Do Brand Extensions work?

“I will leverage my brand’s success by extending it to additional products/services.”

Sounds logical? Not necessarily. Don’t jump in before looking at the facts.

When your organization becomes successful and is experiencing rapid growth, you may be blinded to what future problems your branding choices may lead to. If you attempt to be all things to all people with one brand, it may lead to trouble down the road.

To Extend or Not to Extend…

On the surface, extending your brand’s equity without a divisional distinction may seem like a no-brainer approach to an expansion strategy. This type of brand extension is in fact, difficult to apply and manage. History shows that the industry leader in any category is the brand that is extended, with a comfortable distance built in. In other words, think of it like a family unit—closely knit is good—provided it’s not too close for comfort.

So why would organizations choose the ‘one brand’ style of brand extension or carry multiple brands that have no obvious connection, despite overwhelming evidence that neither approach works in the long run? The most common reasons include either the pressure to produce quick results with little effort, or it may be a lack of objectivity resulting from a familiarity with their original brand, or they just may not see any downside.

For a long-term sustainable brand strategy, the more products/services, markets/alliances used for one brand, the less valued the brand becomes. Also, the more separate brands an organization carries, the more complex and costly their marketing program will become. Increase the odds for a successful branding strategy by applying a distinct adaptation of your umbrella brand that ties all other brands together as a family. But like a family, remember to build in enough space to keep everyone happy.