Rebranding a business costs a huge amount of money. \u00a0The cost is both direct (through ordering new stationery, relaunching a website, changing signs on doors and designing a new logo) and indirect (potential lost business from people not recognising the company, time lost through employee training on how to use a new brand).<\/p>\n
What’s more, not all rebranding exercises are a success. \u00a0Possibly the most famous failure is Consignia, who were once the Post Office, and changed the brand again to be the Royal Mail Group after a single year.<\/p>\n
Why do companies still do it, then? \u00a0As economists, we tend to assume (rightly or wrongly) that businesses act in a rational manner, and therefore before spending considerable sums on a new look, they will have considered the benefits of doing so. \u00a0Such a cost benefit analysis can be a costly exercise in itself, involving consumer and employee interviews, behavioural analysis, legal advice and market trends analysis. \u00a0Using all of these sources, the management team will be presented with a report which estimates the total direct cost of the rebrand, and attempts to put a monetary value on the benefit.<\/p>\n
The value of a rebrand will come from a variety of areas, depending on the current market. \u00a0If a company has seen a poor few years, gaining a reputation for poor quality or scandal, a rebrand can help to halt declining sales. \u00a0If a new product is coming out, or the company is looking to expand its market beyond its traditional customer base, a rebrand can help increase sales. \u00a0Changes in brand can be used to increase prices (and therefore profits), reduce costs through a consolidation of international markets, or simply signal to the market that you are looking to stay. \u00a0Susan Gunelius<\/a> splits reasons for rebranding into proactive and reactive reasons, but a key question is missing from that article – how do we measure the benefits?<\/p>\n There’s no easy way of doing so. \u00a0What’s more, benefits will change over time. \u00a0When in a recession, consumers\u00a0will be more interested in lower prices than seeing a flashy new name on the box. \u00a0The cost benefit analysis will need to be undertaken at exactly the right moment in time in order to give the management a robust basis for their decisions. \u00a0And even with such analysis undertaken, it can all go wrong; the analysis carried out for the SciFi Channel obviously overlooked the fact that “SyFy” is a slang word for an STD.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Rebranding a business costs a huge amount of money. \u00a0The cost is both direct (through ordering new stationery, relaunching a website, changing signs on doors and designing a new logo) and indirect (potential lost business from people not recognising the company, time lost through employee training on how to use a new brand).<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[7],"tags":[46,40],"class_list":["post-435","post","type-post","status-publish","format-standard","hentry","category-commentary","tag-cost-benefit-analysis","tag-modelling"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p28ZxV-71","_links":{"self":[{"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=435"}],"version-history":[{"count":3,"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/435\/revisions"}],"predecessor-version":[{"id":502,"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/435\/revisions\/502"}],"wp:attachment":[{"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=435"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.economic-truth.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}