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Brand Strategy

Specialization vs. Generalization

When customers can Google and find the best in the world, they won’t hire you because you are average or well rounded. They will hire you because you are brilliant at something.

I was driving down the road the other day and a roofing company’s truck pulled up next to me that read, “specializing in all roof types.” How can a company specialize in all roof types? They are essentially saying, “we are just like every other roofing company.” What they should say is, “we specialize in metal roofs.” That would make them unique. That would make them an expert. That would create scarcity.

Your Audience is Not Everybody

The thought behind this innately contrary tagline is the idea that the roofing company wants to attract everybody. Sounds like a good business plan, right? What they don’t see is that if everyone is their customer then no one is their customer. Sure, we would all love it if everyone bought our product. But the days of mass media appeal are over. In the ’50s everyone was watching the same commercials, buying the same cars, and drinking the same drinks. Today, information flows differently. People live in their own tribes and are influenced by tribal leaders on social media or in their peer group. They buy what their friends buy. So unless you are Coca-Cola, Apple, or Amazon you are wasting your time trying to sell to everyone. The goal is loyalty with a few rather than single transactions with many.

Specialization Increases Perceived Value

For most company’s, most of the time, it is better to specialize in a narrow selection of services and products — especially upon launch or while in the early growth phase. Following a strategy that is more focused makes it easier to deliver a high level of excellence with greater efficiency. Specialization increases perceived value in 3 ways:

1. Specializing Positions You as the Expert
If you are the expert in your category you are no longer selling time or materials. You are selling your expertise. You have authority, influence, and knowledge that set you apart from competitors, and that creates massive value and revenue potential that generalist’s can’t tap into.

2. Specializing Makes Marketing Cheaper and Easier
If you are selling one thing it is easy to optimize SEO, sales processes, and marketing programs. If you are selling 10 things you have to have 10x the budget and do 10x the work to get those products or services out there.

3. Specializing Creates Believers, Not Just Buyers
Buyers are great. Believers are better. By specializing and becoming an expert in your field you make yourself so valuable that a customer can’t imagine their life without you. They become someone that believes in your company, your mission, and most importantly your value. A buyer, on the other hand, just wants to fulfill the immediate transaction and then move on. They don’t care about your brand or your company. It is easier to scale a company by creating believers. These are the one’s that will come back over and over, then tell their friends how much they love you.

Should My Business Specialize or Generalize?

If you want to position your company as the brilliant expert, specialize. If you want to be known by more than your products and services, specialize. If your company is newly launched or changing strategies, specialize to increase focus and save marketing energy.

If you have the marketing budget or brand recognition of Amazon, Apple, or Target, then there is obviously a case for generalization. However, in most cases for most businesses specialization is a better strategy.

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Branded House vs. House of Brands

One organization. Multiple brands. How do you organize them in a way that is clear to the consumer but still builds equity in the mother brand? Here are a few common strategies used by companies we love.

Branded House

In a Brand House Model organizations invest in making the single “mothership” brand image known and loved. Customers come to trust the mothership and then by default trust the sub-brands. In most cases, the corporate name and brand identity is one and the same, the marketing is the same, the brand position and the value proposition are the same. It’s simple and easy to apply across a multitude of marketing applications. Examples include Google, FedEx, or Virgin.

House of Brands

Another common approach is known as a House of Brands, where organizations market two or more different house brands. Powerhouses like Procter & Gamble (Tide, Folgers, Pampers), Unilever (Dove, Lipton, Axe, Ben & Jerry’s) and Newell (Yankee Candle, Rubbermaid, Elmer’s Glue) are great examples. Consumers don’t really care about the mothership brand. They care about the brand they are interacting with. Each sub-brand has it’s own value, promise, and identity.

Hybrid Brand

There is a third approach which is a bit messier because it tends to happen organically rather than by strategy. It is a hybrid of the two approaches listed above. Coca Cola, Marriott, and Amazon are three organizations that exemplify a hybrid brand strategy. The mothership is offering value and brand recognition, but the products themselves are also offering value.

The Coca Cola company has leveraged the strength of its namesake with a variety of mothership brand extensions like Diet Coke and Coke Zero, while also having house brands like Sprite and Dasani. Marriott uses a similar approach with a strong mothership brand, brand extensions like JT Marriott, endorser brands like Courtyard by Marriott and house brands like The Ritz Carlton.

So, how do I decide which one is right for my organization?

 

Put yourself in the shoes of the customer.

You may have heard it described as being unable to read the label because you are inside the Coke bottle. It is easy to sit in a room with decision makers at your organization without ever putting yourself in the shoes of the one you are trying to connect with. When discussing brand architecture, aligning on the right strategy is all about stepping outside of what you know and reading the label. Interviewing outsiders could prove helpful.

 

Where do I want to place the brand’s equity?

What do you want people to know more about/invest more in? Is it the mothership brand, the services/products being offered, or a combination of both? Are you planning on selling the mothership eventually? Are people more likely to buy from/interact with your mothership brand or your sub-brands? Make hard decisions on these topics and make sure the entire internal team is aligned so you can build a strong foundation from the beginning.

 

More brands means more marketing.

If you fall into the second or third category that means your organization will have multiple  brands to create and manage. More brands means more budget needed to make sure each is successful. Each brand will likely have their own unique look, website, message, value proposition, social channel, and position. If done right it could provide many opportunities for growing your organization.

Not sure which strategy is right for you?

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