Building brand architecture that works for your business

Brand architecture is a formal structure, that helps a company to present its offering. Not to be confused with company organisation, brand architecture is a business best practice, that allows customers to understand what your business offers, helps them to engage and navigate its range.

It’s an essential best practice, employed by conglomerates such as Google, Telenor and Unilever, and for companies the size of Mission. Any company that has worked hard to build a competitive range of products, services or brands, provides choice. With more choice comes complexity - the enemy of every customer experience.

Brand architecture works on the principle of strategic simplification. From a financial perspective, it can save time, money and resources, by streamlining the time it takes to manage several offerings. It can highlight synergies between offerings. Defining a value chain that helps customers see the wider benefits of engaging with your brand, encouraging them to buy more, whilst building loyalty.

Many businesses only see brand architecture as a benefit to customers, but it goes far beyond sales. As investors seek alternative metrics to verify a company’s value, they look to the portfolio on offer, to judge how robust a business is to compete, in the short and long term.

A well organised offering demonstrates your position and authority in a market. Something that a talented recruit will take into account, as they consider your business as an option, that could provide them with more than a job, but an opportunity to grow and build a career.

Brand architecture is a strategic best practice, employed by thousands of leading businesses across the world. But it can be looked upon as a bit of a dark art. There is no quick-fix, every framework is as unique as the company it represents and there are many hybrid systems that can confuse.

In this white paper, we will dig deeper into the principles, covering further benefits that come with strong brand architecture. We will present the various types of organisational structures, to help you determine which may be right for you. And we will describe a five-step process, to help you navigate the complex decisions involved in building a brand architecture that’s right for you.

A classic brand architecture challenge

Recently a client approached us with a concern. As they saw it, their offer was clear to the market, business opportunities were in abundance, and yet customers still hesitated to push the button. The feedback often reported that the fit wasn’t right, they lacked the services required, or that the customer simply struggled to wrap their head around the company. This was naturally frustrating, resources were being wasted and business was lost.

On paper the client had everything going for them, and should be reaping the rewards of a well-developed business. The oversight was their offering. Success had led to success, and they had grown mainly through acquisitions. Within the company leadership believed their offer was unbeatable. However, the range of services hadn’t been organised in cohesive structure that demonstrated the range, quality and value to the customer.

Instead, divisions were allowed to manage their own communication. A range of brand names existed without any connection to each other. Internally cultural differences prevailed, with rivalry prevailing against opposite numbers. All this was reflected in a chaotic website, that was difficult to navigate. In short, the leadership had done a great job, in assembling the appropriate services to compete. But they hadn’t done enough to build synergy between them, and help customers to understand the value available to them.

This is a classic brand architecture challenge, and one we frequently see in strong businesses with fast growth. Brand architecture, is a clearly defined structure of services or products, that helps people understand what you have to offer. It shouldn’t be mistaken with company structure. And it isn’t simply structure to make things tidy. There is a strong strategic element to brand architecture, that can accentuate strengths, sidestep weaknesses, and help you cross-promote services to achieve long-term business benefits.

On Steve Jobs’ notorious return to Apple, he cut out 70% of their hardware and software. The range had become too flabby, providing confusing nuances between products. He described the new offering by simply drawing a four-square grid, two for consumer desktops and portables, and the other two for their professional equivalents. The origins of this structure can be felt twenty years later. Apple’s offer remains clear, intuitive and helpful in comparison to other computer companies. The underlying role that brand architecture plays in the popularity of the brand can’t be ignored.

Unfortunately, many leaders only think about their offering during times of radical change, such as mergers, acquisitions, rebrands or the launch of a new product. Whilst monthly attention is unnecessary, it’s wise to take a brand health check from time to time, to see if you match customer’s expectations, and that you remain competitive.

A review of your portfolio of products and services could reveal that you:

• Have a weak link in your value chain that needs to be improved

• Have an offering which has become expected and needs an edge

• Your low performing brands taint the offering and need reviving or removing

• Have opportunities to affirm your position and create communication accordingly

• Are close to confusing the customer with the breadth of the offer

• That you are not exploiting your value-chain to retain, and cross-sell to customers.

Nine benefits of brand architecture

Brand architecture isn’t just for multinational conglomerates such as Unilever. If you have three or more products or services, you have a choice and therefore an offering. As such, you owe it to your business and your customers to clarify the value of each individual service, and the collective value they bring. Here are some of the general benefits good brand architecture provides.

1. Become more organised

Brand architecture’s main focus is to provide a clear structure, with crisp clear differences between each product or service. With a structure in place, you become more focused on the value you create, resources can be applied accordingly, and staff know where to dedicate their efforts in the scheme of things. Removing any cause for confusion conveys a well-run business.

2. Become more targeted

When brand architecture is done well, it provides a clean contrast between the various offerings you provide. In effect, the offer becomes segmented, allowing you to be more targeted towards the end user. At the same time, the customer can easily survey your offer and zoom in on the specific offer that is right for them, creating a more positive customer experience.

3. Optimise funding

When a portfolio is organised, and recognised as a group of valuable components, instead of a jumble of parts, it gives you a clearer perspective. This allows you to head-off spontaneous demands for funding. The offer becomes the focus, allowing you to target funding where it’s most needed

4. Reduce costs

Some brands adopt a master brand strategy (see below), which means that all their products and services are represented by one, single brand, instead of several. This avoids the multiplication of effort across several brands, saving time and money on staffing, managing and promoting several brands at once.

5. Define synergies

Businesses are complex ecosystems. It pays to define the synergies between companies, divisions, departments and brands. When everyone knows their role, they can work together towards a common goal, avoiding duplication of effort and in fighting. It also highlights cross-selling opportunities, providing the foundation for a value-chain, helping you offer more to the committed customer.

6. Reassure investors

Businesses are complex ecosystems. It pays to define the synergies between companies, divisions, departments and brands. When everyone knows their role, they can work together towards a common goal, avoiding duplication of effort and in fighting. It also highlights cross-selling opportunities, providing the foundation for a value-chain, helping you offer more to the committed customer.

7. Distinguish your position

In an increasingly complex world, nothing is more appreciated than clarity. A brand that clearly defines what has to offer will stand out, and gain loyalty by helping customers understand what they are buying into.

8. Facilitate growth

With a clearly organised brand structure you avoid short-term thinking that can paint you into a corner. Instead, the overview allows you to identify areas where you can expand the offer, adding new and exciting additions. Or equally, edit out redundant offers, without polluting the whole range.

9. Affirm your value

A well organised offer, communicated clearly, to all stakeholders, will distinguish you as a strong player and confirm your authority on the various markets you compete. Ultimately helping your brand to become a valuable business asset

The three archetypes of brand architecture

As a rule, there is no “fix-all” solution for brand architecture. Every structure is unique and tailor-made, to the requirements of each individual business. However, there are three main structures, that can be considered as a starting point. In many instances, companies combine these principles into a hybrid structure, that suits their own specific business ambitions.

1. Master brand

Sometimes referred to as monolithic or corporate brand architecture. This system is utilised when the organisation has extremely strong brand equity amongst all stakeholders. In this scenario, the company has grown by adding distinct divisions or products, but the target audiences are ultimately loyal and respectful of the brand behind them. This system is becoming increasingly popular, as businesses see the benefit of streamlining their offer, and removing the costs of supporting multiple brands. But the efficacy of this system depends on a strong corporate brand and religious consistency across the range.

Typical examples of master brand architecture are:

BMW . It's the brand that fronts all 7 series of cars, including the X and i series, and dealerships throughout the world.
IBM . In the past they’ve used various brands e.g. ThinkPad, but now primarily uses descriptors such as Analytics, Cloud Computing, Cognitive etc. to define their services.
Telenor. With the exception of some subsidiaries e.g. Canal Digital, Telenor is a master brand throughout Scandinavia, Eastern Europe and Asia.

2. Endorsed brand

An endorsed structure is adopted, when both the organisation and its divisions have a strong market presence. A mutual benefit exists between each party, that can be exploited in different ways. For instance, this scenario often occurs when a company has grown through acquisition, often paying large sums for brands with strong equity. The parent company will link its name to the brand, therefore enjoying greater exposure and signalling to investors that they are behind the brand. Whilst the brand itself is free to communicate to its customer base.

It is also used as an intermediate option during the M&A process, as one brand migrates over to another. This can be seen as a signature under the logo or part of a voice-over. Maybe you remember when CNN was announced as a “TimeWarner Company.”

Typical examples of endorsed brand architecture are:

Virgin . The virgin name is part and parcel of several brands e.g. Virgin Holidays, Virgin Mobile, Virgin Atlantic and Virgin Galactic to name a few.
GE . This is a conglomerate that has widely diversified but always uses the GE prefix, for example: GE Aviation, GE Healthcare, GE Capital, GE Digital etc.
Apple . The Mac, iPhone, and Apple Watch are all different naming systems, but are invariably endorsed by the Apple parent brand.

3. Stand-alone brand

Sometimes referred to as Pluralistic or a House of brands, this framework is usually implemented, by a range of brands that are distinct and often unrelated. The organisation behind them is for the most part unknown to the customer but will be known to investors. These organisations have typically grown their portfolio through strategic acquisitions, allowing the strong brands they own to communicate freely to their loyal customer base.

Typical examples of organisations using stand-alone brand architecture are:

Kering . TThe luxury group behind Gucci, Saint Laurent, Stella McCartney and Balenciaga.
Alphabet . This is the recently created company to oversee the Google, YouTube, Android and Nest brands.
Orkla . The holding company behind Big One, Stabburet, Nidar, Blenda, Solidox to name but a few.

Five steps to build a strong brand architecture

Brand architecture can be a complicated process. It only works when everybody involved respects the outcome from the organisations point of view, and the brand point of view equally. Strong brand architecture is a balance of simplicity and flexibility, which can be two dynamically opposed principles.

Consistency is key, and yet the demand for concessions for the divisions or brands, will be frequent. Many organisations that grow through acquisitions, don’t declare their strategic intention for the brands they purchase up-front. The former owners often have an emotional attachment to what they’ve created, and find it hard to watch their “baby” become swallowed up by the system. This can lead to key-people leaving soon after the deal is concluded, undermining the value of the purchase.

Compromises will be a natural part of the process. Typically, what is good for the organisation, will not always be good for the brand and vice-versa. Ultimately any system of brand architecture, must serve the overall strategic ambitions of the business, which are always evolving. Here are five steps towards establishing the kind of structure, that will meet your goals:

1. Take a step back

It makes sense to create a decision group, chosen from the organisation and divisions, or brands within the business. All must be aware of the overall strategic ambitions, and contribute with detail from their own area of expertise. The process should be driven by external brand consultants, who bring impartiality and can present the hard proposals, without incurring friction.

The first step is to conduct an audit of the current situation, to evaluate the strengths and weaknesses in play, and benchmark this against final proposals. Remember, everything is connected, so be sure to include the full range of brands, divisions and services involved, to ensure there are no loose ends. Brand architecture is often like a house of cards, if any option is left out, it can bring the final solution crashing down.

At this point it’s essential to understand the bigger picture, and see how things are interconnected. Don’t just consider the brands, think about how each brand creates value for the end user. Define the categories you operate within, and the role the brand fulfils. Take into account the accumulative value, all the brands create for your customer base. Finally, try to identify the synergies across the portfolio, to establish complimentary value and any cross-selling opportunities.

Looking at the bigger picture, will help to identify any hot points to confront, and help you leverage any hidden opportunities.

2. Anticipate the future

Once a brand architecture in place, it has to last. By thinking about the future, considering trends and how the business landscape might evolve, you can plan for the future. This is particularly important in a time where conscious disruption is a prevalent business strategy.

Take into account the strategic vision of the organisation. How does the company plan to grow? What will be the key drivers for the organisation, divisions and brands? Explore these options and other scenarios to test the flexibility of the brand architecture proposals.

The final brand structure should help the organisation to move forward, whilst leaving enough flexibility to evolve, add or, subtract brands within the portfolio.

3. Consider your stakeholders

Understandably many organisations when considering their brand architecture view things from a customer perspective. Brand architecture should after all, make the brand more appealing and easy to engage with. However, the discipline is evolving, and for some brands investors and employees are becoming equally important stakeholde.

When developing your framework, consider the structure and hierarchy from the needs of staff. Does it portray a business they want to work for? Is there clear delineation between their roles? Does it avoid overlap, that could lead to internal competition? How will they work to create the desired customer experience?

In a buoyant market investors aren’t lacking in opportunities. The easier you can make it for them to understand your offer the better, it conveys high standard business practice. Investors will also take a long-term perspective and look across your offering, to see how it creates sustained value, and how it could adapt to forthcoming challenges or opportunities.

For bigger brands, stakeholders stretch as far as key partnerships, opinion formers, government and media. So any brand architecture proposal, should be screened to meet these constituents as well.

4. Create a flexible framework

This sounds like a paradox. How can you be flexible and have boundaries? But bear with me, the digital age has been the catalyst for rapid growth. Businesses need to lead with innovation, or jump when the market demand materialises. Where merely a generation ago, building a company was seen as a life’s work, now they are formed with a short-term outlook, with a nothing ventured nothing gained attitude. This demands that brand architecture has a degree of flexibility to it, allowing for areas for growth, and areas for failure, without disrupting the complete structure.

Also, unexpected reasons to change will occur; this is why it’s important to anticipate future scenarios, as mentioned in point two above. It’s wise to create a formal system of stewardship for your brand architecture, so that divisions, or brands, can’t make dramatic changes without approval. At the same time, facilitate for a formal application to make changes, so that managers feel they can take advantage of opportunity when it arises.

By reviewing your situation at least once a year, and introducing a formal stewardship program, you will always maintain a flexible system that works for the organisation, and the brands it supports.

5. Engage staff to build value

Many companies make the mistake of seeing brand architecture as a formality, something static, but it’s more than that. Brand architecture speaks to the best practices of the business. A company with strong architecture, will resonate with staff and potential recruits as a place that is ambitious, one which anticipates the future, and is well organised to take capitalise on opportunity.

When the brand architecture is implemented, ensure that any migration across divisions, is managed smoothly. Document the brand architecture and its reasoning into the brand guidelines, ensuring any naming systems and hierarchy is clearly described. Use the brand architecture to indoctrinate recruits in their on- boarding period, to give them a perspective of the company they are joining. Raising brand architecture’s prominence as a business asset, will help staff to see its benefits and build on it.

Your name (or names), are your reputation, so it pays to ensure that all your stakeholders can understand and engage with your offering. By investing in brand architecture, you will capitalise on all the hard work it took to build your portfolio.