Brand MarketingFebruary 4, 2021

5 Major Reasons Why Rebranding Often Fails

February 4, 2021
Lavender Nguyen
Marketing Content Creator

Numerous factors can cause rebranding to fail. The biggest problem we’ve observed is not doing enough research: companies are so focused on planning the design and promotion of the new brand that they cut corners, or even neglect, market research.

However, poor or inadequate market research isn’t the only thing you have to watch out for when planning your rebrand. There are four other frequently fatal flaws that can sabotage your rebrand:

  1. Underestimating the role of packaging

  2. Rebranding just to get attention

  3. Focusing too much on the logo

  4. A name change when it isn’t needed

To be sure you don’t come into harm when carrying out your rebrand, we’ll explain how you can avoid making mistakes, and also provide examples of rebranding gone wrong to show you the danger lurking in the dark.

5 Major Reasons Why Rebranding Often Fails

Flaw 1. Failing to do enough research

Before changing anything about your brand, you must carry out extensive research on what might and might not work for you.

Think of it this way: done right, a rebrand can breathe new life into a business, sparking growth and a wave of customer enthusiasm. But if poorly executed and not in line with consumers’ view of the brand, such changes can also have a detrimental effect and put the brand at a huge risk.

Do your research and do it well.

Analyze your industry, target market, and competitors. Run focus groups or use a brand tracking platform to measure current brand perception and the impact of a rebrand on customers’ existing attitudes and feelings. This is especially useful for established or well-known brands as people already have an emotional set of associations with them.

Extensive research will also ensure that you don’t make any cultural faux pas. Let’s take a look at the Convertkit rebranding case to understand why doing thorough research is so much more important than you can imagine.

Mini Case Study: Convertkit

In July 2018, Convertkit announced its rebrand to “Seva,” as a result of “behind-the-scenes work for two years”. This included purchasing the domain seva.com for $310,000.

ConvertKit decided to rebrand with good intentions. The name “Seva” was inspired by the Sanskrit word meaning “selfless service”—a core value within the business and company culture.

ConvertKit doesn’t capture the mission we’re on to serve you. We needed a new name. Something that captures how much we care about you and how much you care about surviving your audience. Seva is the future of how we’re building this company”, said Nathan Barry, founder of ConvertKit.

But what they didn’t know at that time was that Seva doesn’t just mean “selfless service.” It is also a holy and sacred practice that involves giving generously to others out of love, tied so deeply to spirituality that it cannot be separated from spirituality itself. So, while some users were supportive of the rebrand, many others felt hurt by ConvertKit’s use of Seva.

ConvertKit reacted by speaking with someone who had practiced Seva as part of his religion his entire life. The company initially wanted to find a way to proceed with the name but then decided to stop has the realized the change would ultimately be more harmful to their brand image.

I loved the name because it meant selfless service. Putting others' needs ahead of your own. Giving without the expectation of anything in return. I believe businesses can be a force for good and felt Seva represented that. But in that moment I realized that if we wanted to live out even the smallest amount of what Seva means, we would give back the name and become ConvertKit again” - Nathan Barry, founder of ConvertKit.

Flaw 2. Underestimating the role of packaging in branding

Your packaging plays an important role in telling customers what your product is, what your brand stands for, and why you’re different. It may be the most impactful touchpoint in your marketing arsenal because customers can develop an emotional bond with it.

In a study, researchers found a positive correlation between liking towards taste and packaging. Every element of packaging aroused different emotions in participants’ minds and how they perceived products’ taste based on those feelings.

According to an Ipsos poll, 72% of Americans agree that the design of a product’s packaging influences their product selection. Many feel excited and pleased with items having elegant and beautiful packaging. When the shelf is stuffed with many similar products from different brands, eye-catching package can be crucial for a purchase decision.

If you forget to consider what customers feel about your current product packaging and change everything at once, you may create confusion. They may not recognize your product with new packaging and eventually switch to your competitors to get what they want.

Mini Case Study: Tropicana

In 2009, Tropicana decided to rebrand all elements of its well-known orange juice. Its rebranding strategy included simpler packaging for the product, logo design, and a new color pallet. Tropicana invested 35 million dollars in an advertising campaign to promote the new packaging.

Source: The Branding Journal

Tropicana’s new packaging received a lot of criticism from customers, especially on social networks. They complained the new packaging looked too much like a cheap imitation or a generic store brand—not the product they regularly bought.

Two months after launching the new design, Tropicana’s sales dropped by 20%, representing a loss of 30 million dollars. It eventually had to restore the original version of the packaging.

Neil Campbell, president at Tropicana North America in Chicago, explained their rebranding failure:

We underestimated the deep emotional bond . Those consumers are very important to us, so we responded. What we didn’t get was the passion this very loyal small group of consumers has. That wasn’t something that came out in the research.”

Flaw 3. Rebranding for the sake of getting attention

Let’s say you release a new design, let people stew for a few days, generate a ton of publicity, and then announce, “Just kidding, we’re not changing our brand.”

In theory, it can be a good marketing stunt. There’s no such thing as bad publicity, right? But the trade-off is that people, especially those who haven’t used your products, may ultimately harbor negativity toward your brand. This is more likely to happen if your new brand is totally different from your current market position. No one may believe your rebrand, which potentially also makes you lose their trust.

"It is so easy for marketers to forget how serious people take their brands, and so using a fake rebrand as a short-term promotion, while not without upside in getting attention, really undermines the brand’s long-term value”, said Paul Sears, Executive Vice President of Integrated Marketing at Allison+Partners.

There are many ways to make your business go viral. Rebranding isn’t just one of them. To illustrate, let’s look at the International House of Pancakes (IHOP)’s rebranding.

Mini Case Study: IHOP

For over 60 years, IHOP has positioned itself as a breakfast destination for pancakes. In 2018, IHOP teased a name change from IHOP to IHOb—including a dramatic flipping of the “p” in its logo to a “b,” opening the doors to the lunch and dinner markets. The rebrand didn’t include changing its logo, colors, or much of its visual identity.

Source: IHOP Twitter account

IHOP’s tweet caused a viral discussion on social media, drawing both praise for what many saw as a strategic move and criticism for what others saw as a flop or a failed rebrand.

Jason Riis, marketing lecturer at the University of Wharton, said at the time: “People are talking about it, and social media accounts of competitors are weighing in, so there is a lot of earned media for IHOP. The question is: Will all this hype trigger people wanting to try the IHOP burger offering that would not otherwise do so?

Henry C. Boyd, clinical professor of marketing at the University of Maryland, added, “It becomes a bit of a risky campaign where you’re saying, ‘We’re willing to change our name from pancakes to burgers, and yet we didn’t live up to expectations”.

Despite all the buzz around the IHOB tweet, IHOP later reverted to its long-standing name on its 60th birthday. The company confirmed that it faked its name change to IHOB as a publicity stunt to promote its burgers. The rebranding effort didn’t significantly increase its burger sales but many mixed reactions and confusion.

Flaw 4. Focus too much on the logo and story behind it

Everyone knows logos are essential, but a successful rebrand is about more than just the logo. When you put all of your rebranding efforts into just the logo, you’re missing the mark.

A rebrand should represent a fundamental shift in how you position your business and how you’re different than before. Sure, the logo design will be a part of this. But the rationale behind the initiative and the outcome you’re hoping to achieve should be the most important.

Uber’s failure in logo redesign in 2016 left the world some crucial lessons.

Mini Case Study: Uber

In February 2016, Uber unveiled a new logo featuring an image that is called the “atom and bit.” The company argued that its new look would “provide consistency, highlight information, and make our brand easy to recognize.”

Source: Fortune

But according to Alexander Chernev, professor at Kellogg School of Management at Northwestern University, Uber’s logo was a mistake. The story of bits and atoms might be true in theory, but it’s “just too abstract for customers who know Uber for its primary function: efficient and reliable transportation.”

Chernev also added, “ the new Uber icon falls short on all these criteria. Unlike the original logo, the new logo is not instantly identifiable with Uber; it could as well be a logo of a computer, communication, chemical, or biotech company. Furthermore, its overall design—a square inside of a circle/hexagon — is not distinct, resembling many other logos and app icons . Then, there’s the issue of whether the new logo creates meaningful associations in the minds of Uber’s customers.”

People didn’t like this Uber logo. Many didn’t even understand the story behind it. Peter Markatos, Former Director of Brand at Uber, admitted that “we weren’t achieving that with our current system. It doesn’t make sense to build more equity into something that people don’t understand.” However, it wasn’t until two years later that Uber changed this logo to the latest one—a wordmark.

Flaw 5. Change name when the change isn’t needed

A rebrand often comes with renaming the brand, which can cost you brand recognition and branded search traffic if done wrongly.

Naming is an art form. Your new name should tell an important story about your company, why you want to change, how it benefits target audiences, and where the change leads you.

So, if you want to rename your company or a product, ensure you have the right reason and a plan for recovery as part of your post-rebrand strategy. Otherwise, you may face a lot of trouble.

Mini Case Study: Pizza Hut

In 2009, Pizza Hut planned to expand its online and mobile businesses. In the effort of doing that, the company introduced a new logo, “The Hut,” which it called “the perfect icon for our mobile generation.”

We're also introducing another vocabulary word with Pizza Hut, which is 'The Hut.' That ties in nicely with today's texting generation. We wanted to make sure that Pizza Hut and 'The Hut' become common vernacular for our brand. Red is our mark and when you see that red roof, people will refer to it as 'The Hut' or 'Pizza Hut”, said Brian Niccol, Former CMO at Pizza Hut.

Pause to think about “The Hut.” Pizza Hut dropped the most important part of its brand identity (a.k.a “Pizza”), turning the rest of its brand into a question mark: What exactly should customers expect from "The Hut?” This unnecessary move created laughter from the media and scorn from the public, forcing the company to revert to its original name.

Final thoughts

It can be a challenging journey to have a successful rebrand. You might need to spend years and millions of dollars doing research and devising a sure-fire rebrand strategy. But after all, it’s worth it because you’ll avoid all the mistakes above that might cost you much more otherwise.

Solving the first problem, i.e., conducting extensive market research, is often the way to do a rebrand right. Other flaws are largely matters of understanding brand identity: If Tropicana, Uber, Pizza Hut, and IHOP were aware of the emotional bond that their customers had with their original design, they might haven’t changed their packaging, logo, and name.

Companies must be aware of their current market position, brand loyalty, and customer perception early on, thus gaining valuable insights that can help steer a rebrand or, if necessary, abort it. Hearing opposing opinions can be painful—but not as painful as rebranding that gets loyal customers confused or has no positive outcomes at all.

If you would like more information on how to successfully rebrand, download a free copy of The Ultimate Guide to Rebranding.

Brand Marketing

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