By Matt Stein, CompleteSpectrum
From aligning brand messaging during a merger or acquisition to embracing new market opportunities, a PE fund might have a number of reasons to rebrand a portfolio company.
Regardless of the motivation, you must consider how others have fared when executing a rebrand and think about what will work best for your business.
Look to PE funds and portfolio companies that have been through the rebranding process to understand what you should — and shouldn’t — do moving forward.
Don’t: Leave any unfinished business. In addition to developing a plan of action and informing all relevant stakeholders, brands need to roll out changes across all channels where customer interactions take place. This comprehensive approach will help ensure customers are clear about how to refer to your brand while also positioning your organization for greater market share.
- Dunkin’ Donuts: The company officially dropped “Donuts” from its brand name in September 2018. The rebrand indicates Dunkin’s willingness to accommodate changing consumer preferences and remain relevant among health-conscious consumers. The change also represents an opportunity to focus on the more popular portion of the business: coffee. Just under 60 percent of the chain’s overall business can be traced back to beverage sales.
Dunkin’ dropped the ball, however, when it came to execution. Promises to complete the rebrand by January 2019 remain unfulfilled as numerous online materials — including the DD Perks loyalty program and DD cards — continue to display the old brand name. Beyond failing to implement the rebrand across its online presence, Dunkin’ also took quite a while to make the change official. In fact, Dunkin’ first abbreviated its name in its “America Runs on Dunkin” ad campaign in 2006. The decision to use a new name in an ad campaign coupled with the fragmented rollout contributes to rebrand confusion.
Do: Align your brand to your services. Organizations set to undergo a rebrand must align their brand with available services. While it may be tempting to cater to a new trend, offering the services to match such branding isn’t always feasible. Consumers who expect a specific set of products or services based on a brand-name change won’t waste any time looking toward the competition.
- Weight Watchers: Traditionally known for diet-focused services, Weight Watchers made the switch to WW – or wellness that works in September 2018. Although the rebrand should theoretically help WW connect with consumers who are pursuing healthier lifestyles, it remains to be seen how realistic a shift to wellness really is.
Since closing at a record in June 2018, the company’s stock has fallen more than 70 percent. JP Morgan analyst Christina Brathwaite has reduced her rating on the stock all the way to underweight from overweight. Beyond the absence of services one might expect from a wellness brand, lack of clarity surrounding the name change also has the potential to leave consumers wondering how they should refer to the brand and what “WW” actually stands for.
Don’t: Be afraid of simple yet impactful change. An organization that opts for a straightforward shift of its logo or brand standards needs plenty of time to vet those changes. From focus groups to online surveys, make an effort to understand how customers may feel about a rebrand.
- MasterCard: MasterCard officially removed the word “MasterCard” from its logo earlier this year. The small but significant revision provides MasterCard with a more modern, globalized presence. Potential language barriers tied to the company’s name now give way to an iconic logo that is recognized strictly by its appearance. MasterCard hopes the change will enable its logo to take up more space on smartphones and smartwatches that feature smaller screens.
The visual update is also accompanied by the debut of a sonic logo that will play each time a transaction is completed. With the voice shopping market set to surpass $40 billion by 2022, MasterCard is positioning itself to take full advantage of this burgeoning industry.
Whether designed to meet your customers’ needs or secure additional market share, rebrands have the potential to deliver unprecedented value.
Adhere to the do’s and don’ts of executing a rebrand to ensure it delivers the benefits your portco is looking for.