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How to expand your business the right way

A panel of experts weighs in on why companies need to keep their brands and their customers at the forefront of their growth plans

How to expand your business the right way

When businesses make the decision to expand, it comes with a complicated set of questions, especially considering the options for what channels to explore: Social? Online? Brick-and-mortar? Businesses looking to grow their customer base, expand their footprint, or roll out new goods and services are faced with almost too many choices.

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At the recent Fast Company Innovation Festival, global software, payments, and hardware solutions company Square hosted “The Art of Expansion,” a virtual panel of business leaders from Blue Bottle, MALIN+GOETZ and Square, sharing how their brands approach expansion. They discussed how to maintain brand identity, the importance of knowing your customers and the role of data in expansion decisions. Here are five takeaways from the event:

1. Expanding and branding go together.

There are many ways to grow a business; the right one for your business is the one that fits naturally with the brand on which you’ve built your success. In the case of Square, the brand is about empowering sellers to do business anywhere. When it expands, it does so to fulfill its brand mission. “We’re led by our customers—what countries they want to go to, what channels they want to open up,” says Ashley Grech, global head of sales at Square.

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Skincare and fragrance retailer MALIN+GOETZ uses its brand identity as a litmus test when sorting through the glut of expansion opportunities. “[Being omnichannel], we have the propensity to be pulled in multiple directions,” says Rachel Lavipour, the company’s vice president of sales for North America. She adds that each new opportunity has to pass the brand test. “We evaluate them and ask, Does this opportunity represent who we are as a brand—an uncomplicated, urban brand for everyone?”

2. Some expansions are about more than growing revenue.

When Blue Bottle, a specialty coffee roaster with cafes across the U.S. and Japan, considers an idea for expansion, its first task is to determine whether it primarily drives revenue or builds the brand. Both objectives are worthwhile, but they have different measures of success. For instance, some Blue Bottle cafés are high-traffic locations that serve a steady flow of workers on their coffee break, while others focus more on aesthetics. “We have some cafés that are just really beautiful and are meant for that brand-building experience,” says Oriana Wen, director of data and innovation at Blue Bottle. At one location, success is determined by its impact on the bottom line; at the other, it is measured more by its ability to grow the brand.

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3. Know your audience.

Some expansions create deeper relationships with current customers while others convert new ones. Knowing the difference is crucial. For example, most of Blue Bottle’s die-hard customers are happy with a simplified, face-to-face coffee-buying experience. So, when the company designed an app for online ordering, it was aimed squarely at a new customer base.

“We realized we’re not really building this for our existing guests,” Wen says. “The app was actually meant more for the people that are on the go and just want to grab a quick coffee.” Wen says that understanding the audience for the app—and having a clear goal in mind—helped the team design and launch it quickly.

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4. Let the data lead you.

Expansions are more effective when they’re based on data. Lavipour illustrated this point with MALIN+GOETZ’s initial foray onto Amazon. At first, the brand treated its Amazon business with restraint, offering just a slice of its overall product line. “This was predominantly to protect our website and other e-commerce channels that we had, and not necessarily a decision based on data,” she says.

But when the company analyzed consumer behavior, it became clear that MALIN+GOETZ’s website and Amazon store attracted two separate sets of customers, and its Amazon sales were unlikely to hurt business it conducted through other channels. “As we’ve let the flood gates open, both our website and our Amazon business have really, really flourished nicely,” Lavipour says.

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5. New markets deserve new marketing campaigns.

Blue Bottle’s uncompromising coffee served at a relaxed pace was a natural fit for its home state of California. But every market is different, and as Blue Bottle has expanded geographically, it’s had to build new relationships with new communities. And that means being thoughtful about marketing. “Once we got to a new market, people were like, ‘What is Blue Bottle? Why am I standing in line?’ ” Wen says. “Especially in New York. We had a tough time breaking into New York because it’s a faster pace. And we didn’t have that home-field advantage anymore.”

By the time Blue Bottle opened its first location in Chicago, it had learned its lesson. The marketing campaign began early to educate consumers and included partnerships with local companies to give its new locations a hometown feel. “We had a record first week in that café,” Wen says.

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No matter how businesses tackle expansion—and they now have more options than ever—it requires careful consideration to make the most of the channels available. Ultimately, successful growth comes when companies know their brand, their customers—and can clearly articulate their reasons for growing.

Watch full panel for insights on this topic

  

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