The search for growth drives many firms to launch new brands while protecting older labels, creating sub-brands. However, many companies fail to achieve the desired results unless they get their strategy right.
In confectionery, for example, the number of brands has increased by more than 40 per cent, stated a report from McKinsey Group I read recently. However, the report noted that overall revenue and volume didn’t keep pace with the brand strategy.
Yet sub-branding works brilliantly for the likes of Coca-Cola and Apple, and our big banks are pursuing a reasonably productive multibrand strategy, too. Westpac’s business bank, for instance, operates under the Westpac, St. George, BankSA and Bank of Melbourne brands. Its wealth-management arm BT Financial Group pursues a multi-brand strategy, too.
So, if a multibrand strategy works for Australia’s oldest financial institution, will it work for your financial planning outfit? There isn’t a straightforward yes or no answer.
A central brand
One school of thought suggests that having a single brand is best. From a marketing perspective, this enables you to promote one name, one logo and one value proposition. Plenty of businesses have one brand, yet offer many different types of products and services. American multinational GE is a perfect example. It operates across many different industries but the GE brand is a constant rallying point, whether it’s on an aircraft engine or a halogen lightbulb.
One brand makes it easy for a client to form a relationship with your business because you are not diluting or confusing your message with multiple names, logos, colours and so on. From a marketing standpoint, it simply means you promote your specific messages relating to each of your core offerings according to your overall brand message, whether it’s estate planning, wealth protection or retirement planning.
Horses for courses
On the other hand, a sub-brand strategy can help you target different audiences. Qantas is a case in point. The iconic Flying Kangaroo is targeted at premium travellers, with multiple class levels and a wide range of services. Meanwhile, budget brand Jetstar offers low-cost fares, tight seating, and pay-for-view entertainment. One company, two distinct brands, for two distinct audiences.
This is the appeal of a sub-brand. If you have a diverse client base, it can be difficult to have one story that appeals to all. Sub-brands allow you to promote specific messages without tainting a message that’s attached to an affiliate brand.
In my book, there’s nothing wrong with a sub-brand approach. While it can change your overall business structure, logo and cost, it gives you the ability to be targeted in your approach to marketing. The target markets for Qantas and Jetstar are so distinct that it makes business sense to have them entirely separate in every way, other than code-sharing flights.
Which way to go?
As I wrote earlier, there is no right or wrong answer. For smaller financial planning firms, it’s usually best to stick with a single brand. Build it around your offering and make the brand about holistic advice and planning.
If you do decide to take a sub-brand approach, ensure it adds value. If it doesn’t provide some extra business, then you’re just adding cost and complexity to your marketing program.