We often mention in our posts that building a strong brand is crucial to growing a business, but expansion can also hurt your brand. The more customers you try to appeal to, the weaker the brand becomes.
Here are a few reasons for why this happens, and more importantly how to avoid it.
The Risk Of Being A Generalist
Expanding your products or services outside of your immediate area of expertise will create a perception that you are a generalist. For example, a restaurant that serves hamburgers, sandwiches, pizza, seafood, steak, and pasta is not specializing in any particular cuisine or region. You may have a fantastic chef that can deliver all these different dishes, but what message are you sending to the world? You and your brand are saying “we can do it all,” but customers think “they probably don’t make a great pasta” Why is this the case? Because specialists are always preferred to generalists; therefore, if a consumer is craving pasta, they will go to an Italian restaurant. If they are craving a hamburger, they will go to a place that is known for making hamburgers.
Perception Is Essential
A generalist may have a better quality product or service, but most buyers associate quality with specialists and not generalists; therefore, most of the time they will prefer a product or service from someone that specializes in the area of their need/want.
Let’s look at another example. MTV experienced phenomenal growth while they were specializing in music videos, but over the years they kept adding other (non-music) content to the point where most people are confused on what exactly MTV is and what they stand for – this is a prime example of how you can hurt your brand.
Don’t Confuse Your Customers
As was the case with MTV, introducing new products or services that are outside of your immediate area of expertise can quickly turn a great brand into a brand that doesn’t stand for anything.
Why does this happen? For the most part, because many growth strategies are short-sighted. In the race to grow, businesses try to capitalize on every money-making opportunity. In other words, they don’t know how to say no to customers that are outside of their core area of expertise.
Furthermore, in the race to increase market share many companies copy competitor’s offering and subsequently overextend their product/service range. Naturally, this weakens a brand because as was the case with MTV, the more people you try to appeal to the less appealing your brand becomes.
You Can Grow By Specializing
Let’s first address the myth that you have to expand (outside of your area of expertise) to grow your business. Let’s look at Apple as an example. When Steve Jobs returned to Apple in 1997, the company was struggling and on the verge of failure. Steve Jobs’ first point of action was to reduce the product line by 70% because in his absence Apple bloated into a brand that tried to be everything to everyone – venturing into video consoles, digital cameras, speakers, CD players, and so on. And at the same time, they tried to appeal to large organizations with enterprise-focused products.
In other words, Apple became a “Jack of all trades, master of none” – a generalist brand that most buyers had difficulty understanding. Steve Jobs fixed this issue by focusing Apple on four key products iMac, iBook, Macintosh, and the PowerBook. In essence, he made Apple (the brand) easy to understand again – Apple became a company that focused on consumer desktops and portables. The rest is history.
These days, many analysts are criticizing Apple for sitting on too much cash ($237.1 billion), and suggesting they buy some well know unicorns (privately held startup companies valued at over $1 billion). We think Apple learned their lesson, and what happens when they try to expand into areas outside of their core competency.
By appealing to too many buyers, you end up appealing to no-one. By over-stretching your brand (your service/product range), you will ultimately confuse your target customers and alienate your existing customers. Instead, find a niche market, specialize, and strive to become the leader in your niche category/market.