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3 of the Biggest Risks That Come With Rebranding — and How to Overcome Them Here are some tips to manage three of the biggest risks companies face when rebranding.

By Michelena Howl Edited by Chelsea Brown

Opinions expressed by Entrepreneur contributors are their own.

Rebranding is not an effort to take lightly. There's no shortage of brands that got the wrong kind of attention after changing up their logo (remember Airbnb?) or their name (hello, Meta).

And while a healthy dose of fear is a good thing going into a rebrand (to keep from embarking on the effort frivolously), it shouldn't paralyze you from making much-needed decisions or taking confident action either.

Having just recently rebranded ourselves, complete with a new logo and a new name, trust me … I get it. Here are some of the biggest risks we faced during the process and the ways we got around them in the end.

Related: Does Your Company Need A Rebrand? Here's Why, When and How You Should Do It.

Risk: Loss of brand equity

This is a common one, even for companies that have only been around for a short time. Losing what little recognition you've achieved feels like a huge void. Customers need re-educating. Employees need retraining. It's by far the greatest risk you'll face.

In our situation, the risk was twofold. We had spent the last few years acquiring a number of other companies in the relationship-marketing space to build an integrated full-stack solution. That meant we were rebranding not only the name of the umbrella company that acquired all these brands, but we had to reposition each of them individually under the new, combined entity.

The first part wasn't so hard, since the umbrella company doing the buying wasn't a strong brand to begin with. It was just a placeholder as we built our strategy through acquisitions. So, changing from CM Group to Marigold wasn't a huge risk.

Far more challenging was how to reposition the multiple companies underneath it — each with its own customers, employees and existing marketing and messaging in the field. In particular, the employees of each company were tied both professionally and emotionally to those brands, and upsetting that carries its own risks.

Our solution was to keep the names of those solutions but reposition them as services offered by the parent brand Marigold — "Cheetah Digital by Marigold" or "Sailthru by Marigold," for instance.

This "endorser strategy" allowed us to keep all the familiarity and brand equity each service has gained over the years but present them in a new light as part of a suite of services that are even more valuable when offered together — greater than the sum of their parts — and promote Marigold in the process.

Related: 4 Tips for Launching a Successful Rebrand

Risk: Upsetting company culture

Let's face it, a rebrand is a disruption to the day-to-day business of running a company. Those most affected are often not involved in the decisions made about the brand either. So, employee confusion, resistance and resentment are very real fears.

We were highly sensitive to this fact given the number of companies we had acquired. We didn't just combine different technologies and services through the process, we acquired different cultures, leadership teams and histories.

But part of blending different companies under one banner is the need to establish a new culture that all can share. Again, we needed to create something that was more than just the sum of its parts. It had to retain everything that existed before, as well as add something new and useful to all.

In short, it shouldn't feel so much like a change as a natural evolution.

We did this by communicating the rebranding strategy to all parties before launching externally. This was done in thoughtful stages to ensure the right employees were informed and consulted at the right phase of the process. While, of course, what resulted likely didn't reflect the opinions and expectations of everyone, we felt it was important that all were heard, valued and informed.

Then we evangelized it company-wide, using the process to bring together these formerly disparate teams into a new common ground.

Related: Important Lessons I Learned From a Rebrand

Risk: Alienating customers

Changing the name or functionality of a product or service that customers use is kind of like rearranging the furniture in their house without asking. So, when you make the big reveal, you want a positive reaction. We decided to notify our customer base about the branding changes before the press release went out. That way, they heard it from us and not a surprise in the press.

As part of this process, it's critical when the new brand is unveiled that you emphasize all the ways this new development will help THEM. Remember, a rebrand is not about fancy new logos or juiced-up marketing language. It's about establishing an idea and an expectation with the people who will make or break your business. If you're not rebranding with the customer first, it's a massive risk.

Our goal was to use the rebranding effort not just to reintroduce our company and services, but to really use the rebrand as a way to hit reset on the entire industry we serve. Why did we acquire all these companies and integrate their functionality under one banner? Because the business of marketing has changed fundamentally, and a new kind of relationship-marketing solution is needed to support it adequately.

Make your rebrand less about you or what you want from the industry, and instead make it about the unique value you bring to your customers, moving forward like you're rebranding an entire industry. Set the tone. Change the narrative. Define the space you operate in, and emerge as the new leader by default.

So, yes … rebranding is risky. But given the right set of market forces and company evolutions, not rebranding can be even more so. As long as you're honest with yourself about your intentions and use rebranding to solve the problems both you and your customers share, it'll likely have a positive result for all.

Michelena Howl

Entrepreneur Leadership Network® Contributor

COO of Marigold

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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