The costly perils of physical rebranding

Sometimes rebranding can help. Just ask Eleanor Gow (rebranded as Elle McPherson), Richard Starkey (Ringo Starr), Frances Gumm (Judy Garland), Archibald Leach (Cary Grant) and Maurice Micklewhite (Michael Caine). Or ask Exxon (formerly Esso), Sony (formerly the catchily named Tsushin Kogyo [= Tokyo Telecommunications Engineering]) and Richmond’s own Altria (formerly Philip Morris).

And sometimes it doesn’t. And when it doesn’t, to call the consequences costly would be a gross understatement.

It’s bad enough when you have an electronic brand such as where the consequences can be at least a short-term loss of web traffic. Or like the SyFy Channel, where the consequences of its brand change from SciFi were mainly jokes about syphyllis.

But when you rebrand a physical brand – particularly a brick-and-mortar retail one – the downside potential can be disastrous. This is because, as Paul Veness, director of brand implementation company Endpoint, says, “…the cost of [executing] a rebranding is 20 to 30 times the creative budget. It’s everything from signage to staff uniforms to the IT back end.” To which should be added the cost of switching everything back again if you chicken out in the face of customer disapproval.

Expensive branding disasters

Pepsi stuck to its guns and kept its unpopular redesigned logo, and now people are used to it. But last year, when Pepsico subsidiary Tropicana introduced its new orange-juice logo, it drew a deluge of phone calls, e-mails and letters saying, “The new cartons stink” and worse. Supermarket sales dropped noticeably. So they quickly changed back.

Avoiding branding disasters

One way to avoid consumer rebellion against branding changes is to do them gradually. BMW, Nike, Apple and Shell have all been evolving their logos so subtly that they keep up with changing graphic tastes without anyone ever noticing the changes from one evolutionary step to the next.

Another is to have a product that’s perceived as so good, it doesn’t matter what anyone calls it. Volkswagen was a car with an unpronounceable name (at least to non-Germans), 1930s technology, and terrible historical connotations, none other than Adolf Hitler having been one of its early endorsers — but a paradigm-shattering advertising campaign overcame all that.

Mitigating branding disasters

In the UK, home of such memorable brand names as Smedley’s, Kellogg changed the name of its Coco Pops cereal to Choco Krispies – why, no one knows. But when a consumer outcry arose over changing the popular name, Kellogg turned a potentially costly lemon into lemonade. They set up a phone vote referendum on the old vs. the new name for consumers, publicized it with a PR campaign, and got tons of media coverage leading up to the return of the old name – not as a retreat but as a triumph.

An unmitigated branding disaster

The Gap’s rebranding this year showed neither the foresight nor the flexibility of Kellogg’s.

After two years’ development by New York agency Laird & Partners, they replaced their well-known and well-liked 20-year-old white-letters-with-underscore logo with three black letters and a small blue square — and triggered an internet firestorm.

There was a new “I think the new GAP logo sucks” facebook page, the most recent post being Octiober 28. There was a new Twitter account, supposedly from the logo itself, tweeting about how ugly it felt. There was a new website inviting visitors to post their own designs, and – Surprise, surprise! – most of those designs featured not the word “Gap,” but a four-letter word that rhymes with it. Leaving Gap’s North America president Marka Hansen, who spearheaded the rebranding, to put on her game face, roll out the corporatespeak, and post:

This past Monday, without a lot of fanfare, we introduced a new logo on our site…Now, given the passionate outpouring from customers that followed, we’ve decided to engage in the dialogue, take their feedback on board and work together as we move ahead and evolve to the next phase of Gap. From this online dialogue, it’s clear that Gap still has a close connection to our customers, so tapping into this energy is right. Thank you to everyone who has already shared feedback. I’m excited about continuing the conversation and believe passionately in where we’re taking our brand.

Oh, yes – and to restore the old logo and change back the graphics on their e-tail site just in time for a meeting with Wall Street investors and analysts.

Questions to ask before rebranding

So before you invest in the cost of rebranding yourself– and the possibly greater cost in sales and customer goodwill if the rebranding goes wrong – ask yourself:

  • How much equity do I have in my current branding? How much do customers really like it?
  • How important is my logo anyhow?
  • What do I stand to gain from a successful rebranding (knowing that in most cases a successful rebranding is one that goes almost completely unnoticed in the marketplace)?
  • What do I stand to lose if the rebranding goes disastrously wrong? (It’s not unheard of, as you’ve read above.)

All the while reminding yourself that while doctors bury their mistakes, advertising and marketing folks (and their clients) spend big bucks to display their mistakes in public.