Brand Architecture is a key strategic tool to organize a business so that audiences will understand what you offer and how they can engage.
The rules for organizing brands today are evolving. There are important forces that have changed how external audiences engage with brands. Probably the most important is technology and how it has enabled people to know more, purchase more efficiently, and decide more quickly. The consequence is that a company and its products and services need to be communicated with a new simplicity so that all key audiences easily understand the business you are in, how they can find what they need, and at the same time understand the breadth of value your company brings. This is the goal of building a strong brand architecture.
Why it is an Imperative?
Muddled Offerings. The most common branding issue we see today is that corporations have a very muddled array of products and services that are not well organized and therefore difficult to figure out. This is caused by a variety of circumstances:
- Consolidation through acquisition, merger or organic reorganization
- Evolution of a business into new areas that are either completely new or adjacent to existing capabilities
- Expansion into higher margin businesses from a legacy offering
- Spin-offs that require new levels of explanation.
Need for New Understanding. The shakeout from the economic trough we experienced, while difficult for most businesses, has presented the opportunity to look at the resulting business through a new lens and to sharpen focus to generate new levels of interest and generate higher revenues. Further, this sharpening can have enormous benefit for the financial community, helping them not only understand the business better, but also have more confidence in a company as it moves forward.
Galvanize and Engage Employees. In addition to the obvious outward value of a clear and easy-to-understand brand architecture, in many cases the employee base doesn’t always understand the breadth of what their own company offers, how the parts are interrelated, and the opportunities to expand customer relationships. Just imagine the power if every employee more fully understood your business and could be a true brand ambassador.
So focusing on a clearer and more understandable framework is an essential task in the new economy. The good news is that there is a disciplined process to determine the best way to organize and communicate a business’s offerings to more easily engage with key audiences.
Organizational Architecture Should Not Drive Brand Architecture.
Brand architectures should be designed for external (outside) audiences to “explain” a company’s business so that they can understand and engage. The easier it is for an external audience to understand, the greater the chances they will respond, whether it is a customer audience, a business or trade editor, or a financial analyst.
Companies are often organized for reasons that may not make sense to external audiences. The drivers of internal organization can include:
- Legal requirements
- Tax circumstances
- Financial reporting
- Legacy business history
- Acquisition complexity
- Leadership opportunities
But often these organizational decisions are not the way outside audiences see a company’s business. From their standpoint, they want to engage to find a specific product or service, and really don’t care how the company is organized. The consequence is that a company needs to have a “brand” architecture constructed from the outside in. While this sounds relatively obvious, getting internal leaders to agree is usually a significant challenge.
Below are some helpful ideas about how to engage the leaders to successfully develop an appropriate brand architecture.
What kind of Brand Architecture?
A Brand Architecture is a systematic means of focusing and organizing your brand assets to ensure that target audiences understand the breadth and depth of value you offer them.
There are several basic types of brand architectures that, in a pure or hybrid form, are the underpinnings of clarity. Each is developed by determining the best way to express the business vision through the lines of business.
A Masterbrand Architecture is a monolithic structure where, from a branding standpoint, all business units, subsidiaries and divisions share the same brand. The “Masterbrand “ is also sometimes referred to as the “Corporate, Umbrella, Parent or Mono” brand. Good examples of this strategy are FedEx and GE. In general, everything carries the FedEx and GE Masterbrand and sub-units are defined by descriptive language.
An Endorsement Brand Architecture uses a common endorsement for all of the operating units, and the parent brand functions in a subordinate manner to each operating unit brand. For example, United Technologies operates as a parent brand as it faces Wall Street, but each operating unit is identified by its own brand with an endorsement. The Sikorsky business is branded Sikorsky, “A United Technologies Company,” but uses the iconic “gear wheel” symbol, as does Hamilton Sundstrand, etc. To make matters more complex, sometimes the sub-brands of United Technologies use a legacy identity when facing specific customer audiences.
A Portfolio Brand Architecture, sometimes called a “Free-Standing Brand Architecture”, keeps separate identities for many or all of its brands. Particularly if there is sufficient marketing support for individual brands and it is believed the parent does not provide any brand equity that would benefit the individual brands, a portfolio architecture is appropriate. Procter & Gamble manages a portfolio brand architecture. General Motors also manages a portfolio of brands with little overt brand equity supplied by the parent.
An Ingredient Brand Architecture uses a principle brand (e.g., Intel or NutraSweet) as a common element in supporting and qualifying other brands. The premise is that if the ingredient is good, the brand it amplifies is better than without it. In the case of purchasing a PC, there is research that indicates that consumers look first for the “ingredient”, the (Intel) processor, before the brand it is within.
How do you decide which type of architecture is best? If you remember the golden rule (from the “outside in”), that should be the starting point. You start by determining which are the most important audiences. For most companies it is customers. But for others, it is financial & industry analysts, key trade media, and even governments. Therefore, the first task is to determine audience priority. The next step is to determine what each discrete audience needs to “hear” or understand in order to engage with your brand. You must look at your company from their point-of-view. This often requires outside help and research so that you can have an objective view of the marketplaces you serve. Almost every company we work with has a belief about how external audiences view them, and this view is naturally biased and often incorrect. Having objective insights also helps put in perspective internal beliefs that have built up over the years.
How do you engage the line of business and other leaders? Evolving to an external facing brand architecture is a process. It not only requires audience research, but also leadership team involvement so everyone understands their role in how the company speaks outwardly. Today, when companies have many different lines of business and products and services, it becomes imperative for the key stakeholders to work together to arrive at a brand architecture that serves both their individual need, but more importantly the corporate vision.
Where we have seen the most resistance is in situations where the broad leadership is not deeply involved. Because how a company portrays itself is so critical to the future, developing a strong, outward-facing brand architecture is a strategic mandate. Get the leadership involved and keep them involved.
Who should manage the process? Development of brand architecture is a strategic initiative and should be managed by the most senior corporate leader who can rise above line-of-business interests. In some cases it is the CEO, but more often it is the Chief Strategy Officer or Chief Marketing Officer. Among other values, strong brand architectures usually signal a new future while creating clarity. Thus, if a specific line-of-business leader is tasked with the initiative, the solution often becomes weighted in favor of that business unit, and not reflective of where the long-term business is headed.
Brand architecture can be a powerful tool to help a company accelerate its growth. Investing the time and effort to optimize a company’s brand architecture can deliver higher near and long-term revenues and profits.
For deeper insights, contact:
John K. Grace
President & Managing Partner
April 26, 2018 Comments Off on Why Brand Architecture is a Critical Strategic Imperative
Significant changes in the outsourcing industry in the past few years mean that outsourcing companies must re-evaluate their branding if they want to succeed in the new environment. These changes are the result of many converging dynamics. Understanding the nature of what is changing can help companies reposition themselves for growth and greater profitability.
The good news is that the continuing growth of the global BPO and IT services market makes it look attractive to new entrants. Current industry projections suggest a global market size of over US$900 billion. Unfortunately, this creates a wide and more confusing playing field.
Despite a languishing global economy, several reports and studies from different BPO sectors project a continuing growth rate of 4-6 per cent, possibly increasing further as the economy stabilises. But growth creates a new set of challenges.
Convergence of factors has caused the problem
The irony is that category growth puts new burdens on providers to stay competitive in a dynamic marketplace. Several issues form a foundation for new brand thinking.
• Price shopping. One of the unfortunate fallouts of the global recession is an emphasis on low cost, which has in turn resulted in an increase in price shopping, with buyers driving to the absolute lowest prices from providers. This isn’t unexpected, but with new competitors entering the market, low price bidding becomes an even tougher hurdle. The implication of this trend is for brands to communicate their unique value in new and compelling ways.
• Providing greater value. Further, while price is a more important decision driver, buyers are, at the same time, looking for more than tactical support and are leaning on providers to bring new services and solutions to the table while keeping process costs low. Naturally all providers are looking to find a competitive edge so it is more critical than ever for providers to position themselves with clarity to differentiate, ensure understanding and secure engagement.
• Shifting labour costs. The past decade has seen a continuous shifting of global labour costs, so that some regions and countries that were once attractive sources of labour are less so today. Among other things, advances in technology have enabled new regions to be competitive. This has led to new perspectives about onshoring and rural shoring as viable alternatives, and keeps buyers up at night hoping that their outsourcing partner can satisfactorily meet their business needs. This is where the brand can act as an assurance of quality and service.
• Increased scepticism and need for transparency. One of the negative fall-outs of the global meltdown, lead by the financial services industry, is an increase in scepticism in what providers promise. This manifests itself in many different ways, one being the need for increased transparency and openness. Buyers approach relationships very differently post-recession, and this places a burden on providers to develop and sustain these relationships in new ways. Brand can be the beacon to show how open and transparent your company is in the new environment.
A consequence of these intersecting dynamics is that outsourcing companies must develop very strong brands to differentiate, attract new business and garner higher prices than competitors. This is easy to say, but requires some rigorous work to get there. What follows are the key elements necessary to define and strengthen an outsourcing company brand in the new environment we face today.
Keys to creating and shaping a unique and compelling brand
1. Create a unique and compelling brand idea that is different from your competitors. Stand apart. Spend the time and energy to really uncover why your company is different and better, and then make it part of how you communicate, what you communicate, and how you shape customer relationships.
2. Build the brand outwards from the DNA and culture of the company. This should be the foundational starting point. Unlike decades ago when a company could shout something and customers would line up, today strong brands have to be built upon the foundation of a company’s culture and DNA to have any resonance at all. Every organisation has an internal ethos that guides decision-making, service philosophy, and general behaviour. The most important starting point in building a brand is to uncover this unique character, and build it into the final brand idea.
3. Express the brand idea in unique language that telegraphs, in a nutshell, what your company is, what it believes and the value it provides. In most engagements we begin, our clients are often using generic words as tag lines or primary marketing messages that could be used by anyone. Here are some expressions being used in the outsourcing industry today:
“Innovative Solutions. Exceptional Service.”
“Shifting the Sourcing Equation”
“Extending Your Enterprise”
“Ready for Real Business”
“Helping Business… Process.”
“Leading the Process”
“New Ideas. More Value.”
“Love the Way You Work”
“Passion for Building Stronger Businesses”
“Premier Technology Services Partner”
These types of generic messages create a real opportunity for an outsourcing company to really focus on what makes it special, and then find a compelling expression embodied in a short number of words that can be used as a primary marketing message. Strong marketers find different ways to express the underlying idea so it telegraphs a lot about the organisation and does much of the heavy lifting to create understanding and engagement.
4. Be open and transparent in your communications. The events of the past five years have driven customers and consumers to be very sceptical of messaging. Thus, smart business leaders now understand that they need to become more transparent in all communications. By being more open and candid, companies are able to establish stronger bonds with their customers. In branding terms, a company needs a “brand voice” that is honest and true to how it behaves and conducts business
5. Use brand architecture to make your products and services very easy to understand. One of the front lines in creating customer engagement is to make your business clear and easy to understand. That means developing a brand architecture that is built from the “outside-in”. In many cases, this mean reorganising how you communicate what products and services you provide from the customer’s perspective. In that manner, new customers will understand you better, and be willing to engage further in building a relationship. This may sound surprising, but all too often, outsourcing companies presume that customers understand them. Not only can this be false, but in a highly competitive marketplace, clarity is an essential tool to secure new and expand existing relationships.
Developing and building a strong brand does not happen overnight. Identifying the need for it is the first step…one that can no longer be ignored in the evolving complexity of the outsourcing marketplace.
This article appeared in Outsource Magazine http://outsourcemagazine.co.uk/
April 24, 2013 Comments Off on Branding Tactics for Outsourcing Companies to Accelerate Growth
The outsourcing industry has become highly competitive with many new entrants. It has also become highly commoditized. Purchase decisions are predominantly driven by price, recently fueled by pressures of the struggling global economy. Branding, which is often overlooked in the outsourcing industry, is a very helpful tool to break through the clutter and elevate a company away from commodity price comparisons. In addition, a strong brand can help secure new customers, grow the business franchise, and improve margins.
Buyers of outsourced services today expect more than tactical support and inexpensive labor. Today, companies look at outsourcing as a strategic imperative to grow on a national and global scale. So providers must address the customer’s needs in unique new ways. Said another way, a strong “brand” can help communicate a unique value-added aspect of a business and generate great interest.
Outsourcing has grown rapidly over the past decade and continues on an upward trajectory. HfS research estimates that the total market size will exceed $950 Billion in 2013. Traditionalists break it down between IT Services and general BPO services. The sheer scale has attracted many providers who claim anything and everything, muddying the waters for the legitimate companies that provide excellent solutions for their customers. The result is a complex melting pot of companies providing off-shoring, in-shoring and even rural-shoring. And because the traditional markets that have historically provided very inexpensive labor are changing, there is the added pressure for buyers to understand the implications, and find value-added partners to deliver services in new and different ways.
March 21, 2013 Comments Off on Branding Can Differentiate an Outsourcing Company to Grow Business and Profits