in point is the Chevy Nova: “no va” mean “its doesn’t go” in Spanish, no such a good moniker for a car!
  • A dramatically different market. When your new offer targets a unique customer set, like small businesses rather than your usual enterprise market, branding can be used to differentiate the offers. This can help limit segment migration and fears one group of customer may have that you’re losing focus on their needs.
  • Differentiation (or discretion) is required. Sometimes a new offer appeals to a group of customers your existing buyers don’t really want to be associated with. Instead of selling both offers under one brand, you may chose to roll out the new offer with a distinct brand to avoid rocking the boat.
  • You have an exit strategy. Some products are developed with the intent of being sold once they gain traction. This is a lot easier to manage when the offering doesn’t carry the corporate name or that of the marquee product you plan to keep in your portfolio.
  • Vastly different products. If you’re launching a completely new and different category of product, you may find a separate brand is easier to sell to your existing customers than one that looks too much like what they’re used to. An example might be an organic yogurt firm branching into hosiery. The buyers might be the same, but they could have trouble making the connection between your product lines.

If you’ve got more questions about when or how to introduce a new brand, I’m happy to help. Feel free to leave a comment or give me a call at 678.823.8228.

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