Too Many Brands

Be careful choosing the characters in your brand story.

Creating a brand with loyal customers is hard work. For some, a life’s work. Too many brands can be too much work.

Every brand needs adequate resources. The path forward may not be apparent when an extensive collection of brands encumber an organization. Streamlining your brand portfolio will help save money, simplify things for your company and customers, and create a better experience in the long run. Clear strategic priorities often lead to difficult decisions.

Brands are everywhere. We are all bombarded with hundreds of logos and advertisements every day. Creating new brands can seem quick and easy in an era of free logos, templates, and generative AI. What’s more, branding has become a subject of pop culture. Influencers talk about personal branding, and news anchors discuss rebrands as a public relations head-fake with a new package.

By now, savvy marketers know that rebrands are much more than a fresh coat of paint. Logos are the tip of the iceberg for a brand, something we wrote about in our book years ago.

At NeoConDesignDays, you find many logo walls. While a fashion giant like LVMH may be able to pull it off, you probably can’t. First of all, consumer fashion is not like commercial products. Brand loyalty is not an installed base. Second, while on the surface, we may admire the impressive brand portfolios of P&G, Nestlé, or Kraft, these conglomerates have individual brands bigger than the entire U.S. commercial furniture market.

So what’s going on here? Often, brand collections are the byproduct of company mergers and rollups. Company A has the capital and fortitude to acquire Company B. The combined new company now has at least three brands: Company A, Company B, and the combined entity, Company AB.

Why Acquisitions Occur

How did we get here? Acquisitions happen for several reasons.

Consolidation
When a market contracts, big fish eat the little ones.

Alignment
A complimentary strategic alliance can increase competitiveness. Stronger together.

Competition
An acquisition can eliminate a competitor. Buying can be cheaper than competing.

New Markets
Acquiring a new product category is faster than building one from scratch.

New Customers
Acquisitions can expand customer access. It might be a vertical market like healthcare or education, or vertical integration – a company with front-end services and customers that can leverage your back-end services.

Extend Capabilities
Acquiring companies for talent or core technology is especially prevalent in the tech world. It's becoming more common elsewhere with specialized skills and IP.

Ownership Logistics
There are many other financial or ownership transition motives for M&A.

Acquisitions happen for good and sometimes not-so-good reasons. Sometimes, it's about the perception of keeping up. Compared to your competitor's box of crayons, your one color can feel small. It may be ego or pride, but our sense of competition leads to parity.

Are brands A, B, and AB what customers want or need? According to Peter Drucker, the purpose of a business is to create a customer. Will your new rollup generate more customers?

Brands persist after the sale because acquisitions are challenging. The logistics are complicated enough: integrating teams, eliminating redundancies, defining new processes, and integrating cultures. The goal is for one plus one to equal three, but too often, one plus one nets one and a half! Preserving brand value after the sale is a challenge that starts before the ink dries.

$Preserving Brand Value Through and Acquisition$

No one wants to destroy the value of what was acquired, especially customer affinity. However, like large product portfolios, large brand portfolios risk confusing customers and internal teams. When there are too many brands, something must be done. Preserving brand value requires clarity about positioning and timing.

If you have too many brands, begin with a deeper understanding of the sources of customer value. The value of a brand isn’t a single number – it’s more like a function of its position in the marketplace, history, and other market dynamics.

How many brands do you need?

What do Holden, Alpheon, Saab, Pontiac, Saturn, Oldsmobile, Geo, Passport, Envoy, and LaSalle have in common? They were all part of the GM brand portfolio, now discontinued.

Today, GM has four primary brands for $170B in revenue. How many brands do you need? Some of the largest companies in the world, like Microsoft and Apple, have relatively small brand portfolios. They have many strong product platform brands that fall under a few large umbrella brands.

Demoting or retiring brands is difficult but often necessary. Much emotion and reserve sweat equity is involved, particularly among the acquired team. Or if company ownership is complicated. No one wants to kill a Golden Goose, but it’s easy to overstate a brand’s equity after an acquisition. Is Company A the same as before it was part of Company AB?

Sources of Value

Consider the position of each brand and its source of value, starting with its audience.

Audience
To whom does this brand appeal? How do you define its target and real audience? Who would miss the brand if it went away? Don’t only rely on your internal team. Research your customers and users to learn not only what they say but what they do. And what they truly need today.

Category
More broadly, think about the category. Where does this brand allow you to play? How is the category changing? How will you define an emerging new category? How do this audience and category fit into a long-term sustainable strategy?

Claim
Consider the claim or promise of each brand. How is this brand different and better than others in the same category? Does this brand have overlapping claims with other brands in your portfolio? To what extent do these claims align with your overall market position? How will the combined claim help you win?

Supporting your brand claim is where the rubber meets the road. Beyond the name, the logo, the story, and arming your sales force, it means aligning your internal teams to create an optimal and differentiated customer experience. What touchpoints will move customers forward? What interactions make or break your brand promise? What will increase customer loyalty? Ultimately, how will you deliver on each brand promise?

Many brands mean keeping many promises. If you don’t have the resources to commit to multiple differentiated customer experiences, think twice about keeping many brands.

Brand Roadmapping

Create a future-focused roadmap for your brand portfolio.

Retain the most aligned brands.
Keep some brands as parent or umbrella brands. Which identity best encapsulates your strategy and brand meaning? Create focused customer meaning unencumbered by legacy.

Demote valuable legacies.
Transition some brands to child brands focused on vertical market programs, a product platform, a service offering, or a targeted campaign. Leverage their brand equity as part of the overall message strategy without confusing the brand hierarchy.

Retire with a sunset strategy.
Some brands need to be retired. It doesn’t have to happen overnight – brand equity often resides with customers who will retire themselves. Consider your sunset strategy and take the time to get it right.

The price point is a key reason many brands are separated. It can be advantageous for a more expensive brand to be distinct from a lower-price brand to avoid confusion. However, it may become the worst-kept secret in the industry unless you create clear divisions between marketing, sales, fulfillment, and customer care – internally and externally. Other times, a more expensive brand connected to a lower-price brand can have a mutual benefit.

Often, there are critical differences between higher-end and lower-end markets beyond the price tag. In the same way, reaching different vertical markets goes beyond the product offering. Hospitals and universities buy differently.

It may seem counterintuitive, but creating a new umbrella brand from scratch is one way to clean things up. While a stable pool of brands exists in mature marketplaces, a new brand is a challenging but possible way to create new opportunities.

Regardless of your path, building and managing brands is an investment. If you have a collection of brands, your goal is to create an integrated strategy worth more than the sum of its parts. Each brand should exist to help you define where you will play and create pathways to win.

Learn, define, or reshape your primary brands so they each add significant value to your overall brand meaning. Make any necessary choices to right-size your brand portfolio.

If your brand is a story, don’t have too many characters.

Your org chart is not your brand hierarchy. If your brand is a story, don’t have too many characters. Your customer is the hero – not your brand. Brands earn loyalty by making and keeping promises. Be careful how many promises you make and how many you can keep.

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Too Many Brands

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