Not written by an AI. Not even a little bit.
Written by Robert Leinders-Krog.
This post is not about the different types of architectures, but how b2b brand architecture “management” can lead to portfolio growth, shareholder value, and overall brand equity – if done right.
WIKI: Brand architecture is the structure of brands within an organizational entity. It is the way brands within a company‘s portfolio are related to, and differentiated from, one another.
Fundamentally, if you have a brand, you have a brand architecture. Your brand may sell only one product, without any further levels or descriptors, or differences in product packaging or software bundles, yet, you will have to manage and decide how your brand is perceived in your audience, and how it relates to the core offering of the company, now and in the future.
More obvious, once you enter multiple product or service verticals, you are dealing with some critical architectural decisions. This is when your brand strategy needs to be pointing your firm in the right direction, as you will have to define and understand how you want the products or solutions to elevate and relate to your brand or brands.
After having worked with a multitude of global corporates, scaleups and small tech outfits, we have found that there are three stereotypes of brand architectures that companies gather around. And mostly, these gatherings are not necessarily strategic, but mostly based on legacy decisions, organic growth, M&A, or simply leadership having a gut feeling about something a decade or so ago. Anyway, if you are in any of these three categories, you might want to reconsider if your strategy and brand architecture truly furthers growth. Or if it should be adapted, modernized and more focused on what your brand is all about – today.
You are managing a strong and powerful brand. Globally acclaimed and loved. Every stakeholder knows your brand and identifies with its power and services. At least, that is what you think. Or what your board tells you.
You are managing your portfolio from the top down, only adding product streams or new verticals by descriptor, never creating new names, or new brands, as this would be against your signed-off masterbrand strategy. You also have employed a brand police, often a complete “marcom” department guarding the masterbrand strategy, arresting local marketeers and sales agents for not placing the logo correctly, judging engineers that call their project by something as crazy as.. a name.
This is a very rigid, very clear way of managing a portfolio, that has all the potentials of working well, if it’s execution is based on facts, market movement, customer perception, and the actual categories the masterbrand is operating in. In some cases, this rigidness can lead to some simplicity, and easier management of assets, as everyone is forced into a strategic, single focus system.
However, a rigid masterbrand strategy only works, if leadership continuously measures the brand’s equity, and understands the flexibility needed for addressing new markets, new competitors, or paradigm shifts in consumer behaviour.
A masterbrand inside a set category may have trouble entering and winning a completely different category or market – regardless if they are the best in the world at it. Just as a world class tennis player doesn’t suddenly show up at a motorcycle race, you may have to consider if any of your strategic actions and diversifications require a re-assessment of your original strategy.
→ Running a masterbrand strategy is one of the most strategically complex operations in branding, as it constantly requires evaluation and analysis, demands focus, and has a tendency to create complacency across the brand’s advocates, which in turn develops into costly, inefficient branding activities and unclear positioning.
You have a company. Maybe SaaS or products, or a little bit of both. You are running a multitude of brands inside your portfolio. Sometimes you may have a focus brand, which some of your peers may call a masterbrand – like the one you have as your email address. You run your branding democratically, focusing your efforts on the brand or brands that drive revenue, or that are least complex. You may also put most of your force behind your “masterbrand” endorsing your “other” masterbrand. Regardless of how you run it, this organization is identified by having decidedly more than one logo, more than one name, and definitely, more than two verticals inside its operation.
Now, how did you end up here? With a multitude of logos, products and services, clearly addressing their specific use-cases and markets. You are handling at least three to four brand guides, and as many brand owners or coordinators. Of course, if you are a large retailer, with hundreds of brands, this article is not for you. This is for you, the B2B player, with B2B customers, and, you guessed it, a few too many brands to handle.
Again, this can work, yet, needs to be based on a razor sharp portfolio strategy. If you decide to create a multitude of brands, they all need to be managed, positioned, grown, and they all should have a positive business impact – and not be a cost center. Deciding on what to focus on and how can be as gruelling as finding that needle in the haystack. Your board needs to agree (and be convinced) that brand A should be prioritized over B, yet C should be focused on in Q4.
Driving multiple brands at the same time can be used to fight different types of competition, diversify your offering in different markets and categories, and take a clear position for every vertical you chose to brand. Doing this, means sacrificing the equity that comes from single focus vehicles (read, the masterbrand huddle) where everything is geared to grow that one entity, and diversify your efforts, marketing spent, creative power, and – leadership.
→ This strategy can deliver both short term and long term gains inside your verticals, and brand leaders have to decide if these brands should be held together by some sort of a background “group” brand, or if they can live their lives and individual powers.
Making this strategy work requires less of a brand police force, but more of individual brand managers and teams, and crystal clear strategies. Also, in doing so, one should look at the relationships these brands have, and how they can enable each others growth.
As a conclusive thought, multiple brands inside a b2b portfolio work best if they are inside a relatable category, say an ocean player has shipping, underwater robotics, propeller maintenance and fishing technology offerings, more so than a car company offering cars and solar powered refrigerators.
We are back at the corporate end of the stick. Specifically industrial environments being forced to enter a path of becoming a “technology company”. Yet also new SaaS companies sometimes fall into the trap of mixing all existing brand strategies inside of one company. Imagine running a corporate brand, that is based on a masterbrand, but not really adapting its strategy 100%. You are an official subsidiary of something bigger than you, and you are to bring that equity towards your own branding efforts.
However, you live off smart M&A, product development and innovative deployment of engineered products or solutions that should preferably beat the competition by both timing and quality.
This ends up in a race against time and strategy, where brand advocacy and governance are suddenly driven bottom – up. A place where engineers create project names that turn into brands, and internal product descriptions that suddenly become boiler plates.
An organization like this is the most common one inside the brand architecture complexity. A place that looks like a tight shop until you check under the hood. Brands roam freely, project team t-shirts are printed, and product names are trademarked – daily.
This organization is inherently difficult to manage form a marketing and leadership perspective as these teams constantly struggle for control and efficiency. Communication is made tricky as the corporate brand keeps demanding adherence to its rules, all the while the commercial leadership of your division will drive towards more products, more names, and more verticals – simply to overcome the competition and to have tools in their toolbox that match or outcompete the other offerings in the market.
Sounds familiar? Mostly the organizations running an official masterbrand strategy can end up here, with a bit of an internal brand riot constantly firing up marketing and sales conflicts, and giving engineers creative branding power. The question is, what to do?
→ When you end up in a product brand jungle, no rules apply – it’s the jungle right? The fittest and strongest survive, meaning the ones with most top management endorsement, or most political clout will keep “their” brands.
This is a costly exercise and does not build equity over time. The only way out is to get a proper mandate for a cleanup, understand the facts, and start building a portfolio strategy that works for your specific organization.
This is hard, but of the three stereotypes, this is the only one that will hardly ever lead to success – neither long or short-term. Costs are simply too high, and the level of control far too low to build brand equity inside the portfolio.
The time where you could decide on your brand architecture and wait ten to 15 years until you revisit it are definitely over. We are living in an age where our verticals change with our customers, were technology and competition demand actions, and where time is not on our side. Ever.
Brand Managers must understand that architectures are living organisms that need evaluation, guidance and active management, depending on market movements and sentiments.
Not to say they need changing every week – a brand takes a lot of time to build – but being strategically aware, apply wit, and in-depth analytics of how your portfolio can best service your customers now and in the future will make a massive difference on your business performance.
And maximizing business performance is what strategic branding is all about, right?