| Simplifying Product Names Are you hoping your customers will yell out “Bingo – I’ve got it!”? Is your product naming so complex that customers have to keep charts of names along with a description of what it is? Do you sell standalone products or integrated solutions? Do you offer multiple products to the same customer? Do you know if your brand links to the first product that you sold rather than your company name? Perhaps your company grew by acquisition. Your portfolio includes legacy products that have yet to be integrated or renamed. Maybe members of the acquired entities convinced you that their strength lies in their brand identity and need to continue to operate separately. Is that why you justified the acquisition in the first place? Was it to integrate their solutions into your portfolio? Unfortunately, the strategy and needs of the customer frequently take a back seat to the interests of managers inside the company. Several factors to consider when deciding the right structure for your product/service naming strategy include:
To illustrate this, let us visit the fictitious Acme Financial Services Company. They sell software and information services and internet technology to automate customer financial processes. These products are sold in a modular fashion. All are designed to work together to provide a complete accounting and financial management solution. This includes general ledger, to accounts receivable, accounts payable, treasury, cash management, tax, billing, budgeting and reporting. A customer may buy the Acme general ledger system, or any combination of products that meet their needs. If these different components integrate well, then the value of the complete set to a customer is far greater than any individual product. Recognizing this, Acme decided that the optimal sale is one where the customer buys most or all of the Acme solution set. Acme is the provider of financial services solutions. Acme’s product naming strategy reflects this approach. They used a descriptive name for all of their products, each name attached to the Acme company name. Thus, Acme Financial Services became the meaningful group name for everything they sell. Their accounts payable solution is Acme Accounts Payable, general ledger is Acme General Ledger, and billing is Acme Billing, etc. The Acme product name says exactly what it is using the language that the customer uses for that function. Most importantly, the name Acme precedes every name. The brand awareness and association with the products and services they offer continually connect to the name Acme. Their goal is to establish long-term loyal and trusted relationships with customers of the Acme Financial Services Company. In fact, this approach ensures that the product portfolio evolves to align with the needs of customers. The customer highly values Acme as their provider of financial services solutions. Let us contrast this with another invented company called Amerfin Financial Services. Imagine that Amerfin had grown through acquisition. Their core product was accounting software for general ledger, accounts receivable, and accounts payable processes. These products sell as a product suite under the brand name “Fostar”. The Amerfin Financial Services Company products are “Fostar GL” for general ledger, “Fostar AP” for accounts payable, and “Fostar AR” for accounts receivable. All fifteen thousand customers bought Fostar GL, but the other products had achieved only twenty percent sales into that base. The general awareness that customers had with Amerfin Company was from the Fostar GL product. The perception of the scope and capability of Amerfin was limited by that product relationship. Amerfin recognized that increased competition and price pressure were squeezing their margins. Their product portfolio was too narrow to compete. They needed to add new revenue streams quickly. They went on an acquisition spree to add the other components. Each strong market players in a niche, and their resulting portfolio looked something like this: Fostar GL – general ledger Fostar AP – accounts payable Fostar AR – accounts receivable Tresact – treasury and cash management Upay – billing Xpend – budgeting and expense management FlashIT – reporting. The brand awareness of each of these products clearly links to the unique branded name and focus of that product. The Amerfin management were persuaded that the risk of integrating and re-branding these products was too high. It would be disruptive to the established product sales and it would prevent them from realizing their potential. Amerfin went to market with this new product portfolio and cross-trained their sales people on all of these stand- alone products. Amerfin sales people called on customers who used Fostar GL as their primary product from Amerfin. Though they were aware of Amerfin, the name Fostar is far more relevant to them as they use and “touch” that product every day. The sales person had to explain what the new portfolio is, how it benefits them, and then introduce a host of new names to the customer. “Hi, you know and use Fostar GL and we are very pleased to let you know we have added major new components to our product line. We aim to serve more of your needs as a more complete solutions provider. Let me tell you about our newest offerings: Tresact, UPay, Xpend, and FlashIT……”. Can you see the customer dozing off already, or racing to their chart to keep up with this jumble of names? That’s the game called buzzword bingo. It is as though Amerfin decided to keep them guessing about what they do, hoping they would yell out “bingo!” when they finally get it. The result is nothing but confusion. The challenge of selling new solutions to customers grows with each conversation. Customers struggle to understand who Amerfin is. Sales people rapidly retreat to selling what they know to put short-term bread on the table. Is this how Amerfin wanted their customers to experience a relationship with the company? Imagine that the “Fostar” product brand name had become equal in the market with Financial Services solutions. Fostar achieved a dominant market share. Years of successful advertising and promotions produced a strong reputation for accuracy and reliability. Very few customers were even aware of the Amerfin Company. Their association was very strongly with the company’s product – Fostar GL. The company had developed broad distribution channels, and created certified Fostar reseller and certified Fostar developer brand programs. This further cemented the brand identity of this product. In this case, Amerfin might be more prudent in deciding to use the Fostar name as its flagship brand. Then rename its new “Tresact, UPay, Xpend, and FlashIT” brands to conform to this name. They might also enhance their product naming strategy to augment the word Fostar with descriptive words for each solution. Just as in the first example where the name Acme was the primary brand. Fostar would become the primary brand name. For example, Fostar General Ledger, Fostar Billing, Fostar Reporting, etc. The risk of changing a name with such powerful brand recognition and equity is great. The cost of developing an entirely new brand for the same set of products is also risky. Is the Fostar brand extensible to include the new acquired products? If not, the company should evaluate using Amerfin as the overall integrating brand for its product line. Whichever you choose, the goals remain the same:
Patrick Smyth is a trusted business advisor and mentor. He improves business performance through effective change management, leadership, and marketing. His focus on business outcomes, growth, objective setting, team building, and communications builds sustainable productivity and growth. www.innovationhabitude.com |
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