Rebranding is a strategic marketing process in which a company changes its name, logo, design, or overall image in order to create a new and updated identity. This process is often undertaken in an effort to appeal to a new target market, differentiate from competitors, or stay relevant in a constantly evolving market. However, one of the key factors that businesses consider when rebranding is the impact it will have on customer perception.
Customer perception refers to how customers view and perceive a brand or company. It is shaped by various factors such as brand reputation, product quality, customer service, and overall brand image. Rebranding can significantly influence customer perception, both positively and negatively.
Let’s take a closer look at how rebranding can impact customer perception:
1. Creating a Fresh Image
Rebranding gives companies the opportunity to revamp their image and create a fresh and modern look. This can be especially beneficial for companies that have been in the market for a long time and may have become outdated. By changing their visual identity, companies can appear more relevant and appeal to new customers who may have previously overlooked them.
For example, when Starbucks first opened in 1971, it had a simple logo with the name “Starbucks Coffee Tea and Spice.” In 1987, they rebranded with a new logo featuring a siren with a more modern and cleaner design. This change helped them create a more professional and appealing image, which played a significant role in their success.
2. Reflecting Company Values
Rebranding also gives companies the opportunity to reflect their values and mission through their visual identity. This can help build a stronger connection with customers who share similar values. In today’s society, consumers are becoming increasingly conscious of a company’s values and are more likely to support those that align with their own.
The slogan “I’m lovin’ it” was introduced in 2003 as part of a global campaign that saw a significant shift in McDonald’s branding. This shift in messaging reflected their commitment to promoting happiness and positivity, which resonated well with their target audience and helped improve their image.
3. Differentiating from Competitors
In a highly competitive market, rebranding can help companies stand out from their competitors. By changing their visual identity and messaging, companies can showcase their unique qualities and differentiate themselves from others in the industry. This can help attract new customers who are looking for something different and can also help retain existing customers who may have been considering switching to a competitor.
Founded in 1950, Dunkin’ is America’s favorite all-day, everyday stop for coffee and baked goods. In 2019, Dunkin’ Donuts rebranded to “Dunkin'” in an effort to focus on their beverage offerings and move away from the perception of being just a donut shop. Dunkin’ is a hugely successful company. The goal of this rebranding was clear – preserve the legacy, but also expand the brand’s potential. This rebranding helped them differentiate themselves from competitors like Starbucks and attract new customers who may have perceived them as solely a donut shop.
4. Rebuilding Trust
Rebranding can also be a way for companies to rebuild trust with their customers. If a company has experienced negative publicity or a decline in sales, rebranding can help them start fresh and regain the trust of their customers. By changing their image and addressing any issues that may have caused the decline, companies can show their commitment to improving and regaining the loyalty of their customers.
For example, after the 2015 emissions scandal, Volkswagen underwent a major rebranding effort to rebuild trust with its customers. They introduced a new logo and messaging that emphasized their commitment to sustainability and innovation, which helped improve their image in the eyes of consumers.
5. Confusion and Disruption
While rebranding can have positive effects on customer perception, it can also create confusion and disruption among existing customers. Customers may be attached to the old brand image or have a strong association with it, making it difficult for them to adapt to the new one. This can lead to a decline in customer loyalty and may even result in customers seeking alternatives.
For example, when Netflix announced a change in their pricing structure and rebranded their DVD rental service to Qwikster. The announcement and subsequent price hike for both services led to widespread customer outrage and confusion. This ultimately led to a decline in customer satisfaction and a loss of subscribers.
Summary
Rebranding can have a significant impact on customer perception. By refreshing a company’s image or message, rebranding can attract new customers, re-engage existing ones, and improve overall brand reputation. However, it is important for companies to carefully consider their rebranding strategy and make sure it aligns with their target audience’s values and preferences. Additionally, effective communication and transparency throughout the rebranding process can help maintain customer loyalty and trust. With the right approach, rebranding can be a powerful tool for shaping customer perception and driving business success.
