In recent years, there has been a massive increase in the number of companies choosing to re-name and rebrand themselves. Why? Perhaps, because there is more focus and a higher awareness of brand management and its value as a means of improving image penetration, business performance and company value. But is it always the right choice? Understanding why and when to rebrand is essential to the efficacy of the process.

A whopping 96% of Coca Cola’s stock market value is attributable to intangible assets i.e. goodwill, patents, trademarks and corporate identity. That’s $150 billion worth of brand. It may seem an extreme example, but it does show how much value a strong identity can add to a company’s worth. Coca Cola learned a short sharp lesson about both the value and the vulnerability of their brand in 1985 when they introduced New Coke. The success of that particular extreme makeover is neatly expressed by the sheepish re-introduction of Coke Classic three months later… Since then they have chosen a subtle, evolutionary approach to their brand development which has worked well.

Besides offering a means of generating sustained growth, enabling companies to charge a premium, and being a source of staff morale and pride, brands can also assist a company to resist or bounce back from competitor attack. Strong brands have also shown their true value in their ability for extension – the ubiquitous Virgin being one of the best examples of this.

A rebrand can take the form of change to the identity, position or execution of a brand. It can include a new logo, the instigation of a new marketing mix, even a new name. However, it needn’t be extreme – a rebranding exercise should rejuvenate, refresh and reinforce a company’s image and reputation.

Only do it if there’s a genuine need. Rebranding can be expensive and potentially damaging if done badly or needlessly, and the process is inevitably disruptive to business. Abbey’s yo-yo approach to branding over the past couple of years cost the company dearly both financially and in terms of credibility. Rebranding can, however, have spectacular results and be an invigorating as opposed to painful process if handled by an experienced and specialist change agent.

The need for rebranding must be based on the premise that something has changed in the business mix that dictates a need for evolving the brand. It must also be based on the basic premise that just as people change the style of their clothes, the look of their hairstyles and their home decoration, so brands need to keep up with the times – the changing market and consumer dynamics. Failure to recognise this and move with the times can lead to brand stagnation and brand latency.

There are many sound reasons to rebrand:

• To keep up with the times and keep pace with changing consumer needs (e.g. services, accessibility, convenience, choice, fashion, technology)
• Because a brand has become old-fashioned and is in danger of stagnation or is already in a state of erosion.
• Due to fierce competition or a fast-changing environment.
• As a means of blocking or outmanoeuvring competitors, or a way of handling increased price competitiveness.
• As a result of globalisation (e.g. Marathon’s change to Snickers in the UK between 1988 and 1990)
• As a result of mergers and acquisitions (e.g. Health & Racquet Club’s change to Virgin Active in 2001).
• In order to generally improve a brand’s competitiveness by creating a common sense of purpose and unified identity, building staff morale and pride, as well as a way of attracting the best talent or even a way of testing new markets or products.
• To decrease business development and operation costs, or as a way of countering declining profitability or consumer confidence.
• To capitalise on new opportunities or innovative mediums such as the Internet.

The key to rebranding is how this art can be used for the benefit of building your business and profits. Whatever you do, be careful not to undermine the fundamental values and strengths of your existing brand, and be sure that the changes you do make are in sync with your business rationale and aims. Consult and involve your core customers and key stakeholders (staff especially) in the process and retain the emotional ties between your brand and its supporters.

The most crucial thing – engage the services of a specialist branding consultant with a proven track record, to help you ring the changes smoothly, successfully, creatively and profitably.