Companies usually seek to "re-brand" when poor customer service, lack of quality, dated offerings or other issue cause customers to defect.
The re-branding initiative should look at the causes of customer defection. Why do customers feel like they are no longer receiving economic, experiential or emotional value from the company? What can the company do to better deliver value? How can customer service or quality be reformed to meet customer standards?
But instead of attacking the reasons for customer loss, companies too often turn to a silver-bullet of re-branding, complete with a new logo. They must believe, as one graphic designer claims, "In the past it has been found that many under performing companies had started performing exceedingly well after they went through a logo makeover." Landor Associates is infamous for dreaming up a new logo and calling it "branding."
Rebranding failures are legion. British Steel changed its name to Corus, complete with new logo, but that didn't stop its sale to the Indian group Tata. Xerox introduced a new logo in January, but that didn't keep the company's stock from falling almost 15% since then. The British Royal Mail spent £500,000 on branding consultants who recommended rebranding to company to Consignia. The new name was so poorly received that Royal Mail had to revive their old name.
Or how about this. Four years ago, Cingular bought AT&T Wireless. AT&T had become synonomous with pull-your-hair-out poor service, so Cingular dropped the AT&T name. But now, for reasons only the so-called brand consultant advising Cingular can explain, Cingular Wireless is now being rebranded as AT&T Wireless. No doubt customers would have preferred more money being put into operations instead of being wasted on rebranding. Of the six largest cell-phone carriers, AT&T Wireless generated the most complaints overall and the most complaints per subscriber last year, according to the FCC.
Logo redesigns for the sake of rebranding can also lead to unintended consequences, such as this £14,000 logo produced for the Office of Government Commerce in UK, which has made it the butt of Internet sexual jokes.
Sometimes, name changes, along with new logos, become necessary when companies are purchased or when changing technologies make names obsolete. (The Carphone Warehouse is a strong candidate here). But, in general, spend your rebranding budget where it really counts – providing value to your customers – and let your competitors waste money with the snakeoil logo salesmen.
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