Several years ago, brand strategists Pete Canalichio and Mark set out to develop a framework for brands that were looking to expand. Both were intrigued to know why some brands were able to successfully grow within and beyond the sector they started in, while others struggled or even declined when they attempted to expand their presence into new markets. The exploration led to the development of LASSO, a model for successful brand expansion.
Expand with care
Too many brand extension or expansion plans are reactive. Brands hit a certain scale and then look to diversify in order to fish in other waters, or else, their iconic products hit their use-by date and they start looking for ways to sweat their assets, or someone brings a brand back from the dead and looks to add product lines to what they hope is its revitalised equity.
Sadly, many of these diversifications are not strategic. And like all sequels to the original story, some will work but many will simply not live up to the original.
Simply attaching a brand to a catalogue of goods does not guarantee success. Diversification has to make the brand stronger, more relevant, more accessible – not just look to draw on the existing equity in order to broaden appeal. It’s very easy for a brand to spread itself too thin. Drift-netting for sales usually fails.
There has to be a strong brand connection
The LASSO model came about as a result of numerous interviews with senior executives at brands that had successfully expanded globally. These ranged from digital products to entertainment to beverages to media.
Along the way Pete and Mark discovered that while some forms of brand expansion, particularly licensing, are misunderstood and even looked down upon by many marketers as “merch-ing”, market adjacencies can play a significant role in enabling growth. But they also learned that when organisations attempted to broaden their brand through diversification to rescue a business in decline or, more importantly, if they attempted to license the brand into areas that fans didn’t see as connected in any way with what they believed the brand stood for, then problems quickly arose.
The most critical element for any successful brand expansion, particularly those looking to shift into new markets, is the “brand expansion point” – the basis from which the brand expands. If that single organising idea is real, distinctive and exciting, the brand can leverage that to take what it offers into a wide range of places. If it lacks strength, or if the basis for expansion is wrong, then the brand may find it much more difficult to introduce branded experiences that consumers welcome as a natural and intriguing extension of the brand they feel they know.
The five elements of the LASSO model
As they broke down the key elements that helped decide whether a brand was elastic enough to thrive in current, adjacent and even non-core markets, Pete and Mark identified five factors that helped predict successful brand expansion.
Together these formed the acronym LASSO:
Examines the flexibility that a brand has to move away from its core business into adjacent and even divergent markets. This often has to do with the idea that the brand owns in the minds of fans. For example, the Ferrari brand was able to expand from cars into rollercoasters because the brand expansion point for Ferrari – speed – translated well.
Looks at the degree to which the brand invites and receives intense and frequent interaction. Addictive brands provide their fans with ongoing rewards that consumers pursue with gusto. There are many different expressions of this of course – from loyalty programs through to technology that people have come to regard as indispensable. The level and intensity of interaction is important because brands that people come back to time and time again are more likely to attract consumers to the ‘next’ thing they are doing.
The third element of our brand expansion model examines the degree to which the brand can call on its narrative to engage consumers. If Addictive is about encouraging actions, the Storied element adds structure, belief and mythology to the brand. This not only adds credibility, it also heightens curiosity and therefore ‘stickability’. When people are engaged with a story and/or something with deep history, they are keen to stay on the journey. Often the Storied and Addictive elements work together – combining the next ‘must-have’ (action) with an ongoing storyline (context).
The brands that are able to expand most effectively, not surprisingly, are those that can engage widely. In other words, they have both the interest and the means to move beyond where they are based to engage a multi-national, multi-cultural audience. To do this, they need to have strong, globally recognisable branding, they need powerful and effective channels through which to distribute and they need to hit the market at a time when the appetite for what they represent is strong enough to incite and retain huge demand.
Most importantly, the brand has to feel right in every area it expands into. Critical mass depends on having a brand with such clearly defined qualities that it acquires multiple audiences for multiple activities in multiple countries. Think Lego. Not only does the brand have a powerful brand expansion point – “play” is an idea that every human understands – but the brand appeals to young and old, in many different forms, across so many countries.
You cannot expand a brand or an idea that is not yours to expand. At one level this is about obvious things like intellectual property, but at another, it’s about what your stakeholders and customers believe you own. In other words, if a brand is trying to take or keep ownership of an idea that no-one recognises as belonging to the brand, it will absolutely struggle to maintain credibility and traction. Equally, if the brand is challenged over what it owns, and either legally or ethically, comes to be seen as having no right to own the idea it lays claim to, then it may have problems in the longer term.
Four questions to ask before you expand
If expansion is something your brand team is considering, LASSO is a powerful tool for testing the strengths and potential of your current brand. But first, here’s four questions we suggest you ask:
- If you introduce this new line as part of your brand, what are you asking the consumer to believe?
- Is that a reasonable belief? Will it make sense for them? Does it extend and expand what they already believe about you?
- Will it intensify the loyalty that your customers have for the brand? Will it give them more reasons to engage with you – both through the products they know and the ones you are looking to introduce?
- Can you do this credibly? If you are looking to expand your brand into a different category, for example, why are they going to believe your story over the story they’re already hearing from other brands for whom that category is core business?
We can help you plan a successful brand expansion
LASSO can be a powerful tool for brands looking to expand or extend how they define their future. If you’re based in Australia or New Zealand and looking at where and how you can license your brand assets, or you want to successfully take your brand into new categories, LASSO will form a powerful framework for a strategic session with Audacity. If your brand is based in the United States or Europe, then contact Pete Canalichio. And read his best-selling book Expand, Grow, Thrive which brings the model alive with examples and insights.