The technicalities of a brand name change are relatively insignificant compared to the strategic and marketing challenges you face when you alter your brand.
It can be done well. But I’ve seen this done poorly, and it literally cost one organization millions. They lost half of their annual revenues from acquisition, additional gifts, major gifts and bequests—from $4.5 million down to just over $2 million. Reserves dropped from $4.5 million to under $2 million. It also angered loyal constituents who did not accept the brand-name change.
One of the most devastating impacts was in donor acquisition. Their performance fell by a factor of 4. Returns on acquisition dropped from roughly 1.2% to less than 0.25%. It took them years to recover. Their original brand was well known, but response to the new brand was mostly, “Who?” Circular files nationwide were filled with that organization’s unopened acquisition appeals.
Many factors go into a brand name change. Here are a few:
· How dramatic is the change? Will people still recognize who you are from the new brand, or will you sever the connection from one brand to the next?
· How entrenched and well-recognized is your current brand? If few people know you, then there’s little risk. If your brand is well-known, then the risks are substantial.
· How much money do you have to invest in marketing the new brand and the connection with the outgoing brand?
Here are two case histories. One notorious failure and one success. While these are for-profit companies, these give you some idea of the risks and the stakes.
We all know Nissan, the automaker. Fewer know that Nissan was once Datsun. Why Nissan came to the US as Datsun is unimportant here, but when Nissan worldwide decided to rebrand Datsun in the US, they spent about 3 years and $30 million dollars. The message did not get through to many, and Nissan paid a dear price. Datsun cars were highly regarded—especially the iconic 510 sedans and 240-Z sports cars—but to the average car buyer, Nissan was unknown. This marketing faux paux hurt their brand recognition so badly that Nissan relatively recently bought up all the old Datsun 240-Z sports cars they could get, refurbished them to new condition and resold them in a marketing stunt meant to cement the connection between the two brands. Never heard of it? For most of you, this is news, because that stunt largely appealed to faithful brand loyalists and car nuts—who already knew the connection.
After intervention by the federal government, Standard Oil evolved to become Esso. Much later, Esso needed to merge with its other brands, Humble, Enco and others, so Esso evolved into Exxon. “Esso is Exxon now” is a slogan that still resonates, because it was hammered in with a sledgehammer reputed to be worth $50 million (in early 1970’s dollars no less). Note that Esso and Exxon are similar enough that even the uninitiated would be likely to recognize the connection, and also note that the Esso brand not only is still in use, but it’s reputedly up for sale by Exxon.
Brand changes are not for the faint of heart, and they are not to be handled in a cavalier manner. The nonprofit case history is evidence that mismanaging a brand name change can be devastatingly costly and setback your mission for years. Done well, however, a brand name change can spark an enormous growth in awareness, because it is the “excuse” you need to garner media attention and talk-up the organization’s mission in the context of rebranding the organization.