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(originally published by Booz & Company)


The Internal Impact of External Branding

Companies in the throes of change need brand communication to affect their employees’ actions as much as it does their customers.

Conventional wisdom says branding is for external communication; it aims to influence current and prospective customers. But this view of branding is too narrow, especially when a company is trying to fundamentally redefine its business strategy.

For companies trying to shift from selling goods and services to offering higher-margin customized solutions, branding can serve a powerful internal purpose.”
Indeed, for the many companies attempting to make the shift from selling lower-margin goods and services to offering higher-margin customized solutions, branding can serve a powerful internal purpose. When we were faced with this very challenge, our branding strategy was critical in uniting formerly divided business-unit and product-oriented management factions behind new shared goals and strategies to deliver solutions.

Five years ago, we established the Construction Information Group to tie together six strong, existing brands representing McGraw-Hill’s construction-related service companies and publications: F.W. Dodge, Architectural Record, Sweet’s Product News, Engineering News-Record (ENR), Design-Build, and Our strategy at the time was to loosely endorse each of the brands in association with the Construction Information Group name. But we rapidly found that just creating an organizational layer and tacking it onto our brands was not enough to motivate our people to collaborate, or to gain new attention in the market.

A Unified Brand
Building product manufacturers (BPMs, companies that produce windows, doors, paints, etc. and sit in the middle of the commercial construction food chain) are less and less interested in buying products or plain-vanilla services. Increasingly, they want integrated solutions, including help in marketing their products through our advertising vehicles online and offline, projecting information through our databases that will help them target leads, and distributing product information to various end-user segments. The trouble was that managers handling each of our existing brands continued to pursue their own goals independently, leaving the “solution sale” out of the discussion with the customer.

“The equity of the old brands remained intact in a system designed to channel future equity into the unified brand.”
To provide solutions, a company must cut across business units to customize offerings — content, objectives, and pricing — for individual customers. We weren’t organized to do that. Each of our account managers called on BPMs independently, and focused on selling products only under their brand. There was limited information sharing or effort to help drive cross-product sales. There was no single point of contact for the BPM customer.  After surveying our customers on their perceptions of our brands in the fall of 2001, we looked at three options to strengthen the collection of brands associated with the Construction Information Group:

  1. Use one of the strongest existing brands — Sweet’s Product News or F.W. Dodge — as the name of the entire collection.
  2. Create a new name for the collection of brands, an appealing way to signal major change internally and externally.
  3. Use the most recognizable brand name — McGraw-Hill — in the new name, strongly emphasizing its value above the prior collection of brands.

After some testing, we concluded that the first option risked creating winners and losers internally, a dubious way to achieve collaboration. It also didn’t supply a sufficiently strong external message about our new approaches. And creating a new brand looked to be expensive. The McGraw-Hill name already had an image with the broadest range of customers, and had the best potential to pull the separate business units together. Choosing the third option, we came up with the name McGraw-Hill Construction. With it, the equity of the old brands remained intact in a system designed to channel future equity into the unified brand.

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  1. “How the Red Sox Touch All the Branding Bases,” by Glenn Rifkin, s+b, 4Q 1999. Click here.
  2. “Channel Champions: The Rise and Fall of Product-Based Differentiation,” by Evan R. Hirsh and Steven B. Wheeler, s+b, 4Q 1999. Click here.
  3. “How to Brand Sand,” by Sam I. Hill, Jack McGrath, and Sandeep Dayal, s+b, 2Q 1998. Click here.
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