Like forgotten food in the back of your pantry, sometimes brands can grow stale. You may need to get with the times or overcome negative publicity. Alternatively, your company could be expanding into new markets and adding to your product portfolio. The old brand doesn’t fit who you are anymore — nor does it align with your strategy.

These are all good reasons to give your company’s identity a facelift or a complete makeover. The catch is that not all rebranding attempts go off without a hitch. Conducting thorough research, solidifying your purpose, and ensuring strategic alignment are paramount before you make a move.

While no cakewalk, taking your brand in a new direction can be the right step. A rebrand is in order when you want to stay relevant, attract new customers, and reimagine your company’s course. Let’s dive into the powerful effects rebranding can have and pitfalls to avoid.

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Small-Scale Changes vs. Complete Transformations

Over the years, you’ve probably seen a brand or two change its look and feel. A redesigned logo appears on all the product packaging, store signs, and website pages. Maybe the slogan changes, along with all the marketing language the business uses. Perhaps there’s even a new brand persona in town, representing an extension of the company’s identity.

However, the business’s name and root identity stay the same. State Farm is still your reliable, ready-to-help next-door neighbor despite a new “Jake.” And although Starbucks’ logo keeps evolving, its core identity remains as a provider of the specialty coffeehouse experience. These moves are known as brand refreshes. They’re small-scale changes made to remain relevant while continuing to attract a core audience.  

A complete transformation of a brand involves more than a moderate revamp. It’s about scrapping your company’s positioning statement and going in a different direction. You’re changing your entire strategy and perhaps even your name. A full rebrand can be necessary if not changing would make it nearly impossible to overcome poor perceptions. Negative brand equity, modified business models, and growing pains are additional reasons for a rebrand.

General Motors did something like this when it acquired the Daewoo car brand in the early 2000s. Since the brand had become so tarnished, the Big 3 automaker decided to ditch the Daewoo name. It kept making and selling Daewoo models under more reputable brands like Chevrolet. General Motors also changed some design features so Daewoo-derived vehicles didn’t look like the same cars they’d been. Yet for all intents and purposes, they were.

Reasons to Rebrand       

Before you embark on a rebrand, it’s essential to determine why you’re doing it. A rebrand has to make sense internally and externally. Otherwise, it can create confusion. You might exacerbate the problem you’re trying to solve, such as a poor reputation.

Sometimes rebranding happens because fresh leadership comes in. A new CEO wants to put their stamp on the company, so they give the business a different name, logo, the whole works. Such a move can make sense if the goal is to change the company’s mission and general strategic direction. For example, a seasonal candy cane business could become a year-round maker of chocolates and other treats.

But a rebrand can backfire if the core purpose and strategy aren’t changing. Sudden changes may appear to be catering to a new leader’s whims. The rebranding of Twitter to X is an example. While Elon Musk wants to transform the brand into an everything app, he faces an uphill battle. The rebrand essentially eliminated a popular, instantly recognizable name, erasing billions in brand valuation.

Although rebranding can symbolize new strategies and overcome negative brand equity, it’s not always the best cure. What if an iconic brand like Disney suddenly changed its name overnight? The company would no longer benefit from decades of positive brand equity and name recognition. Undoubtedly, Disney has expanded into new product lines and adopted various strategies over the years. However, it has remained cognizant of the power behind the Disney name.

What Rebranding Can Do

Rebranding can be appropriate as consumers’ tastes change and you want to keep your growth trajectory moving upward. A rebrand may help you bring in new business while maintaining your existing customer base. When rebranding aligns with your company’s mission, it can reiterate your values. It might help you reach your target audience with more effective messaging.

Rewind, a health food company, once featured buck-toothed cartoon characters on its packaging, conveying the message that its great-tasting super greens powders were nothing to be afraid of. But as consumers grew more familiar with the once niche product, the company risked talking down to its audience of health-conscious individuals. Its sleek new packaging now emphasizes nutritional content and convenience. It lets current and potential customers know that they can easily get necessary nutrients without sacrificing time or taste. The rebrand stays true to the company’s core values, while acknowledging changed consumer preferences.

Rebranding can also be a wise decision if your market becomes more saturated. A new look and message may differentiate a brand if it’s getting lost in a sea of competitors. The cellular phone industry is an example. Today, wireless service providers are a dime a dozen. What was once a novelty service has become a commodity, overtaking traditional landline service.

With more choices, consumers tend to view carriers as the same. Price and promo wars are now the hallmark of the industry. But T-Mobile is an example of a previous successful rebranding strategy. The company shifted its focus to being the “un-carrier” by going against industry norms. It also used visual cues, such as vibrant brand colors and catchy audio clips, to stand out.

The Power of Rebranding

Rebranding strategies are as varied as the companies behind them. Some involve mixing up the logo with new colors, fonts, and slogans. Others are a complete makeover, modifying everything from the brand name to its design. Regardless of how a rebrand appears, it should align with the company’s strategic direction and purpose.

While rebranding has the power to fuel growth and overcome negative brand equity, be mindful of its potential effects on consumers. You don’t want to confuse and alienate. Sometimes subtle shifts are more effective than entire overhauls, especially if an iconic name is at stake.

The SuN Takeaway

As companies and markets evolve, rebranding on some level will probably be necessary. Matching your research with strategies and implementations can help you avoid others’ mistakes. After all, it’s still about convincing consumers your brand is the best choice for their needs.