Build New or Renovate?

September 1, 2007
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Build New or Renovate?

By Brian Erdman

Thinking about innovating from the ground up? If the foundation is solid, maybe all your brand needs is the proverbial fresh coat of paint.

My first house was in what you would call a “fringe neighborhood”. It was one of those up-and-coming urban settings born from a saturated housing market in the neighboring, highly sought-after communities. My neighborhood was defined by its juxtaposition—a checkerboard of new construction homes amid dilapidation and young, urban, well-off transplants mingling among lifelong residents of modest means.
I considered myself an early adopter in this neighborhood. No, not relative to Mrs. Adams, a third generation resident of my street, but relative to these young, professional immigrants. A benefit of getting in early was that I was able to witness the neighborhood’s continual transformation. One of the things that intrigued (and shocked) me was the frequent renovation of 100-year-old homes. Opportunistic investors would take some of the most dilapidated homes you have ever seen and puff them up and sell them for a small fortune. I have to believe that many of my happy new neighbors would not have been so eager to pay a small fortune for these homes if they had seen them pre-renovation through my eyes. I was amazed at what people would pay for a home with old bones, but with a new façade.
Innovating by renovating
In the consumer product goods world, we are seeing more and more of this same activity—innovating by renovating. One company that is particularly good at this is Procter & Gamble. With relentless investors that demand unending growth, P&G has turned to this method of innovation, in part, out of necessity. Building innovation from the ground up is extremely costly and time consuming. As their base keeps growing ($80 billion and counting), P&G has to launch growth-driving initiatives at an alarming frequency.
So enter renovation, which I like to define as innovation of the façade. This type of commercial innovation is made in the absence of a product/technology change. P&G has utilized co-branding numerous times recently to achieve this—leveraging the equities of its in-house mega brands to create a proposition that is innovative in the minds of consumers, but without the significant time and expense of “building new”. Extensions such as Crest with Scope and Downy with Febreze are more about renovating the bones of the base brand than they are about building new technology from the ground up. But here’s the beauty: In consumers’ minds, they are moving into a proposition that, to them, is new, fresh and, hopefully, worth the price premium.
And, more importantly, this approach buys them time in between their true technology innovations, such as Tide with Bleach Alternative with ColorClean. (Once you weed your way through the mouthful of a name, you’ll see the significance of this technological innovation. Whites white. Colors bright. All in one.)
So as you look to innovate on your brand, take a hard look at what you’ve already got. Do you have a good foundation? Do you have neighboring equities that you can expand and leverage? If so, instead of trying to build new, it may pay off to renovate instead. You may be shocked at how consumers will reward you.
Brian Erdman is a brand consultant at laga, a design and innovation firm with offices in Cincinnati, New York and Chicago. He can be reached at 513.961.6225 or

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