Just as every action sparks a reaction, I can clearly remember the moment that spurred our decision to add a new brand and expand our company. Or, perhaps I should say that we recognized the undeniable need for change, and adding a new brand was the ultimate solution.
In another instance, adding an additional service line was the right answer.
How might your need for change bring you to one of these conclusions? In my experience, there are some key points to consider.
• What are the synergies? Consider whether the new service or brand will complement your core business or detract from it.
• How well can you support it operationally/administratively? Carefully consider the additional time and manpower this new service would require.
• How will it impact the branding or industry positioning of your core business? This is where marketing comes into play and, in my opinion, can play a large part in determining whether you expand your existing service offering or add a new brand.
• What is the long-term viability of the service or brand — is it sustainable? Are you dealing with something that is hot today but could become a passing fad?
• Is there a market for the product or service? An amount of new R&D will be required.
• What will your point of differential be? Again, is it different enough to warrant a new brand or will it better serve as a complement to your current service offering?
• If acquiring a business, how does it fit culturally? If the addition may compromise your culture, you may want to reassess.
After years of explosive growth within our DUCTZ air duct cleaning franchise, we saw revenue begin to level off in specific markets, particularly when the recession hit. We identified a synergistic service in kitchen hood cleaning, which fit many criteria including technical expertise and administrative support.
However, adding the new service would present a challenge in positioning, as the customer base was exclusively commercial and geared toward fire prevention, whereas DUCTZ services commercial and residential focused on indoor air quality. We decided to launch HOODZ as a separate brand, giving franchisees the option to represent both brands. HOODZ actually lent itself to the existing marketing treatment of DUCTZ and, although complementary, it was different enough to warrant its own brand.
We revisited the DUCTZ service offerings to establish a comprehensive solution for our customers. Because a significant benefit of duct cleaning is improved indoor air quality, we sought other services that would do the same.
We found that, second to ductwork, carpet and upholstery cleaning greatly improves indoor air quality. Carpet cleaning alone is a competitive field so it wouldn’t have made sense to launch a new brand, plus we needed to establish a point of differentiation. As the nation’s largest indoor air quality company, we added the service as the DUCTZ Total Care offering, adopting the marketing position, “Improving indoor air quality from the ground up.”
Once you’ve gone through a similar checklist and process and identified parallels and strategic marketing initiatives, ask yourself one more thing, ‘Is it going to be strategic?’ In this case, I would define strategic as accomplishing at least one of the following: increasing your customer base, increasing value-added services to your existing customer base or increasing purchasing frequency from your existing customer base.
John Rotche is the president of Ann Arbor-based BELFOR Franchise Group Inc., a multiconcept franchise system. The company’s two franchise concepts, DUCTZ and HOODZ, center on the compliance and proper maintenance of commercial kitchen hoods and residential and commercial air duct, carpet and upholstery cleaning services. For more information, visit www.belforfranchisegroup.com.