When To Rebrand

Tropicana lost 20% of unit sales in 6 weeks with better design.

January 8, 2009. New cartons hit shelves. Cleaner type, a fresh glass of juice, $35M behind the launch. The work won every room it was shown in. Then it hit the aisle, and shoppers walked right past their own juice. Some assumed it was a house brand. Some reached for Minute Maid. By February 23 the old carton was back.

Nothing was wrong with Tropicana. Category leader, north of $700M in that line. No crisis, no drift. A company tired of looking at its own packaging, mistaking that feeling for a strategic problem.

Episode 13 is the last of the season - When is the right itme to rebrand.

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So it's 2009, and a new carton hits the shelves inside the grocery stores. January 8th, 2009, specifically. And so the old carton was selling orange juice. It had a straw in the middle, and it's been there for decades, straight through the orange, and the whole brand built themselves around it. R now, a branding agency, took it off and decided to put a glass of orange juice instead with a new type, cleaner design, and a new cap. The cap was designed to look more like orange juice. They spent over $35 million to try to push this product in, and a lot of people liked it. People were sick of the old design. The work was clean and it was modern and you know it won the pitch. And then it hit the aisle. People walked past it thinking that it was the house brand, that it was a generic product. And some people bought Minute Made instead of it, and they didn't think that it was part of Tropicana. And you can see the before and the after. So from January 1st to February 22nd, the units dropped, the sales units dropped down 20%, which cost them over $30 million. And then February 23, which was only six weeks later after launching the product, they decided to go revert back to their old design because they knew that this wasn't working. And here's the thing: the thing is, nothing was really wrong with Tropicana. Tropicana was a category leader. It sold more orange juice than anybody else. They had $700 million in the line. There was no crisis, there was no significant drift. It was a company that was tired of looking at their own packaging. So they mistook that feeling of being sick of their own packaging as a strategic problem in order to just modernize their own packaging. They cut and they cut into the one thing that the brand could not afford to use. The thing that people remembered them by, that they knew them by, that brand distinguishable asset. I'm John Luke. Welcome to Position to Win. There are two types of brands: the ones that accept their positioning in the market and the ones that challenge it. And this show is for the challengers and for the founders and CMOs who are responsible for making that change happen. This is episode 13. This is the last of season one. And so we're going to talk about the question that I get asked more often. And that is when is a good time to rebrand? Let's talk about rebrand. Rebrand can be split into four different buckets, right? We got four different operations, risk, and cost. So if you think a rebrand can simply mean a refresh or a repositioning or a total rebrand or a new brand. Episode six, we talked about brand identity and the main core touch points that includes in brand identity. So we have the name, we have the verbal identity, the visual identity, the experience, and then the behavior. And that is overall the full stack of verbal identity of all the main touch points that you need to know. Let's first talk about refresh. Refresh is when the visuals change only, the positioning holds, the language stays the same, everything you know about the brand basically stays the same, and there's a modernization that's taken. Repositioning is what we talked about episode 12 last episode. And that's when the meaning moves, the name stays, but the mental slot moves in people's head. So if you think about Old Spice, right? We talked about that. Wyden and Kennedy did a research, and 60% of body wash was bought by women. This is after decades and decades of talking to men in the shower. Now, all of a sudden, the positioning changed and stopped talking to the user and started talking to the buyer, talking to the women that actually bought the product. Now the product itself didn't change, the name didn't change, but the person being addressed in the campaign did, in the branding did. And so that's a repositioning. Notice that the repositioning also includes a refresh and modernization, and obviously there's graphical implementations to it. But the way that people see the product completely changed. And then there's rebrand. A rebrand cuts into the name, it changes the name and the architecture. This is the most expensive work as you are losing some of the core brand equity that you've built up. And you do this after crisis, or you do this maybe on their potentially expansion, or when the name doesn't fit anymore. So this is the first thing that people say, but it's not often what they mean. And oftentimes a rebrand doesn't actually mean that they are actually looking for a brand new brand entirely. And then there's a point that people often forget. This is the new brand. This is the thing that a lot of times people don't really talk about. So for example, Lexus in 1989 created a different brand, a different marquee, its own name and logo to address luxury buyers that Toyota, who owned Lexus, couldn't target. So rather than Toyota diluting their brand into having a premium line and addressing the whole market, they created a luxury brand. Yes, this is a very common strategy. Ford did the same thing with Mustang. Mustang is their premium line, and while keeping the Ford name still behind it. Now we talked about this a little bit more in episode four when we talked about brand architecture. We talked about the different architectures and what the purpose were. And so if you really want to revisit that, feel free to go back to episode four. So in episode four, we talked about the brand architecture. But either way, a brand new name gives you the ability to go somewhere that the parent brand or the other brand is unable to go on its own without diluting some of its brand equity or being able to speak to the same audience with the same type of appeal. Sometimes the parent brand can't credibly go to the same place that a subbrand can. When you think about these in entirety, a refresh doesn't really need permission. You don't need permission to go get a haircut. You should just get it and improve the way you look. Repositioning does need a reason. You are going to change the way you are addressing people because the way you're currently doing isn't working. A name needs proof. This a name is a significant change. So you need evidence that the current name isn't working. Every Brie brand is a decision about what you want to change, what you want to keep the same, and how deep you want to go, and how unique you want to be positioned in the market. And what are people remembering you for, and where's the appeal? And those are these types of concerns that you need to address at the table. And then you really understand where the dissection is and what is the goals you're trying to accomplish and where you want to go from there. There's a few conditions that come to a rebrand that I think is worth mentioning. And one of them is actually the most obvious it's when the business has already changed. Apple Computers came out with the iPhone. So then they dropped the word computers. In 2013, the CFO of Dunkin' Donuts said, Hey guys, we are a beverage company. In the annual report, he said 57% of our sales today is tied to beverages. People are drinking coffee and beverages way more than donuts. So by 2018, that became 60% and it grew time and time again. So Dunkin' Donuts evolved to being a coffee business with a donut in the name for five years. And then in August 2017, they publicly said that they were considering dropping the name Donuts and just keeping the name Duncan. So they explored this with a few locations. So across 8,500 US locations, they just decided to practice this on a handful of locations. So next to their flagship location, a mile away, they started a new location where they just called it Duncan to test out to see how people experienced the brand and what people felt and things like that. And they found that linguistically people were already using the word Duncan to abbreviate Dunkin' Donuts. So it worked. But they waited a whole year before implementing this live to the brand. Another thing that happened is Coca-Cola found that people started abbreviating Coca-Cola for Coke. So then they launched a brand name Coke. So when the business changed or when people call the brand a nickname, this is a good opportunity to capitalize on that and to double down and create a new brand to match what's currently already happening in the market. See, Dunkin' Donuts didn't teach America the new name. America was already calling it Dunkin'. Their own announcement said so. Customers had already done the rebrand. The company was just the last thing to make it official. And they kept everything that was iconic about the brand. They kept the pink, the orange, the 1973 sans serif typeface. And they only removed one word. And they left all their other recognizable parts still standing. And the proof stands. That rebrand was simple and it worked. Another time to rebrand is when it's costing you quietly. When a name can limp around and it's failing years over years, and maybe the sales is just not growing and it's not taking as much traction. Maybe you're having a difficult time trademarking it or able to get the domain. You can actually point at the revenue that it's costing you. If you look back at episode five, when I talked about a brand name, you might find that, hey, you know what? Our name is too generic. We're paying too much to earn the slot in people's mind, and there's more market potential. If we were to change the name into something that's more memorable. And plenty of brands have done this. And when the name is hard to pronounce, or when you search and you're finding your competitor or just a category term, you know, this is also times that you might want to consider rebranding the name entirely. And then separately, when you have a categorial crisis event that's happened, and you need to kind of abandon some of the assets because they associate you with an image that you no longer want to be or you no longer want to tie yourself to. This was a chapter that you do not want to continue and you want to start over and start a new blank page into what your book is. This is also time that you really want to start from scratch. You see, a lot of times a rebrand comes from boredom. And this is a problem that Tropicana had. And it's a big problem. You see your logo every day. You see it maybe 10,000 times. Every store, every invoice, every signature, and your buyer has probably seen it twice. And the one of the times they were basically not paying attention. It was in a crowded aisle, it was walking past, they were clicking through a commercial, etc. So they were not experiencing the same boredom that you are. And that internal fatigue can feel like an insight. So before you touch anything, find out what you'll be destroying. What do people remember and why do they love it and what do they love about it? Coca-Cola understood this really well very early. In 1915, with a shelf full of imitation as they were already becoming market leader, they sent out a design competition of how can they make their shape of the bottle the most distinguishable brand asset that's out there. They wanted their bottle to be so distinctive that you would recognize it by feeling it in the dark with the lights off, and that you could recognize it laying down broken on the ground. That's the definition of a load-bearing asset. You take the name off, turn the lights off, and it's still Coke. In episode 10, we talked about distinctive brand assets: color, shape, sounds, character, and the layout, and we talked about the smashed S. So, what is load bearing? If you cover your name, do people still know it's you? What's working and what's not working? Was it where is the structural work? With Tiffany, we have the Tiffany blue. Is it the contour of the shape of the bottle, the orange with the straw from Tropicana? Or is it really just a neutral element where people recognize it, but it's not loaded, it's not specifically to you, and you can change freely. Or maybe this is working against you. Maybe it's recognized and it reminds people of the version that you're trying to leave behind. Or it reminds people of the category when you're trying to be a category outlier. So a lot of times companies do this by opinion. You know, somebody says, hey, this this logo feels outdated. Look at this in a series of competitors. This is boring. But MasterCard did this with confidence. In 2019, they did a really dare move, and that's actually to remove their name entirely from the brand with just two circles. Two circles alone without a simple overlap. The amount of nerve and audacity it would have taken them to say that they can just own those two circles. That is MasterCard. This took 20 months of global research first, and they realized that 80% of the time people recognize the two circles without the word, and they already associated those things to the brand. And only then, when this happened, they knew that they could remove their name from it, that the name would exist without it. Now look at the Tropicana example. They removed a distinguishable acid, they removed the orange and the straw, and they never did that research. And the people decided to buy the competition instead. And they lost a core customer base, so they had to revert back. And because that distinguishable acid was something that they left behind. So this is the opposite outcome, but they both took away elements. They both simplified. And the reason people take away elements is tend to be more memorable, to have higher brand recall. However, without that type of brand research, and without knowing what you're actually being remembered for and what's being distinctive in people's brain, you won't actually know what you can safely take away without losing your brand equity. So you can subtract a distinctive element with an opposite of outcome. Tropicana did really badly, where MasterCard did really well. So on the order of sequence, where do you start with your brand? Well, I think the most important thing is you start with positioning. Positioning is always first. If you can't say what slot you're taking and from who, then you still need to work on your positioning. Your positioning is what makes you different in your market. So this is the key in branding. We need to work on your positioning first. Then there's the name, and then there's the verbal identity. And inside that verbal identity, you have the belief, the voice, and the tone, right? With the verbal identity pyramid, which we talked about in episode seven. And then you have the visual identity, which is often where most companies start. And this is often why a rebrand or a brand refresh produces a nicer brand version of the same problem, where they don't have clear positioning or really unique value proposition, but their logo feels more modern. And however, they're not really ownable or distinguished. So visual identity is where most brands start, and this is why most rebrands produce a nicer version of the same problem. It just looks more modern without addressing the core issues. And then there's experience. We have the onboarding, the invoice, the hold music, the follow-up, and that pleasant surprise that they are experienced. And then there's behavior. And behavior is important because it's what your brand is standing for, your brand is doing, they've explicitly not doing. So you can commission a name and you can commission a color and an identity system, but nobody can really commission your team on how to handle a refund at four o'clock on a Friday when your team is trying to sign off for the weekend. That type of experience that they're gonna have is decided based off of the behavior. Behavior is the only surface that a branding agency isn't going to be providing for you. You have to decide this on your own. One of the easiest things that I like to do is not learn always from successes, but look at failures. And what are the key main ways that people fail in rebrands? So rebrands can fail in two separate ways. Obviously, the loud way and then the quiet way. The loud way is the scariest, but actually the best way. So the loud way is that you have a clear drop in sales, the press is complaining about it, the customers are complaining, and then this creates a lot of noise, and then you understand what your customer is complaining, and you are able to make a change. This is survivable and it's legible. However, this may cost you, right? For Tropicana, it costs them six weeks. Six weeks of old carton, and then they were able to revert back. And it was a painful, it was expensive, but then it was over, and the loss was over, and they were able to relearn. So then there's the quiet way. So there's no cliff, there's nothing measurable that breaks. And what happened is you erase something, you erase the recognition, the cue that let people remember you in the first place. That differentiator that led people to you in four seconds makes you blend in with everybody else. Maybe you look modern, but maybe you look like all the rest of the new modern things that are happening now. And then what can happen is that your business becomes slowly easier to ignore. You don't really stand out from the marketplace, you're just like everybody else. And this is a concern because as time goes on, you just become slowly forgotten. My concern is with the quiet rebrand failures is when there's no revolt, this shows that there was never enough attachment for people to revolt for. If somebody's revolting for your brand, it shows that they have passionate attachment to what you currently have. And then you find out after years and years over time that you're not able to convert the same and you don't have the same type of brand loyalty, and you just are kind of blending in. You see, I know everybody hates the loud failures because the loud failures are obvious and they're embarrassing, but the loud failures give you real feedback, and with real feedback, you can do something. And when the quiet failures, the quiet ones, you might get a false sense of security when really you don't get any real feedback and you don't know anything to improve from. And this is the most dangerous feedback that a lot of people aren't thinking about and they're not addressing. And it's the one that everyone approves and nobody remembers. And the question worth asking is is your brand recall improving or decreasing? Is your net promoter score improving or is it decreasing? There are things in branding that should be measured, and those are two core assets that will be able to give you signs of brand health and what direction are things going. So this is wrapping up the first season. We went through 13 episodes. We started with what our brand actually is and how positioning works, how differentiating works, then the name, the language, identity, and the brand archetypes, persuasion, memory, and how to diagnose a brand with what's broken and when the numbers go soft or when the numbers aren't really proving as much. And this is where we finished season one, where we talked about when is a good time to rebrand. So brand strategy isn't the art of changing things, it's knowing what deserves to change and what has earned a right to stay. Knowing what to choose is essentially brand strategy. So I want to thank you for spending the first season with me. We've talked about the core brand positioning elements from the beginning to the end. And next season, we're gonna open up with real files, real engagement, what the company has looked like when they started coming to us, what we found, what we changed, and then what happened. So look forward to seeing you next time.