Pros and Cons: Does Your Brand Really Need a New Name?
12. Dezember 2022 ▪ Reading time: approx. 9:50 min.
Wenn ein Markenname ein Problem auf der Beschreibungsebene hat und man deswegen über seine Änderung nachdenkt, fördert dies das eigentliche Problem zutage – seine Bedeutungslosigkeit.
In our daily work at BrandTrust, we are often faced with the following situation: Something in the company is not going as smoothly as it should. Management is quick to question the brand name. Is it still up to date? Shouldn't it sound more current and modern?
With this article, we want to help you make that decision: We'll give you hints on when a rebranding should be preferred over a repositioning – and when you should stay away from it. Compared to advertising or design agencies who earn a lot of money with rebranding projects, we as a strategy consultancy can afford to approach the subject a bit more objectively.
A brand name doesn't have to please everybody.
To start, let's define what the purpose of a brand name is – apart from its labeling function: The brand name is NOT primarily intended to describe what the brand does. And above all, it does not need to please everybody. A brand that aims to attract as many people as possible ultimately only reaches very few.
The meaning of the brand name is the key.
What is more important for the success of a brand is that the meaning of the brand name is defined and managed. What is its significance? It is what differentiates a brand from a mere name. All brand management decisions should be made with this in mind – and not based on current, tactical or aesthetic considerations.
Brand names which would be considered a failure by aesthetic standards, for instance, can still be significant for their target groups. That is exactly where they draw their energy to attract. A typical example is that of acronyms, meaning brand names consisting only of two or three letters: DM, BMW, 3M, OBI, GE, KIK, ZF or IBM. In terms of descriptive value, a couple of letters have no effect, and often they are also difficult to pronounce. At the level of meaning, however, they open the door to an enormous range of experiences, associations and connotations.
So, if a brand name presents a problem at the descriptive level and you are thinking of changing it because of that problem, this sheds light on the underlying issue – that it is essentially meaningless.
The problem is not solved at the same level it arises.
Companies are often prompted to think about a new brand name by tactical considerations: They want to rejuvenate the brand, the revenue earned by the brand is dropping, a national market seeks the reason for dwindling sales in the difficult pronunciation of the brand name, the fact that it seems foreign, or similar issues.
But all these are merely symptoms indicating a deeper cause: If the brand appears too old, it has been neglected for too long. The company found its positioning and then stuck with it for too long. If revenue is slumping, it is often due to a lack of innovation, or price perception was placed above value perception.
If a national operation ascribes the cause for poor performance to the brand name, it is often because the marketing was not properly localized, and the communication was not sufficiently adapted. Because a foreign feel is more likely to be an advantage if it is thought through consistently and managed accordingly.
This would be a capital mistake: to hastily battle the symptom that is visible at the surface instead of looking for the underlying causes at the deeper levels.
The time and investment needed for effective rebranding are underestimated 90 % of the time.
Most rebranding projects live on the hopes that everything will be better, newer, fresher and more surprising. But above all, they keep a lot of employees busy, who sometimes enjoy it a lot more than taking care of their complicated everyday work.
On the costs side, there is much to be considered. When the brand name changes, literally everything else changes. Everything has to be taken in hand and reworked. Once that is done, the company is exactly where the old brand was already. In terms of results, you have expended a great deal of effort to catch up to it at best, but you are a long way from having surpassed it.
The new brand first has to prove itself. To become effective, it needs more work, time and money. This is the point where many rebranding projects grind to a halt.
All logos, office supplies, flags outside the building and digital formats have been updated and because of all that work, you have completely forgotten why the rebranding was launched in the first place: to reach a strategically more advantageous position. Giving the fancy new logo and the new brand name a new meaning – that part is only starting now.
Brands store energy.
We are often asked why we at BrandTrust are so touchy when it comes to rebranding projects. There is a simple reason: We see brand names not as mere labels, but as energy storage.
A well-managed brand accumulates performance energy over the course of decades. This energy, if used and expressed well, produces the attraction that makes a brand a superior economic asset. It you change the brand name; you cut your access to this field of energy and start over from zero.
These are the 8 reasons in favor of a rebranding:
- When the meaning of the name no longer fits the performance or even contradicts it.
Especially with mono brands or one-product companies, it can happen over time that performance and meaning drift apart. The meaning of the name blocks the development of the brand. This is what happened to the temp agency Studitemps, which is placing more and more university graduates. These graduates disliked the prefix "Studi". Now the agency calls itself Jobvalley.
- When a repositioning takes longer and costs more than a rebranding.
Repositioning essentially means replacing existing beliefs and preconceptions with new ones. Learning takes time, re-learning takes even more time. It's a matter of years rather than months to get people to drop ingrained beliefs and preconceived ideas. In such cases, a rebranding can trigger a kind of shock wave that wipes out learned patters more quickly than a repositioning strategy could.
Facebook absorbed all the negative preconception patterns and experiences from the product
level at the group level, which is why it became more and more difficult to place their corporate stories at the investor and employee level. This led to the decision to uncouple the brand name at the product and group level – Facebook was renamed Meta.
- When future becomes more important than origin – as with a new business model.
In agile times, business models can change drastically. Sales channels collapse, product lines become incompatible with social trends, and revenue flow ebbs substantially. A new business model means a radical change in strategy and the brand's history is more likely to be an obstacle than an asset on the road to the future. In this case, it can make sense to express the inner transformation through the strongest possible signal – changing the brand name.
- When a new corporate culture has to be created, as after a merger.
This is an issue that comes up nearly exclusively in corporate branding but is all the more important: Because brand names also come with company cultures which, especially after a merger, identify strongly with "their" brand.
When two companies merge into one, continuing with just one brand would cause an imbalance or express a winner/loser mentality. When a new brand name can't be created by combining the original brands (for example LVMH Louis Vuitton Moet Hennessy), a third alternative is to operate under a new brand name in the future. This is a diplomatic solution and can mark a new start without a lot of baggage. One example is the merger of the Schweizerische Bankgesellschaft and the Schweizerische Bankverein into UBS.
- When a scandal of significant magnitude and/or duration has done irreparable damage to the old name.
Brands are very robust structures. Once they are fully formed and established with the customers, they can withstand much without suffering permanent damage. Mistakes, scandals and failures can't always be avoided.
But what can definitely be avoided is inappropriate handling of such events. This is where the biggest mistakes are made, for instance by covering up the problem, delaying the solution, approaching it from the wrong angle or putting it off. This can damage a brand to its core and changing the name can become inevitable. This is how "the most hated company in Switzerland", the cable provider Cablecom, became UPC.
- When the brand rights cannot be defended sufficiently.
It is really a routine question in a brand analysis, but we are surprised time and again how weakly – if at all – the brand of a company, in which a lot of money is invested every day, is protected.
Especially hastily founded digital companies often experience a moment of shock after a few months when cease and desist orders show up. But even well-established companies sometimes neglect to thoroughly research the brand rights in the countries and regions around the world where they do business. Such disputes ALWAYS cost a lot of money and time, and their outcomes are highly uncertain. Especially for young brands, it can be cheaper to cut their losses early and switch to a new, better protected brand name.
- When the name is easily mistaken for that of a direct or indirect competitor.
The finance brands BlackRock and Blackstone are an example of this situation: Even experts continually confuse the brands, because of their similarity including generic name components and because they work in similar market segments.
Sometimes this is done on purpose, as when younger brands want to piggy-back on the reputation of older brands working in similar fields. However, such cases are well protected by brand law and can be decided relatively quickly.
The most famous example shows how unmistakable, downright magical brand names can come to be: The Porsche sports car introduced in 1964 was originally called Porsche 901 – until a warning was issued by Peugeot, reminding the German automaker that all three-digit model designations with a zero in the middle are copyrighted by Peugeot. And that is how the world's most iconic sports car brand in the world was born - the Porsche 911.
- When undesired associations with strategic impact have developed.
The world is changing, and the changes are happening faster all the time. Values and issues change, sometimes over night, and it is possible that a desired cluster of associations embedded in the brand name becomes a problem for the brand. Just ask any company that has the element "Mohr" (moor) in their brand name, such as Mohren Brauerei, Mohrenapotheke and similar names. What used to be a metaphor for distant exotic lands and worldliness has now become a racist term.
These are the 8 reasons against a rebranding:
- Negative headlines or shitstorms that will have passed in a few days/weeks/months.
Companies often ask us in the heat of battle to give them a quick recommendation for a name change, because there is a shitstorm raging against their brand. We always advise them to counter with professional crisis PR and to do whatever they can to mitigate the causes and their scandalization as quickly as possible. If they do so and thus add no new fuel to the original cause, the negative headlines usually peter out as quickly as they arose, and they just have to wait for the next scandal to come along.
- When the descriptive part of the brand name no longer applies.
Descriptive brand names are always tempting because they promise a shortcut to the desired market position. If the brand name already conveys what you do or offer, you save on advertising budgets. At least in theory.
In practice, however, this assumption only holds true during the early days of a brand. Once the brand has reached a certain level of maturity, the descriptive part of the brand name prevents brand expansion. It makes it more difficult to branch out into new product areas or conquer new market segments.
This happens especially when the brand name has not yet made the transition from the descriptive level to the meaning level. Then companies try to take another shortcut like the first one: Instead of a clear brand positioning and a consistent brand strategy, they seek salvation in a new name.
- When the brand name is hard to pronounce.
One of the most common reasons to change a brand name is that it is difficult or impossible to pronounce for a certain language group. But that same reason also shows that some companies think their own brand name is meaningless.
Often, the root of the issue lies in the internationalization of the brand and the associated confrontation with other language areas. However, we have rarely observed French companies losing sleep over the pronunciation of their French brand names in the German-speaking region (Bouygues, or "La vie est belle" by Lancôme). The same goes for Italian or Scandinavian brand names like Ermenegildo Zegna or Häagen Dasz.
Difficulties with pronunciation is an issue that can hinder sales somewhat, but at the same times the distinctiveness of such a name also often strengthens the brand's positioning options.
- When the brand name is not understood.
Brands work through meaning, which is why the descriptive part of a brand name is not relevant long term and thus the comprehension question isn't relevant. Instead of worrying about whether people understand the brand name, you should spend time thinking about how you can give meaning to your brand.
If the folks responsible for the world's most valuable corporate brand had cared whether their brand name is understood, Apple would now be the world's largest producer of apples and not the most valuable technology company.
- When someone doesn't like the brand name.
A new executive, a new head of marketing, or outside influencers – and not everyone likes the name. What to do? The best option: nothing at all, because an effective brand system is greater, more lasting and more important than all those who have the privilege to work with it for a few years. The potential destruction of value brought on by rebranding projects cannot be justified by any discussion about personal tastes.
- When the stronger party in a merger wants to flex their muscles.
Power plays are always just that, power plays, and the new lion and leader of the pack kills the young of the old lion. You expend a huge amount of goodwill to buy a brand, and then you destroy it. Owners can do it, as it is their company, and they are responsible for it. A representative of the owners, such as the CEO of a corporation, can't.
- When you want to rejuvenate the brand.
Here again, the question is whether a new name is supposed to represent a shortcut to success after having neglected the brand for years. There is a rule of thumb: The time it took to get the brand to where it is now, that's how long it will take to elevate it to a new level.
A brand must always be kept up to date. With every activity, it must unite its origin and its future within itself and be relevant for today's customers. Red Bull has perfected this process. Every generation, once it has been won over for the brand, is retained and the following generations are added. This is the explanation for their many years of unflagging successful growth.
The core task of all brand managers is to retain customers once they have been acquired and at the same time remain attractive to new ones. If you do this, and do it well, you don't have to think about rejuvenation.
- When you want to erase outdated associations.
Echt Kölnisch Wasser – "Eau de Cologne" – a category description, THE synonym for fragrances, and surely hopelessly outdated in one way or another. But is that because of the name or its brand management?
Of course, it all smells of a long-gone era, but can this be solved by cutting all ties to the origin of a brand? Tradition is not a business model, but tradition can certainly be a reliable safe harbor in a volatile, excitable world if you envision your brand over and over again as a solution to current problems.
Tabac Original of 1951 is a beautiful example of how to remain one of the most successful fragrance brands despite double baggage (age and the term Tabac).
And now, about the most important question of all:
To conclude, we want to address the sixty-thousand-dollar question when it comes to rebranding: What was the story with Raider and Twix? The reason was simple and is still common today: international alignment, meaning the adaptation of national brands to an internationally applicable template to save on costs, achieve faster market penetration and curb national lone wolf campaigns. In 1991, the year of the renaming, the media and communication landscape could still be reworked easily and with comparatively low expenditure.
At the time, it was also possible to forcibly "impose" a new name. This no longer works in a digital media world, as Procter & Gamble found out in 2000. They wanted to change the brand Fairy Ultra to Dawn – for the same reasons that led to the renaming of Raider – and had to turn back to the old brand Fairy Ultra in 2003 after sales dropped drastically.
Do you have any questions or suggestions regarding this article? Then we look forward to receiving your e-mail.