Let’s assume you are trying to expand your product line or improve your service delivery model.
How much change should you attempt?
As context for that question, here’s an excerpt from my book, The Zappos Experience
Brand positioning experts will tell you that every company is given “permission” by consumers as to how far they can stretch their product and service offerings. For example, in the 1990s, Clorox was considering taking its well-established bleach brand and extending it in the direction of laundry detergent, dishwashing soap, and other household cleaning applications. Consumer research, however, showed that Clorox equaled bleach in the minds of the buying public and that consumers would be hesitant to buy any Clorox product that would touch their hands or dishes. As such, Clorox focused its brand extension in the direction of toilet bowl cleaners, tub & tile products, and drain openers,
Like Clorox, the early brand positioning of Zappos put it at risk of being denied permission to grow outside of a shoebox. However, a broad vision of the future, careful listening for “permission,” opportunities provided by customers, and an increasing level of consumer trust allowed the brand to “stretch” into clothing and even corporate training services.
Here are four lessons on brand extensions that emerge from the Clorox and Zappos examples:
1) Study Consumer Perceptions.
Notice that I used the term “consumer” as opposed to customer. While it’s essential to know what your existing customers think of you, you’ll also want to track brand perceptions from those who may be considering you and from those who haven’t placed your brand into consideration. If Clorox hadn’t done that type of brand tracking, they would have attempted to expand in a direction that customers would not accept.
2) Stretch into Adjacencies.
Start by making brand expansions into areas adjacent to your existing products or services. Clorox’s extension into related cleaning products like toilet bowl cleaners and drain openers proved successful because it was congruent with their established brand. Similarly, Zappos’ move into online clothing sales leveraged the strength of the company’s online shoe business. While working with and writing about Airbnb in my book The Airbnb Way, I chronicled how Airbnb evolved from being a short-term accommodations platform to one that offers hosted experiences as a logical extension and enhancement to global travel.
3) Test and Learn the Boundaries of Customer Permission.
While consumer data is likely to offer insights into the limits of your brand’s elasticity (e.g., products or experiential offerings that will be rejected by consumers), that data can’t answer the question, “Will customers engage my brand extensions?” To drive engagement and purchases, brands like Zappos, Clorox, and Airbnb deploy agile design and “test and learn” strategies to optimally position new products and experiences.
4) Build and Leverage Brand Trust.
While working with and writing about Starbucks, then-CEO Howard Schultz frequently said, “We need to make steady deposits in the reservoir of trust.” In keeping with Howard’s observation, trustworthy and ethical actions by leaders instill customer confidence and increase a customer’s willingness to explore new products and services from those brands that have earned their trust.
Let’s bring these lessons back to you.
Where is your brand not permitted to go?
What brand extensions would your customers welcome from you?
What new customer experiences might you test? and
How are you making “deposits in the reservoir” of customer trust?
To learn more about executing well-received brand extensions, please contact me at josephmichelli.com/contact.
