A company invests a lot in a name. Branding is one of the most important parts of marketing a product or service. In fact, branding can be the one thing that makes a product into a household name, or become the butt of a joke.

When is a good time to change brand names?

There are three real reasons that signal it’s time for a re-branding:

• When a brand is young      and the name is not descriptive enough, is confusing, or simply doesn’t      sell with its current incarnation.
• When a brand has changed      in such a way that it has outgrown its old, out-dated name. A new name can      help represent its market presence better.
• When an extremely      negative or catastrophic event has occurred, a brand change can help      distance the company from it in order to help save the company enormous      embarrassment or humiliation.

There are very few exceptions, if any, to these three guidelines. When considering re-branding to a new name or look, if the situation doesn’t fit the above — then it’s not worth it.

Costs of Branding

Choosing and changing to a new brand name is a huge undertaking, and it can be costly. Not only does the face of the product or service have to change, but everything in the company has to change as well. This includes letterhead, internal printed materials, and all corporate identity items.

Of course, the new brand roll-out doesn’t stop there. All sales literature, the company’s website, blog, email marketing, presentation materials, and, of course, the product (if applicable) will have to be changed. This can cost a company tens of thousands of dollars to make happen if the product and company is small, and, if the company is larger, then the costs can run into hundreds of thousands, if not into the millions.

Qualify the costs of re-branding against the costs of remaining the same. If the situation is similar to ValuJet re-branding after their merger with AirWays to become AirTran, then the expense is well worth it. However, if the situation is anything less than a disaster, consider the costs versus the outcome carefully prior to proceeding.

The most important questions to ask, when considering a change in branding:

• Will the cost to      re-brand be more than the revenue it generates?
• Will the re-branding      create more confusion for current customers, thereby driving them away?
• How many years are      invested in the current name?

Considering these questions will help the cost-benefit analysis, and influence the final decision in a re-branding situation.

When a company comes up against extremely negative press, an enormous disaster, or otherwise embarrassing gaffe, then it is typically time to look at branding or re-branding as a part of total company overhaul. However, when considering branding changes just to revamp or revitalize a product, consider other changes first, to make the brand stand out — which will save quite a bit of money in the long run.