Top ten reasons for rebranding

Out with the old, in with the new

On average, organisations and brands change their corporate identities once every seven to ten years. This often involves restyling logos, colour palettes, visual language and photographic style. In a small number of cases, the name of the organisation is also changed during this process. Although there is usually one main reason for making a change, the motivation behind a rebrand project is often a combination of several factors. Here is an overview of the ten most common reasons for a corporate rebrand:

1. Mergers, acquisitions and demergers

For the most part, changes of business ownership, such as mergers, acquisitions and demergers, result in an immediate rebrand. The aim here is not only to make the change visible, but also to comply with legal requirements. In the case of demergers, the party that has split off is obliged to develop its own brand. This makes it clear that it no longer forms part of the organisation. When it comes to mergers and acquisitions there are several possibilities; the new company may develop a completely new brand, or as with other cases, the name of one of the parties is used. Two examples from our own practice include the Swedish company, Vattenfall, who took over Nuon (a Dutch company) a few years ago. They changed their brand name and corporate identity from Nuon to Vattenfall where positioning the brand identity in the correct way became of great importance. Another example is Nouryon, who recently adopted a completely new brand name and brand identity, following its demerger from Akzo Nobel.

2. Repositioning

If implemented properly, a change to the brand positioning and brand promise of a company can have major consequences for the organisation. Everything is adapted in line with the organisation’s new strategy and promise; its products or services, HR policy, customer contact, corporate identity etc. Rebranding makes this change visible for all stakeholders. An example is the lingerie brand Hunkemöller that had a solid, but also an old-fashioned image. To be considered more as a ‘high-end’ fashion brand, Hunkmöller carried out a thorough rebrand.

3. Internationalisation

In some cases, a change is necessary so that a brand can also be used internationally. This may be because the brand name is specific to a particular country. In certain countries a brand name may also conjure up the wrong associations. Organisations that sell the same products in several countries, but under different brand names, are also increasingly opting to use one international brand. Famous examples of this include the rebrand of Jif to Cif, Smiths to Lay’s, Raider to Twix and Postbank (which was only used in the Netherlands) to ING (a brand that is used internationally).

4. Changing markets

For some companies, changes in a market situation mean that their very existence comes under threat. The digitisation of society, in particular, is making it necessary for certain sectors to reinvent themselves. Different requirements call for different products. Some fashion brands have closed their physical stores to only sell clothes online, and websites like Amazon.com have evolved incredibly over the last few years by becoming a completely digital department store.

5. Bad reputation

An environmental scandal, hidden data breach or a lawsuit can all be reasons that lead to a bad reputation. In some cases, such a bad reputation can have serious impact on a company’s results. A rebrand can, after time, reduce or even eliminate negative associations with a brand. What’s important here is that not only the ‘exterior’ changes, but that the change is also implemented through all other aspects of an organisation. With the current need for transparency, people are able to see through cosmetic changes and want to see a real change in approach or brand promise within an organisation. This is the only way that a rebrand project can remove any negative associations with the brand and therefore be successful.

6. Conflict with stakeholders

Developing a brand may in itself also lead to a rebrand. This may be because the new style is too similar to an existing brand. Such a situation was faced by Multimate (a Dutch construction company), which, following its rebrand, lost a lawsuit against IKEA as the two brands had become too similar. Multimate had to make sure that its logo was removed from visibility, across any touchpoint, within a period of six months. Another reason is that a rebrand can sometimes be negatively received by internal and external stakeholders is that it stands in the way of the organisation’s success. International clothing company, Gap, decided within the space of a week that it would revert back to its old logo after all.

7. New CEO

A new CEO often brings a new lease of life to an organisation. This may result in major organisational changes that also influence the course of the company. In the case of Apple, and following the return of Steve Jobs in 1997, the business realised it had to change to survive. Jobs himself took the responsibility of choosing a new logo, one which went from a rainbow-coloured apple to a more modern metallic variant.

8. Outdated image

One of the most common reasons for undertaking a corporate rebrand project is modernisation. Trends mean that over time brands can come across as old-fashioned if they have not been updated. In the past, brands were often created in a more sleek design with primary colours and lots of grey. Now, designs are moving towards more use of colour and shapes. Although in many cases it is not the main reason, a more modern image is often one of the motivations behind a rebrand project.

9. Digitalisation

More recently, digitisation is becoming a main driver for brand and logo change. In the past, brands were developed at the time that ‘digital’ played a limited in brand application and a corporate identity mainly consisted of a logo, a primary colour palette and typography created for offline expressions. Now, companies such as Volkswagen which, following its new mobility strategy, have launched a renewed logo and new visual identity that fits better into the current digital age.

10. Saving costs and increasing business returns

Many organisations are faced with acquisitions/mergers with other brands, meaning that new services/products are often marketed under different brands. A decision that seemed like a good idea at the time, can lead to a complex brand portfolio in the long run, which means confusion from for consumers and stakeholders alike. Moreover, running an extensive brand portfolio often results in high costs for maintenance and promotion. In practice, we are seeing many brands move back to one strong monolithic brand. Returning to simplicity can save costs and increase business returns. Through a rebrand, an organisation can concentrate on the true essence of the company and coordinate its extensive brand portfolio to a smaller, simpler one.

To rebrand or not?

In addition to the most common reasons for rebranding described above, there are a multitude of reasons to change a brand. Whatever the reasons may be, it is important to make the right choice. A rebrand can have many benefits but can also bring various risks. Added to this, you may have to convince important stakeholders in your organisation to opt for a rebrand. In practice, we often see brand owners may struggle to produce a business case which supports a rebrand. Make sure that you are well prepared by setting out any arguments clearly to help you make a decision that is fully supported by all parties.