Co-founder of CEO Advice Guru, LLC. Best-selling author of The Private Equity Playbook and The Exit-Strategy Playbook.
The issue of rebranding and renaming often comes up in my conversations with my clients. This is no surprise as a brand is fundamental to a company’s success.
But when is the right time to rebrand? And how can you do that? To help you unravel those questions, I’d like to share with you some advice I give to my coaching clients.
The power of a name
Before we get into it, I want to be very clear: if the idea of rebranding is hard to swallow, you’re not alone. Many leaders struggle with the idea. However, often a brand refresh, usually accompanied by a name change, can be just what is needed to help a company better connect with its customers.
There are of course exceptions to this. Take Coca Cola for example. In 1985, the company discontinued its classic formula in favor of “New Coke.” It was a rebrand disaster– perhaps one of the worst of all time.
People loved coke. In fact, they loved it so much that the name of the product had come to represent the soda itself for certain regions. And as the company found out, making changes to something so well known and loved was a bad idea.
When a brand becomes representative of a product or industry (think Coke, Kleenex or Q-Tips), changing it can do a lot of harm. But for almost everyone, rebranding is often a good idea.
When rebranding makes sense
During my 21-year career as a CEO, I’ve bought 58 companies and built three – and renamed them all. Admittedly, this was often difficult for the previous owners to accept. They often care about the names of their companies and assume that their customers will too. In all cases, however, the rebranding was less disruptive and more beneficial than they imagined.
A perfect example of this was a company called Web Service Co., a coin-operated laundromat. A man and his wife started it in the 1940s; they had tried and tried to come up with a unique name, but every name they chose was taken. In the end, they decided to go with the husband’s initials – WEB – and Web Service Co. was born.
Then came the internet. Suddenly ‘web’ meant something very specific and something that had nothing to do with laundry. When I came in as CEO, I felt we should change the name to something more representative of what the company did.
The owners feared that if they changed the name, 60 years of brand value would go up in smoke – that it would be the wax equivalent of New Coke. Eventually the founders left the company in conjunction with the advent of private equity and we changed the name from Web Service Co. in WASH Multifamily Laundry Systems.
Aware of their fears about the potential repercussions, we set up a call center and developed scripts to guide our representatives in talking to customers about the rebrand. We were ready for the hordes of angry people who would lash out at us for changing the name. But in the end, do you know how many people called to complain or even to discuss the name change? Zero.
Re-imagine who you are
This illustrates an important lesson: You may have a sentimental connection to your brand, but your customers don’t necessarily have to. And when your business name detracts from your value and confuses people (such as a laundry company called Web Service Co.), it’s time to switch things up.
However, that’s not the only reason to consider a brand refresh. If your company’s reputation has been tarnished and part of your potential customer base views your organization in a negative light, a name change may be in order.
In cases like this, your company has what I call a “damaged brand.” It’s not that the name itself is misleading or confusing, but they are damaged goods. By renaming the company, you can reintroduce your organization and thereby change people’s perception.
Many of you reading this may be thinking, “My company name clearly describes what we do, and my brand has not been damaged. I guess I don’t need to rebrand! Not so fast. Even if your name is clear and your reputation is good, a rebrand may still be in order. This is especially true if your sales are lagging or if you’re not hitting your numbers. In those cases, reimagining who you are and then sharing your new and improved brand with the world could be the kickstart your business needs.
The bottom line: Don’t fall into the trap of becoming overly attached to your name or your brand. Be prepared to twist, refresh, and shake things up. For optimal results, don’t wait for your brand to falter either. Periodic rebranding can keep your organization fresh and relevant.
Finally, when you refresh, be mindful of it. Put the time and effort into making sure your new name and brand will appeal to all your stakeholders.
Given how important this is, I don’t recommend leaving it to chance. Instead, reach out to peer groups or hire a CEO coach to help you objectively decide if you need a refresh. Then work with a professional marketing agency that specializes in branding to think about exactly what your brand needs to create the kind of impact you want.
Whether your brand is confusing, damaged, underperforming or simply outdated, a well-executed refresh can ultimately reinvent and revitalize your business. And by revitalizing your organization, it can help you overcome the stagnation that is almost certain to otherwise occur.