In a recent post on Conversation Agent, Valeria Maltoni argues that brands shouldn’t “Try to Be All Things to All Customers”.  She argues for “picking one thing and sticking with it” rather than trying to do it all.

Valeria points out: “The more audiences and segments you have – which depend on your product or service lines – the higher the complexity in delivering to all the same standards when it comes to meeting customer service expectations and communication needs.” [Emphasis in original]

I agree with this point completely, and I think it’s especially relevant for smaller businesses.  Smaller businesses may not have the capacity (in terms of human or capital resources) to try to do too much, but if they do try and fail the consequences can be disastrous.

However, with a nod to branding expert Al Ries, Valeria cites this post on Branding Strategy Insider for the proposition that “Citigroup got bigger and weaker because the brand was stretched in so many directions [by its acquisitions in insurance, investment banking and brokerage]. As a result, the brand lost its meaning.” I agree that Citi’s experience is relevant to marketers – but for a completely different reason.

via dealbreaker.com

In an earlier life (20+ years ago – yikes!) I was an attorney for one of Citi’s law firms (my opinions and recollections are, of course, my own).  Back then, Citi concentrated less on consumers than on commercial and wholesale banking, on a large and often global scale.  From the institutional perspective, which (I believe) is how Citi approached them, brokerage, investment banking and insurance are indeed adjacent businesses and it made sense to take advantage of the regulatory changes that permitted the acquisitions.

I believe the problem was that entering these businesses forced Citi to be more consumer-focused than it knew how or even wanted to be.  None of its acquisitions brought world-class consumer marketing to the table and as far as I know there was no in-house culture that would or could have turned Citi into a consumer-centric institution like Commerce (now TD Bank) or even Wells Fargo (bear in mind that the bank’s tagline is still (or again), “The Citi never sleeps”).

My takeaway from Citi is not that it spread itself too thin but that it misunderstood what it was buying.  Specifically, Citi underestimated the inherent consumer component of its new businesses.  If I’m right, Citi found itself suddenly in need of large-scale consumer marketing capabilities that it didn’t have; it’s been trying to catch up ever since.

For smaller businesses, with so much less margin for error, it is vital to fully understand any new business venture – and from the perspective of the customer, not just the business owner.  Remember, Citi thought it was buying synergistic institutional finance businesses only to find out that it was buying consumer businesses, too.  The key question is whether – and how – your interactions with customers of the new business will differ from what you are doing now.  Will you need to spend more time with the customer?  Know more about the customer?  How much training will your associates need?  Can you use your current associates at all?

So my lesson from Citigroup is this: Understand your customer, but understand your business first.