Three myths about rebranding

Olga Kazaka, A.W.Olsen & Partners partner, lector of the University of Latvia

Periodically, in the public space, there are news of a particular company’s rebranding. In this matter, my attention is most attracted to how often the companies themselves misunderstand the concept, process and consequences of rebranding.

1. The most important thing in the rebranding process is to update the logo?

Quite often, advising entrepreneurs I have heard the opinion that rebranding involves mainly logo transformation. However, in reality it is only transformation of corporate identity, no more.
In its turn, rebranding involves major changes in the organization. Often this is due to the dramatic changes in internal processes, the introduction of new values or positioning, targeting new business niches. An important function of rebranding is signaling to internal and external audiences about important changes in the organization. Logo change or transformation may be one of the last, though most noticeable for consumers of change.

However, there are cases when in the process of rebranding the logo is not affected at all. So it was with Old Spice, which changed not the logo, but its positioning. Nike have used the logo from the ‘70s, while several times have been changing the positioning.

2. Is it pure communicators’ competence to take care about the brand?

The second stereotype that I encounter from time to time is related to the opinion that rebranding only refers to the competence of communication specialists. Or vice versa – there are significant changes in the organization, which the management board mistakenly do not connect with the brand and for this reason do not attract communicators. Nevertheless, brand transformation is one of the most important process when it is important to combine the competence of management and communicators.

Wrong communication of rebranding may cause problems for the organization. There may be rumors, unreasonable information about the problems in the company, employees’ dissatisfaction due to uncertainty, outflow of customers. The other extreme is the situation where management do not understand the rebranding process, considering this to be the task of the communication department. I would compare it with trying to glue beautiful wallpaper in a house where walls are to collapse and at every moment the wiring can catch fire. Not only communicators should be maximally involved in the rebranding process but the management too (ideally, the idea of rebranding should be proposed by the management), as well as all other departments.

3. Do we need to be afraid of the outflow of customers?

Changing the positioning, you can get a new segment of customers, for example, more solvent, or more massive, which can positively affect the financial performance of the organization.
One of the side effects of this process may be the loss of a certain group of consumers, as the brand will no longer correspond to their values or financial level. However, if this is a strategic decision, this should not be feared. For example, moving from the mass market to positioning in the premium segment, the brand can organically sacrifice customers who will not be able to afford a new product from now on. Conversely, when entering the mass market, exclusive brands risk losing a wealthy audience who will no longer feel themselves sufficiently privileged, but at the same time start earning money because of the “long tail”. Another alternative is to reduce this risk by developing a separate brand for another pricing policy. So, Miu Miu began as a cheap line of fashion brand Prada.

However, if the process of change is not understood by clients, its reasons and how it affects themselves, there is a risk that important for the organization customers will turn to competitors who will all seem clearer and more stable. Therefore, throughout the rebranding process, systematic explanatory work with employees and clients is important. By the way, employees can become good messengers of change. Close friends trust them, informally asking what actually is happening in the organization. Therefore, if they can clearly and simply tell about the essence of change, official information will be disseminated more successfully and naturally. Therefore, do not underestimate the importance of internal communication in this process.