Ten Risks Of Rebranding And How To Address Them.

The initial decision to pursue a rebranding initiative comes with excitement, but after the endorphins fade, concerns about the risks of rebranding begin to surface. No matter how many reasons for rebranding you account for, a fear emerges that you may not have the necessary ingredients for a successful rebrand. 

You become paranoid about possibly experiencing a drop in brand identity and customer loyalty. Shifting to a state with no foreseeable upside to this project, you consider scrapping the whole thing and deciding to leave things as they are. 

But as they say, if you’re not moving forward, you’re moving backward. So, we created this article to expose each rebranding risk and provide a step-by-step process for mitigating them as a part of your rebranding strategy. 

Let’s jump right in and look at these risks now. 

Loss of Brand Equity

Whether it’s a household name or a small business, existing brands of all sizes have a certain level of brand identity with their target market. Whether a complete or partial rebrand, changing your visual identity and storytelling can negatively impact brand recognition with the target audience, putting your current market share ownership at risk. 

Uncertain ROI

Unlike a new brand that must pursue a branding strategy before launch, existing brands have the luxury of letting things be as they are. One common reason for accepting the current look is not having a guaranteed return on investment. And it’s a valid concern. You can invest hundreds of thousands of dollars and end up with a failed rebranding outcome, resulting in the same (or worse) revenues.

Negative Media Attention

The media is full of opinions; sometimes, these opinions pick up steam as more people like, comment, and share media mentions. Sometimes, these opinions are positive, but unfortunately, other times, they are hurtful. The negative media attention that becomes viral can hurt your brand reputation for years. 

Brand Confusion

Many brands falsely expect brand memorability to be guaranteed once a consumer makes their initial purchase. Failed rebrands often do not understand how to quantify which brand assets to carry over for recall. A confusing tone of voice and visual identity makes the company a head-scratcher for the target audience. 

Mixed Messaging

Although most media attention around rebrands is about the visual identity, the brand messaging is what can have the most profound impact. Rebrands risk making the target audience consider conflicting messages as they recall old ones but see new ones. We see this with brand stretching, where a company attempts to reach a broader audience. 

Clearing Out Existing Inventory

In the CPG industry, every comprehensive rebranding effort or simple brand refresh creates a problem in eliminating the current product inventory. When rebranding products, clearing out inventory includes what sits in the warehouse and, more importantly, what exists in retail stores. Having two different packaging designs in the market creates many issues for the brand. 

Contractual Obligations

One often overlooked hurdle in rebranding is navigating contractual obligations woven into your brand strategy. Changing these elements could inadvertently breach agreements you have in place with vendors, licensing partners, and even employees. Failure to consider this aspect could lead to legal disputes, financial penalties, and a tarnished reputation, derailing your rebranding efforts before they even get off the ground.

Read More: 24 Rebranding Questions You Must Ask.

Loss of Focus

Rebranding demands substantial time, attention, and financial resources, often at the expense of other marketing initiatives. This shift in focus could risk weakening your engagement with existing customers or hinder your efforts to attract a new audience. Thus, weighing whether rebranding is the most effective strategy for your business goals is crucial.

Team Morale

Making a change to the branding can reduce the enthusiasm of your team, which can cost a company in more ways than one. If individuals from your organization are not on board with this decision, they may be less likely to talk about or promote the brand. Even subtle shifts to your brand assets can create disagreements and misalignment.

How To Mitigate These Risks

No rebranding strategy is without risks, so eliminating them all is impossible. However, we can significantly reduce the chance of these risks interfering with a successful rebranding effort. Now that you understand the risks, here’s what you can do to minimize the impact of these risks throughout the rebranding process.

Protecting Brand Equity

Brands can perform market research and brand testing to understand what resonates with the target audience. Then, they can incorporate the testing outcomes into a revenue-generating predictability model to determine the return on investment. Here’s a look at the types of testing a brand can perform.

Type of Brand Testing	Description
Brand Perception Studies	Research to understand how the current brand is perceived to establish a baseline for evaluating the effectiveness of the rebrand.
Focus Groups	Use focus groups to gather qualitative insights into customer perceptions of new brand elements like logos, color schemes, and taglines.
A/B Testing	Conduct A/B tests to quantify how different variations of brand elements impact consumer engagement and preference. This can be useful when rebranding websites, social media content, and email campaigns.
Concept Testing	Present the new branding concepts to a target audience to collect feedback and assess reactions before implementation.
Logo Testing	Test the new logo rebrand across multiple platforms and audiences to ensure it effectively communicates the brand message and is well-received.
Usability Testing	Ensure all new branded materials, particularly digital interfaces like websites or apps, are user-friendly and intuitive.
Recall and Recognition Tests	Measure how well your target audience can recall or recognize the new brand elements compared to the old ones or against competitor brands.
Emotional Resonance Testing	Evaluate the emotional impact of the rebranded elements on your target audience. Emotional resonance is crucial for brand loyalty and engagement.
Customer Journey Mapping	Understand the impact of the new brand on the customer experience at each touchpoint to ensure a smooth transition and positive reception.
Price Sensitivity	Conduct pricing research to align the perceived value of the rebranded entity with your pricing strategy.
Internal Testing	Gather feedback from internal stakeholders to ensure employee buy-in, which is critical for a successful rebrand.
Social Listening	Use social media monitoring tools to track public perception and look out for potential issues or backlash against the rebrand.

Increasing ROI Certainty 

Beginning with the end in mind is a strategy we advise if the goal is successful rebranding. What outcomes do you need for your investment to be worthwhile? While determining revenue increases is challenging, consumer testing your new concepts can predict purchase intent and brand recall metrics.

Proactive Media Attention

Create a proactive PR strategy for your rebranding launch. Get ahead of the media by creating a new brand awareness conversation and a contingency plan with template responses for potential negative commentary. 

Preventing Brand Confusion

Implement a thorough and consistent communication strategy, taking a no-stone-left-unturned approach to introduce the new brand theme and voice to your audience. Take a guerilla marketing approach and use multiple channels to ensure the message reaches your audience clearly and comprehensively.

Clarifying Messages

Create a comprehensive set of brand guidelines and provide it to all internal teams, including marketing, sales, and customer service. Then, bring everyone together to ensure they speak the same brand language and use the same brand assets. 

Clearing Out Existing Inventory

Communicate with your retail partners and align yourself with discount channels where you can sell through the inventory as fast as possible. Think of this as an opportunity to get your product in front of new eyeballs with a “better than nothing” chance that they will purchase your newly branded items. 

Contractual Consideration

Review all existing contracts for clauses that the rebranding project could impact. Then, consult legal experts to navigate any changes a brand must make or negotiations that need to occur.

Maintaining Focus

Work with an external rebranding agency with the experience and skill set to best assist you. Then, assign a dedicated team to assist with the rebranding campaign, and do not force them to perform a juggling act with other projects. Give the rest of the company the responsibility of focusing on core business activities. 

Aligning The Team

Conduct internal workshops and training sessions to align all employees with the new brand. Create a rebrand presentation deck and communicate openly about the reasons behind the rebrand and the new direction the company is taking.

Create A Rebranding Checklist

Understanding the risks is only one part of the rebranding strategy. Before engaging in a strategy, create a rebranding checklist for this initiative that crosses every t and dots every i to give you the best chance at succeeding.

Data-Driven Brand Development That Can Guarantee Sales Performance.

If you need a rebrand with performance predictability, we can help. SmashBrand is a brand development agency that researches, designs, and tests all products to ensure peak shelf performance. Book a time to discuss your project with our team.