Why rebrandings often fail

Rebrandings today are of course more digital than they used to be, and therefore far more multifaceted. Where only a few years ago the same ten brand asset categories had to be managed, there are suddenly 50 today. Despite this rapid digital expansion, a rebranding still has a major impact on physical brand assets as well.

Think of the physical environment (offices, retail outlets, factories and so on) as well as the vehicle fleet, trains, ships or even aircraft. This is where the biggest rebranding challenges arise, and it is not unusual for major financial opportunities to lower spend and reduce future budgets to be overlooked.

While most of my recent blogs have dealt with the consequences of digitalisation, brand transformations and brand management, today I want to focus on asset-intensive rebrandings and what often goes wrong in them. Rebrandings of this kind mainly occur when organisations face far-reaching change as a result of a clear repositioning, merger, acquisition or divestment.

In the simplest case, the scope of the change could look like this:

The asset-intensive scenarios (see above) cover the rebranding of all brand touchpoints, including the physical environment, the fleet, trains, ships and aircraft. These assets typically account for 50-70% of total rebranding spend, are by far the most complex to plan and require a fairly long implementation timeframe. On top of that, they usually have to be funded through CAPEX (capital expenditure) investment.

Based on the hundreds of asset-intensive rebrandings we have guided over the past 26 years, we can identify eight main sources of error that lead to a suboptimal rebranding:

1. The absence of a full business case

Too often companies build a rebranding on thorough brand research and a sound brand strategy and design, but without a robust business case that takes the implications (and benefits!) for the organisation into account. As a result, required budgets are not allocated – or are set far too low – important teams and key functions are not deployed, and the total organisational effort is badly underestimated.

2. Not having the finance team on board

Decisions on major investments are taken by the board and need the CFO’s “nod”. In reality, however, rebrandings are often planned without considering the organisation’s accounting principles, depreciation periods, replacement programmes or the current book value of the assets concerned. That can produce a weak business case, unsupported by solid financial reasoning.

3. No proper project organisation right from the start

The business case has been approved, the CFO is on board – so what comes next? A rebranding without a clear sponsor at board level and a project lead who plans everything will usually not succeed, because the brand owner will struggle to secure internal support.

4. Throwing the brand over the fence

In my experience, the perfect recipe for disaster is a central brand department that provides decentralised users with guidelines and resources, but then imposes a rollout timeline without a central budget for training and support. The result is an inconsistently implemented brand, because the original idea behind the rebranding gets lost in subjective interpretations.

5. Missing value engineering opportunities, and with them the potential savings

As with any change process, a rebranding needs to be thought through from every angle, because it is the ideal opportunity to assess and validate which brand assets genuinely add value. It is also the right moment to find more effective and cheaper ways of producing those assets. Teams often have no clear guidance for this, however, and end up replacing assets on a like-for-like basis – in terms of scope as well as process. That wastes a major opportunity to reduce future costs and free up funds for more important and more valuable branding initiatives.

6. Failing to use new technological possibilities that can deliver an impressive and lasting brand experience

In our book “Vermögenswert Marke” we looked at the most important technological trends shaping the brand world today: 5G, the Internet of Things, VR, AR, mixed reality and artificial intelligence. These technologies create more scope than ever for new customer and employee journeys that set an organisation clearly apart from the competition. Too often we see that, for lack of preparation, no time and no budget are planned for implementing new, experimental technologies that could lastingly and positively change how both employees and customers experience the brand. As a result, the potential and the purpose of the rebranding are not fully realised.

7. Having no plan for the wave of work ahead

For the employees leading the project, a rebranding means a great deal of extra work. All too often we are called in as consultants only once the workload has already overwhelmed the people involved and relationships inside the company are strained. At that point it is far harder to put things right: internal support for the rebranding has evaporated and the brand owner’s internal reputation has been damaged – sometimes beyond repair.

8. Not convincing employees of the rebranding

Replacing physical assets can – to put it bluntly – be achieved simply by spending money. Winning colleagues’ agreement and commitment is not nearly as straightforward. This is probably the most frequently underestimated aspect of a rebranding. In the worst case, internal teams not only fail to understand the value of the new brand, but turn cynical and refuse to support rebranding initiatives and related activities.

This is not an exhaustive list – when it comes to rebrandings, every company has its own dynamics and potential pitfalls – but it should give you a sense of some of the risks a brand change involves. If they are not taken into account, brand owners and agencies alike will be disappointed, because the rebranding will not live up to what it originally promised.

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Marc is co-author of “Vermögenswert Marke”, a book on the implementation and management of brands that draws on real case studies from more than 25 years of experience.