Brand extension is also known as brand stretching. Perhaps your business sells a particular product or service. You’ve built a reputation in that category, but you’d like to add additional items and expand on what you already do.
Figuring out the right time to grow your brand isn’t an easy choice, but it’s an effective one. There are many ways of scaling up.
There are approximately 30.7 million small businesses in the United States as of 2019. While numbers may dwindle a bit in 2020 due to disruptions in operations, those that thrive are businesses that new ways to serve their communities and offer products people need and want.
Now is the perfect time to add to what you already sell and find those market gaps that need to be filled.
Stretching your brand benefits your business by making it more stable. If one sector of your sales goes south, you still have something else to fall back on. Perhaps it’s a new customer base you serve or a fresh way of doing business with current clients.
Anyone considering a brand extension this year should keep these key points in mind:
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1. Remember Your Mission
As you look for ways to expand your business, keep your core beliefs in mind. If you started your company to help young college students, they should remain your primary focus. Don’t suddenly try to help senior citizens with their issues.
You may have a more general cause in mind, such as giving back to the local community with every purchase. Your focus would then be on the products and how they serve this purpose. Never add a product or service that goes against your values as a person or brand. Profit isn’t everything.
2. Modify Your Retail Space
Your brick-and-mortar store should reflect your brand extension strategies. If you’re adding new products, highlight them in your display windows or at the front of the store.
E-commerce stores might utilize artificial intelligence (AI) to offer recommendations based on past buying behavior. The more personalized your suggestions, the more likely a consumer is to buy your offerings.
Think about what type of buyer personas you’ve created and how you can best expand on what you already sell to them. Consider if the new line has a chance at high profitability with better customer experience. Combining the two is retail gold.
3. Make Sure the Item Relates
Have you ever seen a company launch a brand extension that was a complete mismatch? AriZona Tea offers nacho cheese and chips trays, but the combination seems unusual. Since they already sell tea, a better brand extension might be a lemonade tea mix or different flavors of their current drinks.
If you’ve done market research proving your audience wants nachos and chips, then maybe the idea isn’t as odd of a brand stretch as it sounds. Survey your customers and make sure the business is available for whatever you want to add.
4. Keep Your Credibility
Building a positive brand image takes time and effort. When expanding your company, keep your reputation in mind and thoroughly test any new products before adding them to your stock. Any launch is sure to run into a few snafus, so have a plan for handling customer issues. Even lifelong customers may grow frustrated if an item doesn’t perform to expectations.
5. Work With Another Company
You can gain a lot of momentum by teaming up with another popular company. One example of an effective product combination might be adding a popular candy bar to a vanilla ice cream treat. Think about businesses in your area or ones you’ve worked with before. How might you team up to offer something new to both of your customers?
6. Invest in Market Research
Many successful brands have had a failed product launch. Just because you think customers will respond to a new creation doesn’t mean they will. Before you invest thousands into a fresh design and production, conduct research.
Today’s 3D printers allow you to create one-off prototypes and run them past current customers or study groups. Figure out what elements need tweaking and check if there is interest in your idea.
Talk to consumers when they come into your store or buy from you online. Ask them what else they’d like to see you offer. The best ideas often come from unsatisfied shoppers who can’t find an item they want. Think about what complaints you receive and how you might address them with a new product.
7. Build on the Product’s Reputation
What is your most successful product, and how can you build on the reputation you already have? If you’re known for offering the best flower arrangements in the county, can you expand into landscaping design? Show people what you’ve done with home interiors and floral design. Let them know you’ve added to your knowledge and are ready to do the same thing for their exteriors.
Using your past successes to advertise a new service or good does two things. First, it shows you can deliver results in a related area. Second, it reminds people what you already do well and may result in additional sales of the previous product. You essentially advertise both goods simultaneously, using the reputation of the first to gain traction.
Expanding your business model always comes with risk. Cash flow quickly becomes an issue for growing small businesses. Make sure your company is healthy enough to withstand a setback if the product doesn’t go over as planned.
Once you have a sufficient emergency fund and have done your research, it’s time to launch your brand extension and grow to new heights.
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