I am starting to wonder if the dominant strategy for technology companies–a unified brand around the company with less emphasis on product specific brandning–is the right one. I’d love to hear your thoughts on this and your interest in Gartner possibly digging deeper into this topic.
Here is what is driving my thinking.
For the past several months, the topic of Future of IT Sales has been on the forefront of the research agenda for the Tech Go-to-Market team that I am on. One of the key findings of that research was what we call The Seller’s Dilemma—where the pressure of meeting quarterly numbers restricts the ability of Sales Leaders to evolve their sales models to better serve changing customer needs.
I also spend a lot of my time working on helping technology companies positiion their companies, products, and services. Positioning is largely about grabbing a place in the buyer’s mind where they “store” what they know about you. If you can get them to do that, then your memorability to them dramatically increases.
What does all this have to do with branding?
In general, there are just a few branding strategies. The choices is largely build brands at a company level or at a product level. When I think of brands, I focus mostly on the brand promise, that is often defined in the positioning, that peopleuse to remember you.
In tech, the dominant strategy has been to focus on a unified branding strategy, built around the company. This approach has been followed primarily because of concerns about the cost of branding both a company and a product, particularly for startups–where the company is the product is the brand.
In this case, products are usually (hopefully) named with descriptive, rather than evocative naming approaches.
This strategy is the opposite of the most common approach in consumer goods, where product level branding dominates. And I think this might be creating problems for technology companies as they grow.
- Perception: When your company brand is associated with a lead product, all other products suffer. For example, SAP is still thought of as an ERP company. So innovations in cloud, mobile, CRM, etc. must first fight to expand or change the buyer’s perception of SAP, before they can even start to win the battle for share in those markets. In doing so, they might also weaken SAP’s association with ERP. At the same time, if a company like SAP wants to break free from the ERP association, it is harder to do since that is so ingrained in buyer’s minds.Now, SAP is starting to change things, keeping the SuccessFactors name and the Hybris name (and letting them operate largely on their own). I think this will help them.
- Buyer Expectations: New products and innovations often require a different sales approach. When branded under a unified model, the expectation is often that one rep can (or buyers think they should) cover all the products. When multiple people converge on a buyer all representing different parts of the same brand, buyers get confused and frustrated. This might be decreased under a different branding model. This might also help address the Seller’s Dilemma (if new sales models could be deployed under a strong product brand–that was not encumbered by restrictions or concerns about cannabalizing revenue for other product brands).
I am sure there are more issues, and would love to hear your thoughts on those, but these two were at the forefront for me.
Based on these issues, what is the alternative? My instinct is that its time for technology companies to move towards a more Proctor & Gamble like strategy.
1. Brand the company around a very broad concept, mission, and values – For example, “We are a company that excels at innovations that help companies improve their business operations faster than their competitors.” Now, if this was product positioning, I’d rip it to shreds, but in this model, establishing a broad vision for thecompany and then further defining the characteristics of your solutions and values (and staying true to that) would work. You also would spend less time building the company brand, focusing more on the products–letting their successes establish the focus of your company.
2. Brand products aggressively – Put most of the emphasis here, and don’t name the product the same as the company. Instead, for a startup, its the first instance of delivering on the corproate vision. Allow it to grow on its own. As new products are introduced, brand them in the same ways. Leverage the corporate umbrella for shared services, but evaluate sales and target market decisions independently—if you need a new sales force, do it.
3. Link product brands to market segments – You don’t need to brand every product differently. Instead, use your product brands to focus on specific market segments, target buyers, and areas of need. What SAP is doing with SuccessFactors (an HR brand) and Hybris (an eCommerce brand) could work. (Now they have also folded in other cloud applications under Successfactors (or the legacy SAP brand) and I suspect that association will slow those down (Would you buy CRM from Successfactors? Probably not without a lot of convincing). This linkage should also apply to selling. How many providers are struggling to shift their sales force’s focus from selling to IT to engaging with business buyers?
4. Consider new branding when disruptions occur – We continue to see huge disruptions driven by the Nexus of Forces (social, mobile, cloud, information). When new solutions are introduced for these areas, they often carry with them dramatically different licensing and consumption models. This impact is at the heart of the Seller’s dilemma. The answer may be introduce a new brand, with a new, independent sales force, rather than trying to get your existing sales teams to sell both old and new products.
What do you think? I know there are issues and challenges with some of the ideas that I’m proposing, but I would love your thoughts–whether agreeing with the ideas or disagreeing–or sharing other benefits or risks of these approaches. Is this an area you think merits deeper research?
Is your brand perception a boat anchor for future innovation?
(Final Note: I used SAP as my example here, since they seem to be adapting their branding approach with some of their new acquisitions. They are far from the only company that is dealing with these issues.)
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