The Green Sheet Online Edition
February 09, 2015 • Issue 15:02:01
Rebranding risks and rewards
A handful of global, big-brand companies have brazenly rebooted their identities in the past century. Nissan's mid-life shift from the legacy car brand Datsun is perhaps one of the most memorable renaming events. Other extreme corporate makeovers have included IBM, Accenture, Google, Nike, and T-Mobile.
In short, we rarely see mega companies doing full rebrands for two primary reasons: it's expensive and considerably risky. Many experts feel that pulling off a full identity switch without severely hurting a company's profit potential or credibility, is one of the riskiest feats any established business can pursue. Yet, over the past decade, the world has seen a large number of small to midsize business brands get reborn.
Varied reasons for change
Companies that overhaul their brand typically have legitimate business reasons for taking on the challenge. Often, identity changes happen when another aspect of a brand such as a logo or a company's market position changes. This was the case when the card association MasterCard International rebranded to the publicly traded card company MasterCard Worldwide in 2006.
Others result from mergers, acquisitions or subsidiary rollups, when it makes sense for the combined companies to adopt the name with the most brand equity in its vertical marketplace. The 2006 rebrand of Vital Processing Services to Total System Services Inc. (TSYS) is an example of this happening within the payments industry.
Other times, a company makes the decision to change things up based on circumstances beyond its control. The recent rebrand of Isis Wallet to Softcard is representative of this type of situation. Softcard's board felt compelled to pursue the strategic change to disassociate its brand from the rising militant terrorist group know as ISIS.
"If there is some kind of negative, confused or misleading association with the existing brand – the partners split, a company is sold or goes bankrupt, etc. – it is a brand worth losing," stated Nancy Drexler, owner of Acquired Marketing, "However, what's critical when a company chooses to make this transition is they must recognize they will have to invest in making up all the brand equity they are going to lose."
New name for strategic growth
Brad Giles, Director of Channel Marketing at Cayan (the new name adopted by Merchant Warehouse in January 2015), approached the topic of brand equity from a different angle. After completing an exhaustive brand analysis involving a third-party consulting firm, Cayan leadership decided it would be safer to take a radical step away from the existing brand name than it would be to keep it.
"In our research, we learned the company had an enormously strong reputation inside the processing industry's ecosystem and our people also scored very high marks, but nobody inside or outside the industry had any affinity or emotional attachment to the Merchant Warehouse brand," Giles said.
Giles also described how leadership came to realize its former name may have actually become a hindrance to the company in its efforts to pursue strategic growth initiatives centered on expansion of its technology channel. "From a risk standpoint, we had to weigh whether continuing down the path of doing what we're doing under the name Merchant Warehouse would help us to expand using technology as our lever," he said.
According to Giles and statements in the company's formal announcement, Cayan was selected because there are "no strong attachments to the word," which makes it "an empty vessel." Likening it to one of the world's biggest brands, Giles said the company felt there would be power in the simplicity of the single word. "We can build on it over time and take the same approach Apple did," he said.
Where Cayan elected to adopt a neutral word from the dictionary, many other payment companies have gravitated toward modern, non-word names or hipper versions of current names. Drexler believes this trend is a result of the transformation the industry is experiencing, which has turned legacy payment companies into far more than merchant services providers.
However, she advised companies to do research and consider the risks of moving to a non-word name. "These names are contemporary, but they have no firm meaning, so establishing brand equity is going to be extra challenging, expensive and time consuming," she noted.
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