Growing your business can be exciting, but it also brings unique challenges. This is especially true when maintaining brand authenticity. As your business expands, staying true to your core values and mission is essential. New products and services open doors to new markets, and new talent brings fresh insights. But when you don't focus on your brand's foundation, new opportunities may also weaken your brand.
The potential impact on brand during expansion
Amid rapid expansion, several factors can significantly influence how your brand is perceived and experienced by customers, employees, and the general public. These factors affect your brand's reputation and shape consumer trust and loyalty. Here are some real-life case studies to consider.
Changing brand identity
Growth can dilute your core identity or negatively impact consumer's feelings toward the brand. This can happen if new products or services deviate from your brand's original values and vision. Your brand may lose its distinctiveness, making it challenging for customers to recognize and connect with it.
Expansion might make loyal customers perceive that the brand is becoming too commercialized or not as authentic. Customers who value the brand for its original values and exclusivity might feel alienated, leading to a loss of brand advocates. They may feel the brand is not as credible as it once was.
When Unilever acquired GROM, an Italian gelato company, 83% of consumers said the acquisition was "bad news." This negative perception led to several GROM stores closing, including the ice cream maker's first store. For a legacy company, loyal customers often feel that the acquiring or parent brand hurts the original, authentic values it was built on.
Inconsistent brand messaging
Rapid growth can lead to inconsistent messaging across different markets or channels. This inconsistency can confuse customers and weaken brand perception. Mixed messages can erode trust and loyalty, as customers might feel the brand is unreliable or unclear in its purpose.
Starbucks' rapid expansion in the late 2000s is a real-life example of this situation. As Starbucks opened numerous new locations at a fast pace, the brand faced challenges in maintaining consistent messaging across different markets. As service and product quality began to vary from one location to another, customers began to see the brand as less reliable and the initial sense of a unique, community-focused coffee shop began to fade. To improve brand perceptions and regain loyalty, Starbucks refocused on delivering a high-quality and consistent customer experience, shuttering 150 underperforming locations, adding enticing menu items, and beefing up their mobile app ordering capabilities.
Quality control issues
Maintaining high standards of quality becomes challenging as production scales up during expansion. This is especially true if new product lines take focus away from legacy products or when new manufacturing partners or suppliers are introduced. Any dip in quality can tarnish the brand's reputation, leading to customer dissatisfaction and negative word-of-mouth.
As Chipotle Mexican Grill expanded rapidly, maintaining its high quality and food safety standards became challenging. In 2015, the company faced several foodborne illness outbreaks linked to several locations across the United States. The outbreaks harmed Chipotle's brand reputation, customer trust, and sales, illustrating the challenges of maintaining high standards during rapid expansion.
Cultural misalignment
Expanding into new geographic or demographic markets may expose the brand to different cultural norms and values. If not managed carefully, the brand's messaging and products might not resonate with these new audiences. Misalignment can result in poor consumer perception in a particular market, ineffective marketing campaigns, and potential backlash from cultural insensitivity.
Consider the example of McDonald's expansion into India. McDonald's faced significant cultural and religious differences in India, where a large part of the population abstains from eating beef, considering cows sacred. To adapt, McDonald's had to change its classic menu. It introduced items like the McAloo Tikki, a potato burger, and the Maharaja Mac, a chicken Big Mac. Understanding and respecting local norms and values allowed McDonald's to gain acceptance in the Indian market.
Operational challenges
Scaling operations quickly can strain resources, leading to logistical bottlenecks, supply chain issues, and operational inefficiencies. Operational hiccups can delay product delivery, reduce customer satisfaction, and increase operational costs, harming the brand's image.
Amazon expanded rapidly during the COVID-19 pandemic. This growth led to logistical backups, supply chain issues, and operational waste for the e-commerce giant. Despite Amazon's robust infrastructure, the sudden increase in orders overwhelmed their fulfillment centers, resulting in delays and inventory shortages. The company had to hire thousands of new workers. It also had to change its supply chain to manage more demand and cut inefficiencies.
Employee alignment and morale
As newly acquired companies integrate workforces, maintaining a single company culture and morale can be difficult. Disengaged employees and a fractured company culture can hurt productivity, service quality, and internal morale, and can indirectly harm a brand's external image.
When Uber expanded globally, it struggled to maintain a unified company culture and align all employees with its core values. The company's aggressive growth strategy led to a scattered workforce and differing management practices. These factors caused several high-profile incidents and a toxic workplace culture. This eventually led to significant changes in leadership and a concerted effort to reform and rebuild the company culture.
Customer service challenges
An expanding customer base requires scaling customer service operations. Failing to do so can lead to longer response times and lower service quality. Poor customer service can lead to dissatisfaction and damage long-term customer relationships, affecting loyalty and repeat business.
As Netflix rapidly expanded its customer base globally, the company faced challenges in scaling its customer service operations. Initially, Netflix's customer service struggled to meet demand, leading to long wait times and inconsistent support. The company invested in customer service infrastructure to meet diverse needs. It hired support staff, implemented technologies, and provided localized multilingual support. These efforts were crucial in maintaining customer satisfaction and supporting Netflix's continued growth.
How to scale and maintain your brand’s integrity
During tremendous business expansion and growth, leaders are faced a fundamental question: how can we maintain our brand's authenticity in the face of rapid change?
If you're asking yourself the same question, we've written a guide titled Navigating Growth with Brand Integrity: A strategic guide for organizations experiencing expansion, mergers, and broadening markets. This free guide will walk you through the key phases of brand evolution. It gives a clear, structured roadmap for growing and keeping your brand's integrity.
In the guide, you'll discover the strategic pillars that create a strong foundation for a brand. This foundation is more than just your logo or website; it's the people, places, and things that drive your company in your specific marketplace.
Strategic brand pillars
As you expand your business, it's imperative to maintain brand authenticity. These strategic brand pillars serve as your brand foundation. They are:
Vision
The aspirational reasons driving your organization's existence and its intended achievements.
Core values
The guiding beliefs and principles shaping your organization's actions, behaviors, and decisions.
Audiences
The people your organization needs to reach to be successful.
Peers & competitors
The other product/service options available to your target audience.
Personality
The emotive characteristics that define your brand's expression and connection with consumers.
Value proposition
The unique value your organization offers your audience and sets you apart from peers and competitors.
Conclusion
The true stories in this article may have been avoided if company leaders had focused on their brand pillars as they expanded. And they're not alone. A 2020 McKinsey study reported that 80% of companies revise their brand after expanding. But only 40% take a fact-based approach to defining their target brand positioning.
In addition, brand integrity requires investment in budget, creative resources, and staffing. It's vital to remember that your brand is an operating asset. Like every other business asset, it must be nurtured, refined, supported, and grown.
The investment in your brand is always worth it. Nearly 9 in 10 consumers say authenticity is important when deciding which brands they like and support. 50% say it's very important. Without a comprehensive brand strategy, your brand can get lost in the noise of new products, services, names, messages, and people that come with rapid expansion.
As your company expands and adapts to new markets, anchor your brand with strategic foresight, thoughtful investment, and internal alignment. Download our free resource today for more insights on how to successfully grow your brand and business.
