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Be very careful of the word ‘rebranding’

I’m a (very) amateur investor, and over the years I’ve learned a few warning signs that a business may have lost its way. One of those is the word ‘rebranding’ – at least when it’s used incorrectly.

There’s nothing wrong with rebranding, if the term is used correctly. It means that a business has taken a look at itself, or one of its products or services, and decided to change its ‘brand promise’ – the experience it has been promoting with the brand. This could even mean changing what the business, product or service does, but normally it involves changing the way that it’s targeted.

This could well be a healthy sign of a business unafraid to develop. The most famous example of all time may be the rebranding of Coca-Cola from a patent (pseudoscientific) medicine to simply a refreshing soft drink.

However, nine times out of ten, when we hear of a company ‘rebranding’, all it’s done is launch new colours, logos or slogans …often without any real purpose.

And when a business can’t think of anything better to do than make things look nicer, I wonder if it’s run out of ideas.

Usually, the concept of ‘rebranding’ as just meaning ‘paint it a nicer colour’ comes from advertising agencies or even specialist ‘rebranding agencies’. These people are stylists. Their work is important, but it’s a very specific activity which should not be mistaken for rebranding.

We find them hijacking the word everywhere we look, to the extent that even the accepted definitions now compromise themselves to allow for a new logo to be described as rebranding.

But they’re wrong. Restyling is just a tool which can help in a change to a brand’s perception and offering. When I hear of rebranding and can’t see anything under the bonnet, I start to worry.