O2’s unhealthy brand extension

Mobile network O2's decision to kill its fledgling healthcare offer, Help at Hand, shows how hard it is to stretch a brand into a new category. This new service, comprising a special handset with a fall detector and a special one-touch button linked to a 24/7 support centre, was launched in March 2013 only to be withdrawn five months later, as reported here.

What can we learn from yet another example of failed brand extension?

Brand equity is not the issue….

The first thing to say is that brand stretch per se was probably not the problem. There is no reason what O2 could not, in theory, stretch from being a mobile network to offering health care solutions. 

…nor is the size of prize

Furthermore, there is probably a need for healthcare solutions like Help at Hand, given the growing number of older people that need looking after. Indeed, O2 parent company quoted research showing that "65% of carers agreed or strongly agreed they'd feel more at ease if the person they supported had a way of alerting others to a fall, a fit".

So, assuming the "size of prize" was there for O2, what was the problem?

Think business model, not brand

I suggested when interviewed a couple of years ago on O2 Health that the bigger challenge is the one that most marketers seem to find harder to get their heads round: "ability to win":

– Route to consumer: selling a serious healthcare product is different to selling a bog standard mobile phone and yet it seems Help at Hand was sold through the same channels: O2 stores and supermarkets. My guess is that a new product like this needs a new "route to market", being sold in specialist stores (online and physical) selling to older people

– Comms channels: different media may be needed to target people caring for older people, including online forums and blogs

– Influencer marketing: a specialist program talking to healthcare professionals might also have been useful

All of the above are new competencies that O2 would need to build, involving a lot of time, money and patience. This could be done, and we may see O2 coming back into healthcare in the future.

In conclusion, what thinking about stretching your brand, don't forget to really look at your ability to win in the new category, not just the size of the prize. Don't just look at the brand, look at the whole business model.