Brand Category Creation: A Strategy for Success

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1 WHITE PAPER Brand Category Creation: A Strategy for Success by Paige Lansing Valle CONTACT Paige Lansing Valle Emotive Brand nd Street, Suite 245 Oakland, CA paigev@emotivebrand.com

2 Brand Category as a Frame of Reference A brand s category is the foundation of its positioning. It will determine the points of parity the brand has to meet in order to be considered a legitimate player, and highlight opportunities to differentiate. As such, your brand needs to fit into the framework of a brand category that people understand and relate to. As UC Berkeley Professor George Lakoff explains, a frame of reference is absolutely essential, get it wrong and your difference may be ignored: Framing provides a mental structure that shapes the way we see the world. If a strongly held frame doesn t fit the facts, the facts will be ignored. It s human nature to want to fit things into a category. And the more innovative and disruptive your offering is, the more it needs a frame that people can relate to. If your brand can t easily be defined, people often push it to the margins and leave it there. This is because its complexity is easier to ignore than to figure out. People hold on tightly to their established understandings of what a category is and what it offers. Choosing the right category is about defining, or framing, what people are buying in such a way that your value shines through. The goal is to identify the best category that will help your customers get your value and make it relevant to them, while putting your competitors at a disadvantage. When Your Brand Category Isn t Serving Your Brand If you are looking to grow your brand, make sure your brand category is truly the right one for the brand. Sometimes, the category you originally affiliated with is no longer serving your brand s needs. Here are some criteria we ve identified that indicate it might be time to break out of your current category. Your category is in crisis or has fallen out of favor. Your current category prevents your key differences from standing out as must haves. You are altering your strategic direction and your business model is shifting. You have created a significant innovation or proprietary advantage. Competition is stifling your ability to grow. You are ready to extend your brand beyond current customer segments. 2

3 Investing in a New Category Before creating a new category for your brand, consider whether your business has the resources and time available to define and brand the new category. Creating a new category can be transformational for your brand and business but it requires big ideas and a team of decision-makers who can, literally, think outside the box. Creating a new category requires an investment that may exceed your businessas-usual marketing budget. With that, comes more risk. It s inevitable that some new categories flop or are slow to show return on investment. Research has found that if done right, category creation is one of the most valuable things you can do for your business and your brand. Embarking on Category Creation: How to Define a New Category Look to the following steps to define your new brand category in the right way to drive your brand and business forward: RESEARCH AND ANALYZE: Have a deep understanding of the category dynamics in the current market. What direction is the market going? What s the threshold for change amongst your target audience? Track the dynamics of existing category labels to determine when a window of opportunity will open up for a new category and give your company the best shot at succeeding. Use data to understand how customers are categorizing emerging brands to fine-tune your new category development. Also look to your competition. How does your product or offering differ? Analyze your revenue models, and your customer s behavior: what language are they using to describe your business? What can SEO tell you? CREATE A VALUE PROPOSITION: Build out the framework for the new category with a strong value proposition and supporting messages so that it can be tested and validated. Doing this will help legitimize the need in the market to support a new category and simultaneously differentiate your brand based on your offering. Articulate 3

4 why the new category is better than the alternatives (i.e. why a smart phone is better than a mobile phone). A solid messaging platform that leads with the why the category matters and supports the promise with clear proof points will ensure that creating the new category is a worthwhile endeavor. ESTABLISH A BUDGET: Before getting too far down the road, make sure there s a budget in place for the work you re about to take on. Defining a new category also requires marketing the new category, which can be a drain on resources. However, it certainly doesn t have to break the bank. In fact, being able to make the most of a modest budget means you know how to be resourceful, creative, and think about things differently. Once you have a budget in place, the strategy of developing the category becomes easier to determine. CHOOSE A CATEGORY To strategically develop a category, you need to evaluate your business strategy, the competitive set, your own product roadmap, and where your industry is heading. Remember, to build groundswell around a new category, you ve got to give people a frame of reference. Until your brand is established as the dominant leader of the category, most people will be reluctant to try something new. It s human nature to play it safe. The more innovative and disruptive your offering is, the more it needs a frame that people can relate to. Naming a Brand Category: Harder Than It Sounds After building the strategy for your new brand category, the fun can now begin: creating the right category name. According to MIT Sloan Management Review, 200 categorical labels were introduced to describe the more than 1,500 now smart-phone devices that broke into the US market. As we know, most of those labels are never used today. Names that succeed tend to have patterns in common. BUILD OFF A FRAMEWORK: People need context to grab onto something new. The space your new category creates in the market paves the way for your innovative product to become the category leader. But that depends on the name being something that people understand without explanation. KEEP IT CLEAR AND RELATABLE: When developing a new category, it s tempting to come up with a catchy, quirky, or unique category name. Everyone wants to differentiate and make a mark. It can seem, understandably, that developing a category name that grabs attention will help your brand stand out too. But that s not the 4

5 case. Names that aren t recognizable create confusion and uncertainty for customers. When the category name isn t immediately clear, the brands and products it represents become muddied in those waters. FOCUS ON SIMPLICITY: When it s time to create your new category name, choose one that s simple and recognizable. There are a few ways to go about it: Two Known Words (i.e. Credit Card, Data Center) Compound Name (i.e. Automobile, Bicycle, Laptop): If your product is truly innovative with nothing on the market that compares the category name should be a riff off an existing product. In this case, using two known words or joining them into one would be ideal. Derive a New Word from an Existing Word (i.e. Browser, E-commerce): If your brand is joining a group of products that are currently on the market, the category should confirm and validate behavior (people were already browsing the internet so coining browser made sense). SET THE RULES OF MEMBERSHIP: A name should represent the rules of membership the specific characteristics that the products within the category must have in order to belong to the category. Once a name achieves dominance, people will know what to expect and the brands within the umbrella will follow suit. MANAGE CUSTOMER EXPECTATIONS: Category names make it easy for people to familiarize themselves with products and brands. They help people make choices and create loyalty. They set expectations about why brands belong. When a category name resonates, it paves the way for brands to develop meaningful connections with people. Gaining Traction for Your New Category Businesses are often so focused on designing, manufacturing, and promoting their own product that they postpone the effort needed to market the category itself. And before they know it, it s too late, and the category fizzles out. The new category launch needs to lead your brand into the arena, not the other way around. And most new categories fail because they simply aren t launched correctly. When developing your strategy for launching a new brand category, these five tactics are key: 5

6 BE CONSISTENT WITH MESSAGING: Just as you ve developed and tested messaging around your brand, developing the messaging around your new brand category is equally important. Consistency is everything. In order to build traction, you ll need competition, influencers, and customers to grab onto a clear and concise message. Everyone needs to be on the same page about what the category is, why it s better than the alternative, and why it matters. It may be tempting to embellish the messaging with claims that make it sound remarkable, but don t. You ll need messaging that is repeatable, authentic, and true to your brand in order to be picked up by your audience. Use the messaging to craft a narrative around the category. A compelling, memorable story will give the new category the legs it needs to be successful. A compelling, memorable story will give the new category the legs it needs to be successful. INVEST IN THE SEO STRATEGY With a name and a message in place, the category SEO strategy should be top of mind. A strong web presence is invaluable for a category launch but getting there takes a concerted effort. The experience of your target audience will be informed by their online interactions. So, making the category name easy to find and creating credibility around it through online content will help search engines gauge the user experience and contribute to SEO status. Develop keywords (attributes) for the brand category and weave the keywords consistently into web content. GENERATE COMPETITION: It may sound counterintuitive, but when you are creating a category, competition helps legitimize a market and increases the size of the pie. Your brand will actually benefit if others are spending their marketing dollars to help popularize the value of what you are doing. The key, however, is to be the first to market and continue to find ways to elevate yourself above the crowd, while maintaining both a product and thought leadership position. TAP INTO INFLUENTIAL EARLY ADOPTERS: When launching a new category, finding ambassadors with strong reputations will help raise awareness for and substantiate your category. Bring your 6

7 targeted customers into the journey of creating a new category. Create buy-in by showing them the value of a new category that better meets their needs. Their sense of ownership will activate them as important influencers and create momentum with a wider audience. PROVE YOU OFFER SOMETHING DIFFERENT: It s critical to demonstrate to the people important to your brand why your category matters, and how it offers something better than the existing category. Use the strongest parts of your brand to go beyond basic features and benefits. Prove your brand is poised to be the category leader because its purpose and promise are head and shoulders above the competition (and, there s always competition). Your proof points will justify the new category and position your brand as the de facto leader, ready to take the stage. DEVELOP A GO-TO-MARKET STRATEGY: Before engaging in any marketing activities, map out the plan for bringing the new category to market. Having a clear and concrete action plan in place will make it easier to execute and track. POPULARIZE YOUR CATEGORY: Otherwise known as PR. Keep in mind that the category is the focus of the PR efforts, not your brand. Focus on cultivating buzz around the category in an authentic way. This requires some restraint on behalf of your brand. Drawing too much attention to your brand right out of the gate is a misstep. This is because people won t yet have a way of talking about it. So create context first. Then, generate conversations around the category with a strong media presence (industry influencers, bloggers, press, and social media should all be activated). The buzz around your brand will follow. EDUCATE CUSTOMERS: Host conferences and events both in person and online that use the new category name. Educating customers about the category should be the central driver for marketing. Build your reputation without overselling yourself. Establishing industry user groups with digital meetups is a powerful way to spark conversations a nd create groundswell with a wider audience. With enough momentum, your brand s leadership will be in a position as a thought leader, further embedding the category, and subsequently your brand in customers minds. The Rewards of Creating a New Category Identifying a new category and building it from scratch can serve as a powerful path to growth for your brand. And the effort involved pays off. Research has shown that category creators experience fast growth and receive high valuations from investors. 7

8 To figure out just how lucrative category creation could be, Eddie Yoon and Linda Deeken of the Harvard Business Review, looked at Fortune s list of the 100 fastest growing US companies: 13 companies that were instrumental in creating their categories accounted for 53% of the incremental revenue growth and 74% of incremental capitalization growth over three years. Half of the top 20 companies grew because of category creation. Wall Street rewards category creators. Companies that create a new category receive $5.60 in incremental market capitalization for every $1.00 in revenue growth. When companies gain early leadership in a category, they gain more access to funding and more resources to innovate, create, market, and sell their brand. The perception of leadership and innovation has high value. By creating a new category, your brand will be in a solid position to surpass the competition or break into a flooded market. On top of that, your brand will be positioned to own the category as the de facto leader. Category creation is nothing short of a game changer. 8