Most brands don’t die because they are murdered by the competition. Most brands die of self-inflicted wounds. In the time we built the Barefoot Wine brand, we saw many brands come and go in the marketplace. Most of them fell victim to their own rebranding campaign. Even though the brand builders had the best intentions, and the loftiest goals, even though the brand builders did tons of research and focus groups, their brands just went Poof!– Never to be heard from again!
What happened? For the most part, the marketing departments of the companies that did the rebranding were isolated and insulated from the sales process. For one thing, they assumed that sales would remain at least the same as the current brand after the rebrand. They didn’t! For another, they assumed that the label and package design were more important than merchandising or quality. They’re not! And lastly, they assumed they could make the same or more profitability at a higher price point. They couldn’t!
Having actually been there, and actually built a top selling national brand in retail stores, it is been our experience that the risks of rebranding are grossly underestimated by the very marketing folks pushing for a rebrand. It’s almost a stock answer that if your CPG product isn’t moving at retail, it needs a rebrand. Maybe it does, but it more than likely just needs to be better merchandised, promoted, and have more in-store demos (i.e., sampling).
Brand building is hard work! It’s a whole lot harder than drawing pretty pictures, doing focus groups, and coming up with a comprehensive rebrand strategy. It’s harder because it is tedious, hands-on, and requires physical labor. It also requires daily vigilance, ongoing promotion, hand selling and sampling.
For instance, in our 20 years of brand building, we saw several competing brands appear on the market. They tried to copy our colors, our style, and our price points. But when the sales just weren’t there, instead of putting energy into merchandising, they put energy into a rebrand. If a brand is being ignored on the shelf by its brand builders, a new label, logo, or price isn’t going to make the difference in sales.
Typically, CPG brand builders are just too impatient. If it doesn’t move right away, change the name, change the logo, change the colors, change the theme, or change the price. From our perspective, what really needs changing is the amount of energy that is being put into those brands on the physical retail shelf.
Probably the biggest denial in retail brand marketing today is the effect and power of plain old brute force merchandising. Brands with mediocre labels can sell like hot cakes if shoppers trip over them. But in order to get floor displays and get noticed, brand builders have to focus on the retail process. They have to commit to the costs and the advance scheduling necessary to achieve those displays. They also have to be patient and wait for the customers to finally discover their brand, and more importantly, come back and buy it again.
If they come back to buy it a second time and it’s out of stock, they will blame the brand. They will say it’s undependable and shop for another brand that is consistently in stock. Few marketing people will ask the question, “Are sales down because we are out of stock?” But many will recommend a rebrand when sales are flat. Few will ask if the current brand has had adequate and well executed in-store demos, floor displays, or if it has been constantly checked for correct pricing. They will, however, recommend a rebrand. They want to change the label and reposition the brand as if that will make up for poor merchandising, or worse, poor quality. Rebranding won’t help if the quality just isn’t there! Nothing will disappoint your customer more that a new look and the same old mediocre product.
So basically, we believe that most rebranding is unnecessary and should require some research into the merchandising program before making a change and submitting to the risks of rebranding. Before you rebrand, make sure you have exhausted your efforts at distribution management. Don’t let there be a reason for a missed delivery, an inaccurate code number, or incorrect pricing. Don’t be so quick to pull the trigger on a rebrand until you’ve tried everything else. And make sure you know and realize what “everything else” is before you take on the risks of rebranding:
- Shocking the System.
A big part of retail brand building is selling your brand to everyone along the distribution channel. This includes, but is not limited to, your own people, your distributors’ owners, your distributors’ sales managers, your distributors’ sales team, your retail buyers, your retail buyers’ clerk, and ultimately your general public consumer. Each person in the chain buys for a different reason. And, the chain is only as strong as its weakest link.
It may take years to make every one of those sales. Finally, those players recognize your current brand’s visual identity. Finally, they appreciate your brand’s value. And finally, they get used to seeing your brand positioned at a predictable price point.
Then, Boom!You decide to rebrand and upset the apple cart. But that applecart may take years to reestablish – just like your former brand did. During that time, you risk massive confusion, a huge demand for handholding, and poor sales due to missed deliveries and wrong shelf assignments. You see, the distribution process is so big and so cumbersome, it flat out is resistant to change! There are just too many brands to keep track of. Shocking the system is one of the most often overlooked risks of rebranding.
- Losing Your Customers.
The customers you had are now confused, upset, and feel betrayed. After all, it’s not really your brand, it theirs! You, as a brand builder, are just the brand steward for the time during which you are responsible for the brand. The brand already has customers. Some of those customers have become advocates. Advocates put their personal reputation on the line when they recommend your brand.
When a change takes place they feel compelled to weigh in. Advocates can quickly become detractors. They feel obligated to protect their reputation by distancing themselves from the brand that has undergone changes that are not to their liking. If the price goes up, the quality goes down, or it moves to another shelf with a new visual identity, you face losing customers, one of the top risks of rebranding.
In other words you may have to start all over again looking for new customers who are attracted to your rebranding and repositioning efforts. That’s going to take time and a tremendous amount of marketing and merchandising. A rebrand at retail almost always sees a big dip in sales. It’s not just the cost of the physical rebrand, it’s the cost of losing sales during the process.
- Missing the Mark.
What if the assumptions your marketing team made about rebranding and repositioning your brand were wrong? Do you quickly rebrand again hoping to hit the mark this time? How much money do you put into trying to make the rebrand achieve traction and growth?
At retail, the most decisive form of positioning is price. Brands seeking to appeal to a more upscale customer in the hopes of improving their margins will certainly lose most of the customers they had at the more popular price points. That’s why they’re called “popular.” But maybe those brand builders feel they can trade volume for increase profitability. As you move up in price points at retail, the number of potential customers is reduced compared to the choices available.
One of the risks of repositioning to higher price points is miscalculating your ability to compete with already established brands at the higher price point. The idea of selling less and making more is always tempting. It seems so efficient on its face.
Abraham Maslow once said, “If all you have is a hammer, everything looks like a nail!” But to be a successful brand builder, you need more tools in your tool box than just rebranding. Make sure you’ve used all the tools available to you before you resort to a risky rebranding campaign.
If you’ve thoroughly exhausted the use of your other tools including improved distribution management, in-store demos, floor displays, community outreach, and improved quality, and sales are still flat, you might consider some form of rebranding. But from what we’ve seen in the marketplace, we believe any attempt at rebranding should be by evolution not revolution. Take it slow and learn as you go.
Some marketers may object and say, “A good shock will shake up the system, get everybody’s attention, and cause the market to refocus on the ‘new’ brand.” But for the reasons mentioned above, we believe the risks of rebranding can easily outweigh the potential advantages. It’s hard to go back if you’re wrong. And, if it doesn’t work, the temptation is to try again. Each subsequent iteration hurts the brand until they just go Poof!and disappear altogether.
Some of the biggest mistakes we’ve seen in rebranding have been committed by big corporations that acquire brands and immediately change them. Their marketing people haven’t really built a brand at store level, yet they are empowered to redesign them.
It’s exciting! It’s creative! It looks good on their resume! And it’s powerful. They can dictate what the brand will look like in the stores from the comfort of their own desks. They may even leave the company long before the negative effects of the rebrand have been realized.
The obvious problem with this type of thinking is that it’s short-term and doesn’t necessarily appreciate long-term effects. Further, it can become a knee-jerk reaction to any acquisition. In other words, it can overlook some of the important reasons why the existing brand gained traction in the market in the first place.
We’ve seen perfectly good brands get acquired, get rebranded, lose customers, get sold again, get rebranded again, lose more customers, get sold again, and you guessed it, get rebranded again. Those brands no longer exist!
Another big mistake we’ve seen is change for the sake of change, the idea that new and different is always better. It’s not. Sometimes what seems old and “retro” is actually classic, tried and true. Sure it can be improved, but not until its compelling elements are appreciated. And even then, it should be done in stages. We believe the best rebranding is the rebranding that nobody notices!
And yet another big mistake we’ve witnessed is, “It’s time for a change!” It’s as if there’s a clock on the wall that’s more important than the strength of the current brand. Even worse, it’s like saying, “The current level of sales will remain or increase with the rebrand.” They typically won’t, but for students coming out of marketing school who have studied the latest trends, it’s out with the old and in with the new. The problem is, it can be out with old customers and in with confusion, lack of continuity, and the perception of unreliability.
Sure, there’s plenty of examples of successful rebranding, and those examples are always used by marketing folks itching to get in there and make their mark. You only hear about the winners in Las Vegas. In fact there is an ongoing campaign to convince brand builders that they need to “freshen up their image,” that it’s time to “modernize,” and “keep up with the competition.” This creates an ongoing demand for rebranding.
But we suggest a great deal of caution. There’s too much at stake to jump into a rebranding campaign without a lot of respect for how the current brand got there, attracted its customers and advocates, and became familiar and memorable in the distribution channel and the marketplace. When it comes to rebranding, we like to say, “If it ain’t broke don’t fix it!”
Who We Are
Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.
Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.
They offer their Guiding Principles for Success (GPS) & Shelf Smarts courses to help consumer product brand builders achieve success. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.
Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular business site at www.thebarefootspirit.com.
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