Building a recognisable, trusted brand is often exceptionally hard, but can be the difference between lasting success and quick failure. However, when established brands feel they need to freshen up their images, implementing changes can be fraught with difficulty. A fine line between alienating a loyal customer base and capturing new supporters means a great deal of thought needs to go into any rebranding.

A number of firms have changed their images in the last year – including Airbnb and Hootsuite – with varying success. Now, 2015 has been touted as the year of the rebrand, in particular for small- and medium-sized enterprises (SMEs). This year it seems many marketing agencies could be set for windfalls as a result of a shift towards simplifying brands and updating images, but it doesn’t always make sense to bring in expensive branding agencies.

While it can prove hugely beneficial to update a company image, history has shown many established firms have made catastrophic errors when tinkering with their brand. These can include paying for flashy new logos that get quickly ditched after poor receptions, to making changes to a popular product and enraging previously loyal customers. At the same time, many rebrands have had significant benefits for companies, reinvigorating staid profiles and updating an image for a modern audience.

Why rebrand?
The reasons for rebranding are varied, but usually stem from a need to grab the attention of a stagnant market, stem the tide of departing customers, or to distance a business from a particularly disastrous reputation. One of the more recent company rebrands to hit the news is that of online property rental site Airbnb. The company has already been a hugely successful new entrant into the tourism industry, upsetting the traditional hotel industry by allowing people to easily make money from letting out their properties. Nonetheless, as it rapidly expanded, Airbnb’s management was starting to worry that it did not have a recognisable brand or logo that would cement the company into the minds of users. Therefore it hired a brand design company – San Francisco-based DesignStudio – to come up with a new logo that would be both instantly recognisable and reflect the company itself.

Writing in The Guardian last September, DesignStudio’s Executive Creative Director James Greenfield explained how his team worked out the new logo. “For Airbnb, the first step was to understand the brand on a global scale and specifically the community that underpins the ethos of the brand itself. We sent four team members to 13 cities, staying with 18 varied hosts across four continents over four days. Armed with a basic video camera, they captured their journeys. This combined with more than 120 interviews helped us to understand the spirit of Airbnb and the emotional connection that their community has with the company.”

However, when they did unveil the new logo, many observers thought it had been a terrible mistake. Likened to, among other things, both male and female sexual organs, the logo was widely spread across social media. However, the attention created for Airbnb has led a stronger recognition of the company and to it growing its user base even further, which now sits at around 15 million.

Not just image
A successful rebrand does not necessarily involve just a change in logo or name, but often requires a complete overhaul of the company’s goals, message and culture, as well as their product offerings.

One example is Harley-Davidson. While it has been synonymous with the iconic image of leather-clad motorcyclists, the company was seriously struggling with its finances during the 1980s. With mounting debts and a poor reputation for reliability, the company realised it needed to improve its product if it was going to survive. While the brand has always remained strong, Harley-Davidson’s had become renowned for being faulty at the time. Addressing the situation, management invested heavily in ensuring the bikes were a far better quality, catapulting the brand into becoming the most reliable motorcycle manufacturer in the world.

Although McDonald’s had grown to near global dominance of the fast food industry, the turn of the century brought about a sudden health-conscious trend among many people. Whereas the company had been seen as a staple of many people’s diets, customers were turning their backs on the greasy, cheap burgers for healthier options with fresher ingredients. Realising it needed to do something to stem the flow of departing customers, McDonald’s set about offering healthier options like salads, while trumpeting the supposedly fresh ingredients it was using for many of its products. While not quite as popular as it once was, McDonalds has seen customers return in recent years.

Marketing mistakes
There have been many other rebranding missteps made by overly creative marketing departments throughout the years. US retail store Radio Shack attempted a redesign in 2009 to capture a more youthful clientele, and jettisoning its 90-year history and strong brand image for a simplified name. Renaming itself ‘The Shack’, the attempt at appearing cool was widely lampooned by observers, with branding expert Rob Frankel telling Business Insider in a 2011 article, “Why would anyone throw away decades of brand value, which actually shows up on the balance sheet as an intangible asset, just to try to be cool for a few minutes?”

Even though Radio Shack reversed its decision to rename, it hasn’t stopped the company from haemorrhaging customers and losing money. Things came to a head in February when it finally filed for Chapter 11 protection under US bankruptcy laws, having suffered 11 consecutive quarters of losses.

Other reasons for rebranding can include legal disputes, where trademarks might have been infringed upon, or a changing audience that requires a fresh image. In 2009 another company, US cable television channel SciFi, attempted to change its image and appeal to a younger crowd by changing its name. SciFi also had to find a new name that it could trademark, as the original name could not be bought. Choosing the way young people would supposedly text the name – SyFy – the company failed to realise that this name was also a slang term for a particularly unpleasant sexually transmitted disease. Despite much derision, the channel stuck with its new name.

Bad press
There could be a sudden incident that causes a once admired brand to be tarnished with bad publicity. A company that successfully altered its image is fashion label Burberry. For years, the 150-year old British clothing company had become known as the designer-of-choice for English football hooligans and gang members. The trademarked black, beige and red check pattern adorned caps, bags, scarves and other clothes that many of society’s less-friendly members were proud to be seen in. Things got particularly bad for the brand’s image when two English pubs banned anyone wearing Burberry clothes from their premises.

Recognising the need to distance itself from such a crowd, Burberry’s management decided to overhaul its image with a series of new products, using iconic celebrities like Kate Moss and Emma Watson to promote them.

Christopher Bailey, then the company’s creative director (and CEO as of May 2014), said in a 2009 interview with The Times that the new image was about updating Burberry’s heritage and making it “relevant for today”. He added, “You have to make sure what you do is right for the moment you live in. What makes things relevant?”

Bad publicity can also be caused by unforeseen circumstances. Following last years tragic lost aircrafts, Malaysia Airlines was said to be considering a brand overhaul and change of name to stop people from associating the company with air disasters, with customer numbers plummeting after the crashes. However, such a change has yet to materialise.

Another firm in the news recently for the wrong reasons is payday loan company Wonga. The British company lost considerable amounts of money in recent months because of a series of scandals and fines resulted in losses of £37m ($58.04m). To distance itself from the negative publicity – which included being singled out by the Church of England as being “morally wrong” – Wonga’s management has been rumoured to be looking at a complete rebrand.

Publicity stunts
There have even been some suggestions that rebranding exercises have been done to strengthen the original brand. By announcing a total overhaul of a well-known brand, howls of outrage cause media attention and sentimental feelings to swell around the original brand, therefore bolstering the existing company. While some marketing departments reversing a rebrand after protests may claim that it was their clever idea to drum up support, it seems doubtful that many are really that strategically insightful.

Perhaps one of the most famous examples of a rebranding exercise gone spectacularly wrong is Coca-Cola’s 1985 relaunch. Changing the original formula of the extremely popular drink, the company released New Coke after a number of years of steady decline in market share to rival Pepsi – a company that would also make its own calamitous rebranding mistakes years later. This came after Pepsi launched its highly successful ‘Pepsi Challenge’ ad campaign that claimed to show how people tended to prefer the taste of their drink over Coke. Conducting their own tasting tests, they discovered that people seemingly did like Pepsi more than Coke.

New Coke was developed to be closer in taste to Pepsi, and subsequent tests proved it to be much more popular than the rival drink. The fateful decision to discontinue the original Coke in favour of New Coke was made, announcing the move well in advance of the actual launch. The reaction, however, was not what the company expected. Howls of protest by millions of Americans came in the run up to the eventual release in April 1985, and when it was finally available to buy, the poor publicity meant many refused to buy it in protest.

Realising the colossal mistake it had made, the company decided to launch the old product as Coca-Cola Classic just 77 days later. The company would try to put a positive spin on the debacle, hinting that it was all part of a marketing plan. Trumpeting the return of the original Coca-Cola, the firm released a statement declaring that, “April 23, 1985, was a day that will live in marketing infamy…spawning consumer angst the likes of which no business has ever seen.”

Then company President and Chief Operating Officer Donald Keough announced the return of the original drink, while claiming that customers’ loyalty to old Coke was not something any marketing expert could have predicted. “There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years. The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people.” He added, “The passion for original Coca-Cola – and that is the word for it, passion – was something that caught us by surprise.”

Looking back on the debacle, Marketing Vice-President Sergio Zyman, who alongside then-President of the company’s US business Brian Dyson, had led the rebranding, said, “Yes, it infuriated the public, cost a ton of money and lasted only 77 days before we reintroduced Coca-Cola Classic. Still, New Coke was a success because it revitalised the brand and reattached the public to Coke.”

Such was the furore around the decision to change the formula of Coke that many have speculated whether it was an intentional move to cause a surge in sales of the original drink and grab the attention of the world’s media. However, dispelling such rumours, Keough maintained it was no marketing ploy. “Some critics will say Coca-Cola made a marketing mistake. Some cynics will say that we planned the whole thing. The truth is we are not that dumb, and we are not that smart.”

In 1992, a decision was made to rename the new drink Coca-Cola II. It was discontinued a decade later, after years of neglect from the marketing side of the business. Coca-Cola Classic, by contrast, has been the main focus of the firm ever since, and has gradually seen the ‘Classic’ label withdrawn, emphasising it is now considered the one true Coke.

Shaking it up
Coca-Cola’s long-term rival has become notorious for constantly changing its logo and undergoing rebranding exercises, doing so nearly each decade over its 122-year history. While it was seeing considerable success during the 1970s and 1980s, thanks in large part to its series of blind tests that saw people favour its drink over Coke, Pepsi has since struggled against its rivals’ stronger brand identity. Over the years it has overhauled its logo, but the most criticised rebranding came in 2008. Taking the traditional ‘wave’ design for the logo and turning it into an unbalanced, smirk-like smile, it was panned by both designers and customers alike.

The company hired to do the rebranding – The Arnell Group – were rewarded handsomely for their design, receiving $1m. However, the cost to the company is thought to have been far higher, and some speculate that the entire rebranding effort cost $1.2bn over the three years it took to implement.

PepsiCo, Pepsi’s parent company, has also tinkered with other brands it owns. In 2009 it changed the design of its hugely popular and recognisable Tropicana juice drink. Changing from the old carton design that featured an orange with a straw in it, to a cleaner and more minimal design, the company received many complaints from disgruntled orange juice fans. After sales fell by 20 percent, the company quickly reinstated the old carton.

While many of these examples have shown that freshening up a company image can bring in a new wave of customers, there have clearly been examples – certainly in the case of Coca-Cola and Pepsi – where tinkering with a well-known product or logo can seriously damage the bottom line of a business. Whereas marketing departments might be tempted to constantly update a company’s brand – perhaps as a way of finding something to justify their large salaries – it can often be the case that if a business is already doing well, there’s really no need for changing a winning formula.