Why do businesses rebrand?

2023 saw so many businesses undertaking rebrands; Johnson & Johnson and Nationwide Building Society to name just two. It made us think – as marketers we’ve all probably been involved in rebrands at some point in our career. We know all too well how time-consuming and costly they can be, so why do companies feel the need to rebrand?

Strong brands are more profitable, have greater market share and build more equity. They drive significantly stronger sales growth than any short-term sales uplifts caused by tactical marketing campaigns. They noted that consumer expectations are rising, with 45% of consumers now having very high standards when it comes to their expectations of a brand. And, that a strong brand can capture three times the sales volume of a weak brand.

Six reasons you might recommend a rebrand to a client

In reality, there are a myriad of reasons why a business would choose to rebrand and often these are specific to the business or the sector, driven by market changes, new regulations or a desire to shift positioning to exploit new revenue opportunities. Here are the six key ones we regularly come across when we’re asked to work on a rebrand for a client:

1. Brand not resonating with a target market

This is a common one. It could be that the business wants to attract new target audience group but more often than not, it’s because businesses have failed to listen to the changing wants and needs of their customers, and the market, and the brand has become less relevant and a little out of date as a result.

2. A new mission or vision

Often, a rebrand begins as a research exercise and results in an evolution of the mission, vision and values. If the mission, vision and values of a brand change, then there’s a need to evolve the whole brand house to make sure everything is strategically aligned. Or, you risk confusing consumers and negatively impacting revenue.

3. Competitor standout

It’s vital to be able to clearly articulate what a brand’s USPs are and differentiate them from the competition. To marketers, this sounds obvious, but you’d be surprised how often we see brands who either have identical USPs to their competitors or are not leveraging their own USPs. Being able to articulate USPs an in effective and engaging way, helps ensure authenticity and is an important way to build brand equity and create an ownable space in a market.

4. Market repositioning/new markets & locations

When a business model or strategy changes, the brand should follow. In this case, rebranding creates an opportunity for a brand to redefine exactly who their target audience is. This also allows the brand to expand into new demographic groups. What once attracted one group of consumers, may not necessarily work to attract ones in a new group, which is where a rebrand comes in to make sure all the brand elements are fit for purpose.

5. Mergers and acquisitions

In our experience, this is where robust brand architecture is key. Ensuring optimal relationships among the newly merged brands, products, and services prevents customer confusion, inconsistency, and sales cannibalisation.

6. Overcoming a PR crisis

If a business rebrands specifically to overcome a PR issue or negative press, in our experience, this is rarely a good idea. The is mainly because a partial rebrand is rarely enough – and consumers can see straight through it. Brand equity takes time to build and shouldn’t be quickly disregarded. Twitter’s recent rebranding to X cost anywhere from $4 bn to $20bn. Since the rebrand, the value of the company has declined by around $20bn, a drastic drop from the $44bn Elon Musk paid for it.

Some tips to help you make the most of a rebrand opportunity

1. Research the target audience thoroughly.
2. Get all the brand architecture in order, including website domains if there’s been a change in company name. Brand guidelines should be updated and distributed to relevant stakeholders, so everyone is aligned.
3. Develop a unique brand message that stands out from competitors.
4. The client should regularly engage with customers, employees and prospects – taking them on the rebrand journey can drive early engagement and long-term success.
5. Ensure any rebranding efforts are measured and ROI can be demonstrated.

As we’ve said, as consumers and markets evolve, it makes sound business sense to invest time and money into evolving a brand in tandem to keep building equity and advocacy and ensure the remains relevant. We know that a successful rebrand will generate long-term value. Done well, it can lead to deeper consumer loyalty, increased revenue, greater market visibility and business growth.

However, a note of caution. Brand equity takes time to build but can be damaged or broken very quickly. Brands that succeed are the ones who remain vigilant to changing trends and consumer behaviour. Companies need to react and evolve to these things in a strategic and creative way.

As a creative marketing agency, we love helping brands stay relevant. So, if you think your brand is in need of a refresh, or you’d like to find out more about how we approach a rebrand project, get in touch today.

You can read more insights in our blog.