A graphic designer spoke to me last week. His graphic design firm — let's call it XYZ Design — was numero uno in designing labels for a large wine company. Let's call that ABC Wines. Now ABC wines had some really super wines. They loved the incomparable graphic design of XYZ design, and continued to use them for several of their major brands. This one client alone generated tons of work and income for XYZ design right through the year.
Then It Happened…
ABC Wines sold out to another wine company. This new wine company had its own in-house graphic designers. That effectively meant XYZ Design's income and work flow were severely hit, causing them to scramble for new clients to fill the gap.
"If only I had done what you said," said the owner of XYZ Design, " and not line extended into web design and other forms of graphic design and communication, I would have gone down the gurgler too"
Line extension doesn't mean you run just one business or have one product.
No, it doesn't mean that at all.
Multi-tasking existed long before the advent of computers and the more skills you have, the better off you are in today's world. However, you have to name each 'twin' differently to give it a very distinct identity. When you do that, your client recognises the difference and chooses that 'twin' for its own individual personality and character.
How Do You Line Extend Without Line Extending
In the case of XYZ Design, it would have to work in this manner. To all wine companies, they would enter the door as a 'wine label design Specialist.' To every wine company in the country and overseas, they would be known, not as XYZ Design but more so, as XYZ Wine Design Specialists.'
This would give the wine companies a specialist to deal with. It would help XYZ Wine Design specialists to build their reputation in the wine industry to a point where if any wine company decided to design a label, XYZ Design would be one of the main contenders.
Now, wine companies don't do just labels. They do brochures, leaflets, annual reports, websites and tons of other stuff. Your question would be, how can I afford to lose out on that market?
Why You Never Lose Out On The Rest Of The Stuff
It's called backdoor entry. Everyone (including your competition) is banging on the front door, trying to get in. You, on the other hand, quietly slip in through the backdoor, pick your goodies and slip out.
This is how it works in practice. If you do really good work designing wine labels, it's almost inevitable that clients will ask you if you can design other associated material. That's when you introduce your other company, "JKL Graphic Design" and "PQR Web Design". Same company, different positioning and certainly different brand names. What this does, is it helps clients compartmentalize their thinking. They now think you have specialist groups working on specialist projects taking extra special attention.
This Does Two Things…
1) It helps each of your businesses take on a 'character' of its own without affecting the other, much like Air New Zealand is premium and Freedom Air is budget. The public knows they're one company but still compartmentalizes them into two. You can change the character of each company, and help boil it down to the smallest possible niche, making you an expert in the category.
2) The client sees your multiple brands as different brands. When they need web design services, or when they need to recommend them, they call the web design experts. And so on with graphic design and wine labels or just about anything that you are handling.
Everyone Loves A Specialist
Would you allow a GP to work on your triple bypass? OR would you prefer a heart specialist? Even better, a doctor who does only triple bypass surgery? If you feel the difference, so does your client and to ignore this basic human instinct is to do so at your own risk.
How It Works Not Just In Business But In The Workplace Too
If you're working in a job, the same rule applies. Be known as a genius for something. Know how several things work. But branding yourself in one skill makes you the expert. Every time the company has a fire in that section, you will be known for your fire-fighting skills.
On an ordinary basis, most employees are not known for any particular skill and wonder why they are on top of the redundancy list. Bosses don't know what you do and why you're special, because you haven't been doing the 'branding bit'. It's better to be a specialist than the 'safe unknown.'
As Dire Straits sang in one of their songs, "Sitting on the fence is a dangerous course: You could get a bullet from the peace keeping force."
Funny (But True) Phrases When You Forget To Obey The Rules