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I am interested in case studies of the ROI companies have achieved from a rebrand rename effort.
Hello! Thanks for your question on case studies of the ROI achieved through re-branding or renaming. The most useful sources I found to answer your questions were an article by Landor and an industry report by Coleman. In short, brand driven companies have proven to be twice as profitable as their category average. Additionally, brand accounts for approximately 1/3 of shareholder value. While not all improvements can be assessed in terms of monetary value, there is almost always a clear impact from re-branding or renaming, whether positive or negative. Intu, CVS Pharmacy, Pabst Blue Ribbon, and Lowes have successfully re-branded, resulting in a positive impact, while SBA's attempt to rename certain programs and Radio Shack's attempt to re-brand itself has met overwhelming disapproval. Below, you will find a deep dive of my findings.
CASE STUDIES
1. Intu
CSC (Capital Shopping Centre) Properties operates 15 physical shopping malls across the United Kingdom. In the current digital age, physical shopping outlets are having to be creative to remain competitive. Initially, the 15 properties were individually branded; however, this resulted in a lack of recognition. Therefore, the company created one common name, Intu, and each center featured a newly designed bird. Both the name and the symbol represents the joy customer's experience when visiting one of the facilities. The collective new name and image served as a point of recognition for customers, thus enhancing familiarity associated with the brand.
Results:
2. CVS Pharmacy
As a pharmacy, CVS represents a place focused on the physical health and well-being of their customers. However, the fact that they sold cigarettes countered this image. Although cigarettes accounted for 4% of total sales, CVS was the first pharmacy to stop selling tobacco products. Additionally, the company changed the name from CVS Caremark, which was insignificant, to CVS Health, which is more readily associated with living a healthy lifestyle.
Results:
- The change generated over 100,000 tweets in support of the company.
- Despite expecting to lose $2 billion in revenue, the company reached a record high net revenue of $37.1 billion in the quarter following the re-branding. This represents a 12.9% increase in net revenues.
- CVS made up for the loss associated with tobacco revenue by increasing its pharmacy services business, which saw a 22% increase in revenue to $23.9 billion, more than making up the difference.
3. Pabst Blue Ribbon
Pabst Blue Ribbon is an inexpensive, commonly found beer in the U.S. It is frequently associated with the younger crowd, especially those seen at frat parties and the like. When China overtook the U.S. and Germany as the world's largest beer drinking market, a third party licensed the brand, formulated a slightly different version, and is now marketing it to upper middle class Chinese consumers as an artisan beer. This has served to increase the millennial customer base here in the U.S. Continuing along this line, the company then introduced "Not Your Father's Root Beer," which is an alcoholic soda, in 2015.
Results:
- What is considered a cheap, unsophisticated beer in the U.S. has been re-branded as an artisan beer in China, where it is being sold for $44.
4. Lowe's Home Improvement
Under the direction on a new CMO, Lowe's Home Improvement re-branded its image using a bit of humor through unicorns and flamingos in early 2016. The strategy is to "Make Your Home Happy." Executives stated the re-branding was an attempt to appeal to Lowe's core customers, who are a bit older, as well as bring in the increasingly important millennial crowd. In 2015, the company reached $59.1 billion in sales under the old "How To" brand. The new image resulted in positive results in 2016 for the company.
Results:
- For the fourth quarter of 2016 (after the re-branding occurred), Lowe's EPS was at 86 cents per share, which is 7 cents above the estimate, and 27 cents greater than the previous year.
- Revenue for 4th quarter, 2016, was $15.78 billion, or .39 billion more than was expected. Revenue for one year prior was only $13.24 billion.
- Where the company expected a 2.4% increase in same-store sales during the quarter, they actually achieved a 5.1% increase.
5. SBA
SBA decided to rename a couple of their loan programs. The company chose to change the name of the 7(a) program to SBA Advantage, and the name of the 504 loan program to SBA Grow. Many customers wondered why the company was changing the program names, as there was no indication this would enhance performance. Basically, if it is not broke, why fix it? Furthermore, the name SBA Grow is often associated with a marijuana grow house, resulting in a high disapproval rate.
Results:
- The SBA Advantage change received only 11% support, according to a Coleman survey, with an 81% disapproval rating.
6. Radio Shack
Radio Shack has long been perceived by the public as where their grandparents shopped, or where amateur hobbyists purchased odd batteries. In an attempt to be seen as a true competitor in electronics and technology, the company renamed itself "The Shack."
Results:
- Unfortunately, "The Shack" is a term typically associated with a run-down location where questionable activities occur. This did nothing to boost the company's image with the public.
CONCLUSION
To wrap it up, I have provided 6 case studies companies that have successfully or unsuccessfully implemented re-branding or renaming, including Intu, CVS Pharmacy, Pabst Blue Ribbon, Lowe's Home Improvement, SBA, and Radio Shack.
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