Multi-product vs Multi-brand strategy
For B2B techs, particularly Software as a Service (SaaS) companies, innovation is key. And, as we all know, with innovation can come a proliferation of new products under your brand umbrella.
There is always a temptation with a new product, especially if it is spectacular, to create a whole new brand. Let’s face it, when you know your product is good, it’s like a favourite child. You want to lavish it with a shiny new visual identity, brand positioning and catchy tagline. But when it comes to your brand portfolio, having more brands does not necessarily mean having a bigger slice of the market.
As marketers we are officially Strategy Neutral. And we mean neutral not in the “We are Switzerland and will take no action” way but in the “Our favourite strategy is the one that will work best for you” way.
So, do you need a multi-brand strategy? Or would a multi-product strategy work best?
Here’s an easy test to indicate whether a multi-brand strategy could be best for you:
Will the product be targeted to your current market?
Does the product fit your brand promise?
Does the product fit your brand personality?
Does the product compete with your existing products?
If you answered:
…then the chances are it could.
A great example of a multi-brand strategy is that of InterActive Corp (IAC). Their purpose, since 2003, has been to be the world’s “largest and most profitable interactive commerce company by pursuing a multi-brand strategy.”*
It’s safe to say they’ve achieved this, although many people have never even heard of them. So let’s see what’s under their umbrella.
The Daily Beast
Some very popular and well known brands, and no indication they’re part of the same family.
Now, IAC’s brand positioning is corporate, tech-focused and acquisition hungry. Does that sound like Tinder? No.
This is the reason the strategy has worked. Each brand has its own personality, it’s own positioning in the market and its own target audience. It’s safe to say that Investopedia users will have different expectations to the users of CollegeHumour.
Of course there may be some cannibalisation of market (there’s many who may be on both Tinder and OkCupid) but overall this strategy has seen IAC grow to 2.5 billion users a month and 350 million unique users.
One final benefit of a multi-brand strategy is protection. If crisis hits one of your brands the reputation of the others should be held relatively intact.
For instance, if Vimeo crashed, would you blame The Daily Beast?
Now, think back to the quiz. What if you’d answered the reverse?
Yes, the product will be targeted to your current market
Yes, the product fits your brand promise
Yes, the product fits your brand personality
No, it does not compete with your existing products
When your products are complementary, not competitive then consider the benefits of a multi-product strategy.
If you have a well-recognised and well-respected brand in your sector, you have a great opportunity to launch your new product to a ready-made market of loyal customers. They already like you so there’s a good chance they’re interested in what you produce next.
For tech companies in particular, connectivity plays an important part.
Take Adobe’s Creative Cloud as an example. Each of the applications in the suite has a different use. But each product has a reliance or connection with the other. They are completely complementary.
Adobe already has an amazing reputation and they leverage it well. If they were to launch a new product tomorrow users would be confident that a) it would work and b) it would integrate with the other Adobe programs they already use.
If Adobe adopted a multi-brand strategy for their new product they would risk being misunderstood or ignored by their devout customer base.
So, as self-appointed Neutral Strategists, our advice is this: Look to your product, look to your brand, look to your customer. It is there that you’ll find the brand strategy that fits.