With 3.4% drop in sales in 2015 due to increased competition from other fast-casual chains, as well as the arrest of longtime spokesperson Jared Fogle, Subway boldly launched a new look in 2016 to pivot away from its former image. The design, aiming to show the company in a clear and confident light, was the restaurant’s first step toward a new image, and was largely viewed as a positive move from its consumers.

Subway’s rebrand illustrates the importance for companies to adjust their platform in response to negative publicity, increased competition, and other market reactions. A solid brand presence gives a company longevity and recognition, and can positively impact the bottom line, while a negative or ineffective brand presence can lead to a decline in revenue.

A strong, consistent brand is important in today’s market as companies are forced to compete with an increasing number of players across an expanding number of platforms. However, over time most companies will need to update their brand to reflect shifts in the market or changes in the company. But when exactly should you undertake a rebrand? We’ve identified seven important triggers that indicate that a brand update might be necessary.

1. Completing a merger or an acquisition

If your company has merged with another organization or acquired a company, it’s time to take a step back to determine if branding changes need to occur. After an M&A deal, a parent brand is faced with tying together two companies that could differ in everything from messaging and look and feel to company culture and goals. The companies may decide to roll the acquired company under the parent brand entirely, keep the subsidiary’s brand identity to leverage existing brand equity, or make branding updates that meet somewhere in the middle. Ultimately, companies need to make sure that the rebrand accurately conveys to customers what they can expect from them going forward, and the value the merger will bring to their experience.

2. Introducing a new product or service

The launch of a new product or service is a valuable opportunity to consider a rebrand. A new product added to the portfolio merits at least a brief brand review to determine if a shift in messaging, tone, and visual identity is needed to keep the portfolio cohesive. The extent of a rebrand will depend on how far the new product takes the company away from its core mission and brand promise. If a traditional wallpaper company, for example, begins offering brightly patterned, removable wallpaper for college students’ dormitories, it should update its messaging and visual identity to reflect the inclusion of customers of all age ranges and budgets. While the new product offering has expanded the company’s market, it has not changed the company’s mission as a wallpaper manufacturer and so a more extensive brand makeover is likely not needed. On the other end of the spectrum, when Google ventured into driverless cars, health care, and other fields it found itself pulling so far away from its core mission that it created a new entity in Alphabet to function as the parent to the company’s broad portfolio products, services, and innovations. This helped eliminate potential confusion in the marketplace and allowed Google to continue to hone in on its original brand promise.

3. Facing a new competitor or product

With an increasing number of players on the market, making your organization stand out is vital for success. If you’re facing a new competitor, or an existing competitor debuts a market disrupting product, it’s time for you to assess if brand changes are needed to ensure your market differentiators and brand promise resonate within the shifting market. Initially viewed as indistinguishable from other discount retailers like Wal-Mart and K-mart, Target pivoted its focus in the ‘90s to offer pared-down, high-quality merchandise at lower prices. The move helped Target stand out from its competitors and become the second largest discount retailer in the U.S. Studying what your competitors do well and where they can improve can help you capitalize and promote on what makes your organization or product special so you can reach your target consumers and avoid blending into the background.

4. Spotting changes in customer demographics

No audience is static, so regularly checking in on your market’s demographics, values, needs, and communication styles helps ensure a stable, long-term brand approach. If you notice long-term,
sustained changes in any aspect of your customer profile, from age, location, and gender to product usage, it is time to explore if there are segments of the brand that need a refresh. For more than a decade, consumer brands have wrestled with this challenge as Millennials increasingly begin to occupy professional roles with purchasing power. The largest generation in the U.S. workforce is focused more on authenticity and social consciousness than luxury name brands, leading B2B companies to adjust their strategies to effectively target the Millennial buyer.

5. Experiencing a dip in market share

Dips in market share or increased customer churn should set off alarm bells to examine if your organization isn’t meeting your audience’s needs. Your brand should be built on the expectations of
your customers; if your brand is misaligned with these expectations, consumer satisfaction can plummet and so will your bottom line. When sales for Pabst Blue Ribbon beer dipped beneath a million barrels in 2001 due to changing consumer palettes, the company rebranded to promote itself as a small venture selling quality, American-made beer to a largely “hipster” community. The rebrand drove sales up 25% in 2009 alone, and the company sold 92 million gallons of PBR in 2012. Identifying consumer expectations and what you can do to better meet those needs can help shape your updated brand identity into a stable presence.

6. Exploring a new market or demographic

Anytime a company is entering into a new market or exploring a new demographic segment, the organization should assess if its branding reflects this new population's values and communication preferences, and conduct a thorough examination of how its offerings meet their needs. Companies face this challenge when expanding internationally. For example, the Dr. Oetker brand changed its name to Cameo in Italy to sound more Italian and easier on the ear. Taking a region's language and customs into account ensures a smoother transition to a new market, and builds a strong foundation to increase brand awareness in a new population of customers.

7. Confronting an extended period of negative publicity

Negative publicity may shake your organization’s confidence, but receiving criticism provides direct consumer feedback that savvy companies will use to inform an updated brand identity. Done right, a rebrand after a PR crisis can demonstrate a company’s willingness to embrace change, leave a difficult past behind, and show a commitment to meeting customer demands. After Andersen Consulting separated itself from the accounting firm Arthur Andersen, the company changed its name to Accenture, prompting criticism for a name many felt was phony and made up. The company’s decision to keep the name ultimately proved fruitful; after the accounting firm’s affiliation with the Enron scandal came to light in 2002, Accenture was able to escape Andersen’s brand destruction with a positive identity of its own.

Interested in learning more about the tools that can help you develop a strong brand presence? Download the research brief “Top 7 Tips for a Successful Rebrand” for key strategies on how to cultivate your brand identity

Hanover Research