Growing Fast

Viewpoint by Andrew Pierce, Senior Partner

To grow, companies must find ways to innovate around their brands. More often than not, brand leaders are risk adverse—not willing to push the boundaries of brand permissions for fear of diluting or over-extending. Or, fail to go forward because they believe the NPV of investing in a new brand or sub-brand can never be as positive as investing in the master or core brand. This intense focus on financial returns dampens the desire to innovate or take risks to build a brand.

Brand innovation is a continuous process. Brand innovators continuously augment their product and service offerings to deepen customer loyalty and target new market opportunities. Consider Hanes' move, elegant in its simplicity, to print the tag on the back of T-shirts, boosting sales by double-digit percentages and growing the category by 8%. Or how Toyota's Prius responded to unmet consumer needs for a coolly designed hybrid car — one of various innovations that helped Toyota leapfrog Ford to become the world's number two automaker. Or how American Express successfully launched its OPEN sub-brand aimed at small business owners with a differentiated value proposition and brand strategy. Or how Marriott has developed branded value propositions to meet the unique needs of business and personal travelers.

Brands have a lifecycle — they need to be fed and nurtured like any other corporate asset. While brands are built over years and decades, they can be diluted or killed at a much faster rate. To address this concern, companies must constantly analyze the effectiveness of their brand portfolios, relevance of each brand, new market opportunities, and the core competencies required to deliver against any brand promise. Brand innovation must be relentlessly pursued over time, with each innovation building on the next to expand brand and business value.