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Brand MarketingFebruary 4, 2021

5 Major Reasons Why Rebranding Often Fails in 2022

February 4, 2021
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Lavender Nguyen
Marketing Content Creator

Numerous factors can cause rebranding to fail. But far and away the biggest problem we’ve identified is not doing enough research. Companies are so focused on planning the design and promotion of their new brand that they cut corners and 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 five fatal flaws that can sabotage your rebrand:

  1. Failing to conduct adequate research

  2. Underestimating the role of brand packaging

  3. Rebranding just to get attention

  4. Focusing too much on the logo

  5. A name change when it isn’t needed

To keep your brand out of harm's way when carrying out a rebrand, we’ll explain how you can avoid making these mistakes — as well as provide examples of rebranding gone wrong to show you what not to do in 2022.

5 Major Reasons Why Rebranding Often Fails in 2022

Flaw 1: Failing to conduct adequate 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 consumer 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 your brand at a huge risk.

Do your research, and do it well.

Analyze your industry, target market, and competitors. Run focus groups or use brand monitoring software 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 for 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 one could ever imagine.

Mini Case Study: Convertkit

Source: Covertkit Press Kit

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

Nathan Barry, the Founder of ConvertKit, explained:

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."

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 the word Seva.

ConvertKit reacted by speaking with someone who had practiced Seva as part of their religion their entire life. Initially, the company wanted to find a way to proceed with the name — but eventually decided to stop, as they realized the change would ultimately be more harmful to their brand image.

Barry went on to explain:

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."

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 from the National Library of Medicine, researchers found a positive correlation between liking towards both taste and packaging. Every element of packaging aroused different emotions in participants’ minds and how they perceived products’ taste were 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 by items that have elegant and beautiful packaging. Remember, when the shelf is overflowing with similar products from different brands, eye-catching packaging can be crucial when making 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, may switch to your competitors to get what they want.

Mini Case Study: Tropicana

Source: The Branding Journal

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 in an advertising campaign to promote the new packaging.

However, 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. The brand eventually had to restore its original version of the packaging.

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

We underestimated the deep emotional bond (they had with the original packaging). 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 could 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.

Paul Sears, the Executive Vice President of Integrated Marketing at Allison+Partners, told PRWeek:

"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."

There are many ways to make your business go viral. Rebranding just isn’t 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. However, the rebrand didn’t include changing its logo, colors, or much of its visual identity.

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, a marketing lecturer at the University of Wharton, explained 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, a Clinical Professor of Marketing at the University of Maryland, added his input, stating:

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. However, the rebranding effort didn’t significantly increase its burger sales and, instead, brought on mixed reactions and confusion.

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

Everyone knows logos are an essential part of a brand's identity — 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 with some crucial lessons.

Mini Case Study: Uber

Source: Fortune

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.”

But according to Alexander Chernev, a professor at the 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 new Uber logo — many didn’t even understand the story behind it. Peter Markatos), the Former Director of Brand at Uber, admitted that they weren’t achieving their goal with their current system, stating: "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 its latest version, seen below.

Source: Uber Press Kit

Flaw 5: Name change when it's not needed

A rebrand often comes with a renaming — which can cost you brand recognition and branded search traffic if done incorrectly.

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

So, if you want to rename your company or a product, ensure you have both solid reasoning 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 support of this change, the company introduced a new logo, “The Hut,” which it called “the perfect icon for our mobile generation.”

Brian Niccol, the Former CMO at Pizza Hut, told Brandweek:

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.”

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 generated laughter from the media and scorn from the public — forcing the company to revert to its original name.

However, the brand seems to still be using the phrase "No One OutPizzas The Hut" in 2022, as evidenced in the February ad seen below:

Final Thoughts

It can be challenging to roll out a successful rebrand. You might need to spend years and millions of dollars conducting research and devising a sure-fire rebranding strategy. But in the end, putting in the necessary time and effort is worth it — because you’ll avoid all the mistakes we covered in this article.

Solving the first problem, i.e. conducting extensive market research, is the most important factor in any good rebrand. 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 not have changed their packaging, logo, or name.

Companies need to be aware of their current market position, brand loyalty, and customer perception early on — thus, gaining invaluable 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 confused loyal customers or doesn't create any positive outcomes.

Brand Marketing
Brand Strategy

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