Why is Rebranding Important? The Risks and Benefits of Rebranding Your Business

Has it been a while since your company or organization took on a rebrand? Do you sense your current branding is out of date or that your product and services have outgrown your branding?

A strategic rebrand can be exciting and breathe new life into your business, company culture, and even sales. But if you’re feeling unsure about reasons to rebrand, maybe even skeptical about the rebranding process, you’re in the right place to learn more!

Rebranding your business can come in a few shapes and sizes. 

In some cases, brands go as far as to change their name (like when Dunkin’ dropped “donuts” in 2018 after 68 years in business) to address competitive pressure or to stake a territory – coffee and blended drinks, in this case. 

Other times, companies expand their offerings and need a rebrand to both signal change and create a foundation for future growth (like when E.W. Process grew by acquisition in 2020 and expanded the enterprise again in 2023).

There are many reasons why rebranding is important – and even more reasons why companies embark on a rebrand. In this article, we’ll help you take the first steps toward evaluating whether it’s time for a major change by creating a rebranding strategy.

First, let’s quickly look at some of the upsides to rebranding.

5 Tangible Benefits of Rebranding a Company:

1. Creating or maintaining a strong, relevant brand identity
2. Evolving the business with changing consumer demands
3. Preparing for major market or geographic expansion
4. Refreshing brand appeal as new competitors emerge
5. Reconnecting with audiences or reaching new demographics

In a world where markets, consumer preferences, and competitive pressure lead to constant change, even the most well-established brands can face an identity crisis. Rebranding, while a significant undertaking, is one of the best ways to address this challenge.

Rebranding Your Business

While the idea might sound straightforward — new logo, fresh colors, perhaps a catchy tagline — the reality is that rebranding your business is far more intricate. 

Short of a total overhaul, brands may introduce more routine changes or experiment with messaging. You may be familiar with less-transformative branding initiatives that serve a narrow, or even temporary marketing purpose, such as a microsite or injecting influencer-based advertising to reach new audiences.

A true rebrand, however, touches nearly every facet of your business – from your visual identity and the tone of your messaging to how your team embodies your brand in every customer interaction. Done right, a rebrand has the potential to redefine your company’s perception, strengthen its position, and set the stage for long-term growth. 

But a poorly executed rebrand can confuse customers, rack up unproductive expenses, and even alienate loyal supporters.

Generally, a rebrand shouldn’t be taken lightly or done without the necessary research and prep work. We’ll give you some pointers on the right approach in this blog.

We’ll also answer some of the most frequently asked questions about rebranding and give you expert insights into the rebranding process. Leaning on Beyond Marketing’s years of experience helping clients execute and navigate rebranding, we’ll highlight the pros and cons of rebranding and tackle questions like:

• What is the main purpose of rebranding?
• Why would a business want to rebrand?
• What are the positives of rebranding?
• Are there disadvantages of rebranding?

Let’s dive in!

What is the main purpose of rebranding?

For some businesses, a rebrand could be the key to capturing a new demographic or distancing themselves from outdated perceptions. P&G’s transformation of Old Spice is a great example. The brand’s revival has succeeded both in knocking back younger competitors and expanding its audience to women.

For others, it may simply be a necessary evolution to keep pace with industry changes. A good illustration of this comes from the fintech world. Take the evolution of Credit Karma for example. The company has revamped its digital experiences and overall brand several times since it launched in 2008, narrowly offering credit history services. More than a decade since, Credit Karma’s grown into a full-fledged personal finance, tax, and money management software company. And rebranding over time reflects the breadth of the company.

Considering a significant rebrand every seven to 10 years can help a business with proactive positioning – in front of competitors and aligned with consumers. There are a whole host of other incentives that explain why a business would want to rebrand. Below, we’ll take a look at some of the leading factors.

Why would a business want to rebrand?

Rebranding is more common than you might think; many well-established companies plan for rebrands at least once per decade. This intentionality helps ensure the business identity reflects shifts in consumer expectations and market dynamics. Here are some of the common triggers that might lead a business to consider a rebrand:

• Staying Relevant in a Changing Market: Changes in customer preferences or industry standards can leave some brands looking outdated. Rebranding can signal that a company is dynamic and responsive.
• Target Audience Shifts: For a business to grow, the brand often needs to broaden its appeal or expand into different markets. And, frankly, not all brand identities age well. If the current look and feel of your brand no longer aligns with your audience’s cultural values, it may be time for a massive overhaul.
• Mergers or Acquisitions: When companies join forces, a rebrand can unify their identities, creating a cohesive new image that combines the strengths of each entity.

More generally, the natural growth and positive strategic changes that occur in a business or organization over time can necessitate a rebranding. Here’s a good example: Adult Enrichment Centers in York County, South Carolina. 

Several years ago, the nonprofit selected Beyond Marketing for its first major rebrand in 20 years. AEC’s programs date back to 1985 and despite 40 years of strong growth and becoming a beloved service provider to local families, the organization’s branding needed a facelift. 

Through its expanding services, the old branding didn’t reflect modern opportunities for the organization. The rebrand included new logo development, a new website, and mission-focused branding of their distinct program areas. Now, the agency can more clearly connect prospective families and clients with all of its services across three locations.

From that example, we can see how rebranding is essential – even in non-commercial settings. Whether you’re eyeing a rebrand for a non-profit group, a business leaving the start-up phase, or a mature company, there are some key stages that call for a big change. We’ll look at a few of these next!

Which Companies Need Rebranding?

A full-blown identity crisis isn’t the only catalyst for a rebrand. Provided your team can afford the investment (time and money), here are a few stages where companies typically pull the trigger for rebranding:

• Competitive Pressures: You may need to adjust your branding to stand out. A refreshed or modernized brand helps maintain a competitive edge, signaling your company’s strengths and unique offerings.
• Addressing Negative Perceptions: Sometimes, a company’s reputation takes a hit due to controversies, poor product performance, or misalignment with social values. Rebranding, when done authentically, can help a company distance itself from past issues and start fresh.
• Expansion into New Services or Markets: Companies that introduce new product lines or services might require a rebrand to better communicate their expanded capabilities. 
• Evolving Identity: A local restaurant expanding its menu from pizza to fine dining, for instance, may need a rebrand to appeal to a different customer base and signal the change in offerings. Or the change may be more nuanced, as has been the case throughout Polaroid’s rebrand.
• Lack of Initial Brand Definition: Occasionally, businesses discover they never fully defined their brand in the first place. Over time, this lack of clarity can lead to an inconsistent identity. In this case, rebranding provides an opportunity to establish a cohesive image, ensuring every aspect aligns with your mission and values.

Pros and Cons of Rebranding

By identifying the need for a rebrand and executing at the right time, companies position themselves to grow, attract new customers, and remain relevant in an ever-changing market. In this way, calculated rebrands can be the keys to longevity. That said, the devil’s often in the details. There can be disadvantages of rebranding – mostly related to the strength of the new brand strategy, related cost, and ultimately, the roll-out.

Below, we walk you through the top 10 pros of rebranding – benefits and positive aspects – and six potential pitfalls or cons of rebranding.

10 Benefits of Rebranding a Business

1. Renewed Loyalty: Rebranding often sparks renewed interest and excitement, drawing customers or fans back to the brand or organization.
2. Better Alignment With Current Values: Your organization may need to demonstrate its commitment to modern values and rebranding can appeal to a socially-conscious audience.
3. Increased Market Reach: With updated messaging, a rebrand can open doors to new demographics or geographic areas.
4. Competitive Edge: By emphasizing your value proposition or unique attributes, rebranding can help your company or organization stand out in crowded markets.
5. Enhanced Pride: A fresh, modern brand can boost morale and pride, whether that’s among employees, volunteers, or other contributors.
6. Clearer Brand Communication: With a well-defined identity, companies communicate more clearly, which in turn can boost customer engagement.
7. Digital Optimization: Rebranding often includes an updated website, allowing businesses to incorporate SEO best practices and improved user experience (UX).
8. Reflects Growth: By emphasizing how the business has grown in capabilities and reach, rebranding gives companies a way to showcase their evolution.
9. Responding to Negative Perceptions: Rebranding can be a tool to rebuild trust with audiences, particularly after PR challenges.
10. Future Adaptability: When deployed across new (or new-to-you) social or marketing channels, the rebrand often helps companies adapt to communicate in ways that may have felt stilted or off-brand previously.

6 Risks of Rebranding 

As with any major change in the way you interact with customers, allocate marketing dollars, and promote your business, there can be unforeseen challenges and downsides. 

Before going two-feet-into (or walking away from) a rebrand, take the time to assess whether any of the risks below could apply to your organization. Most of the time, there’s a known risk that you can mitigate with thorough market research, planning, and careful execution. 

Here are six potential risks to analyze:

1. Loss of Established Brand Recognition: A total rebrand risks alienating loyal customers who may not recognize – or simply who may not like – the company’s new image.
2. High Costs and Time Investment: Rebranding can be costly. Smaller companies often struggle to justify the expense. Larger companies can be weighed down by red tape and the challenge of getting buy-in from all stakeholders in a timely fashion.
3. Risk of Backlash: If not handled carefully, a rebrand can result in confusion or criticism from the public, especially if it lacks transparency. Focus groups and intentionality around providing an honest public explanation can mitigate this risk.
4. Internal Adjustment Challenges: Employees need training on the new brand, which can affect operations and productivity if not managed smoothly.
5. Potential for Customer Disappointment: On the one hand, it’s a great sign if your customers loved the old logo or branding and feel attached enough to mourn the change. On the other hand, if a rebrand strays too far from its original identity, it may alienate the people you need most.
6. No Guaranteed ROI: A rebrand doesn’t ensure increased profits and could be a net loss if the process doesn’t score new interest, positive reaction, and translate to broader appeal.

Is Rebranding Right for Your Business?

You may be at an obvious crossroads already – like if you have a whole new service menu or have discontinued products that were once at the heart of your brand. Or you may see rebranding as the only feasible solution if you face decreased market share, have struggled to raise rates or prices, or need to bounce back from a particularly controversial or negative time period.

Or – like the majority of clients we’ve worked with – you’re on the fence: Rebranding sounds like an exciting idea but it’s not quite in the budget this year or you don’t know where to start.

The question of whether rebranding is right for your business requires strategic input, research, and work to answer. Engaging outside experts is often a critical part of the decision to start the rebrand process. Doing so not only alleviates some of the burden on your own teams but also injects an important aspect: A detached view.

At Beyond Marketing, we love it (seriously, we do!) when we have a new client or returning client say some version of: “I think we might need something fresh… .” This can be the start of a powerful conversation – one that resets the trajectory for a brand for years to come. 

And as we marshal resources and ideas to bring the rebrand vision into view, we take a step back to see the new identity much like your customers and audience will. This alone is often very hard for internal stakeholders to do. So if you’re leaning toward a rebrand, just have questions, or want to get started as soon as possible by working with the experts, we’re ready!

Give us a call or shoot us a message today and we will get back in touch with you to talk about your rebranding goals or any other digital marketing needs to help grow your business.