This is part one of a 10 part series on Essential Benefits of Trademark Registration. This week, the topic is Avoiding a Busted Brand: Preventing the Pain of Forced Rebranding through Trademark Registration.
I’ll be talking about five painful problems that can happen for your business when you don’t take the correct steps to develop your brand, and how to avoid those problems or get started in handling them.
Imagine you’ve been using your business name, logo, or slogan for several years, building a good base of local customers. You make moves to expand your market, and suddenly you get a cease and desist letter from another business that has better rights to the trademark, or you go to file an application for federal registration, and the search to identify any possible problems uncovers an identical trademark for similar goods and or services, meaning there’s no way you’ll get your application approved.
What was a time of exciting expansion has now become a horrorscape of being forced to rebrand. Rebranding is painful enough when you want to do it and plan for it. Being forced to do it quickly on someone else’s timeline can be disastrous.
Let’s get into the top five painful issues involved with forced rebranding.
1. Financial Cost
Rebranding can be a significant financial burden. Without even going into the possible loss of business that can come from rebranding, costs of rebranding include having new logos designed, having new marketing materials designed, updating signs, changing packaging, updating websites, and potentially launching marketing campaigns to reintroduce the brand to the market.
That’s a lot of expenses, and they can add up to tens of thousands of dollars. Even if you’re just starting out or handle all those things yourself, that’s going to cost you in terms of hours you won’t be able to spend working on the core of your business, or extra hours at the expense of your personal time with your family and friends.
2. Loss of Brand Equity
Rebranding means letting go of the brand equity that the previous brand had built over time. Your brand is what people associate with the service, quality, and trustworthiness of your business. Those things are crucial to a business, and they don’t get associated with a brand overnight. It takes hard work and countless hours. Once the traits you want associated with your brand have been established, They create customer recognition, loyalty, trust in new offerings, and referrals from existing customers. It takes a while for that to rebuild when rebranding happens.
Sometimes it works fairly quickly, like when Facebook renamed its parent company Meta, with Facebook remaining as the name of just the part of the company handling that social media service. Or when Kentucky Fried Chicken changed to KFC. But more often it takes a very long time, like when Netflix re branded its DVD by Mail Services as Quickster, which caused the company’s stock to fall, and Netflix put the mail service back under the Netflix name. So that failed completely. Or when PricewaterhouseCoopers briefly changed its business consulting branch’s name to Monday, which just confused people and had none of the connotations of experience and quality the original name had.
Loss of Brand Equity Can Create Confusion
Loss of brand equity can create confusion among consumers. A sudden and significant change in brand identity can confuse existing customers because they might not immediately recognize the new brand, leading to a temporary drop in customer engagement and sales, like what happened with Netflix. This confusion might also push consumers to competitors who still have a familiar brand.
Loss of Brand Equity Is Loss of SEO and Online Presence
Loss of brand equity is also loss of SEO and online presence. If your old brand had established an online presence, changing to a new brand can at least temporarily negatively impact search engine rankings, website traffic, and social media following. Keeping SEO phrases connected with the old brand may seem tempting, But that can still cause you to be accused of infringement by driving customers of the other brand with the superior rights to the trademark to your website behind the scenes.
3. Communication Challenges.
Rebranding requires a lot of communication. You have to effectively communicate the reasons for the rebranding to customers. partners, and stakeholders like employees and shareholders. It’s crucial to do that. Poor communication can lead to misunderstandings, negative perceptions, and a decrease in consumer trust, all of which can lead to decreased business.
How much effort will you put into explaining the rebranding to these groups and convincing them they can expect the same quality and trustworthiness they associated with the old brand? How do you craft a message about that without admitting you’re rebranding because there were infringement issues?
Even if you feel you were in the right and shouldn’t have to rebrand, airing those sentiments doesn’t make you look like a business that makes good decisions and is a positive presence. Crafting the wrong message can lead to consumer skepticism and resulting loss of business in the short term and possibly the long term.
Customers aren’t the only ones who may be affected negatively by forced rebranding. It can also meet with employee disruption and internal resistance.
Change Is Hard for Most People
Change is hard for many people. Who Moved My Cheese wasn’t a bestseller in the late 90s and early 2000s for no reason. Employees, especially those who were highly connected with the old brand, may feel disoriented or disconnected during a rebranding process. They may even wonder about the long term stability of the company and their jobs. This can impact morale and overall productivity during the transition due to potential resistance or lack of enthusiasm for the new brand. Building employee enthusiasm for the new brand can take time.
4. Legal Hassles.
If you’re forced rebranding as a result of a cease-and-desist letter, a lawsuit, or other legal dispute, you have to take extreme care to make sure your rebranding complies with all terms of any settlement or judgment. Sometimes the business claiming infringement will have to approve your new name or logo as part of the settlement to be satisfied they are different enough to ensure no additional infringement or confusion among consumers. Sometimes the court may order you to pay damages to the business claiming infringement.
You should also be consulting with the trademark attorney as you rebrand to make sure your new branding won’t land you in any additional hot water with infringement of yet another brand that will lead to another forced rebranding. Not many businesses could survive two forced rebrandings in a short time.
5. Risk of Failure
Number five in our list of five potential problems caused by a forced rebranding is the scariest potential problem with the forced rebranding as if those first four weren’t scary enough. Yes. This one’s worst. It’s risk of failure.
Rebranding is not always successful if the new brand does not resonate with consumers or fails to deliver the desired results. The business may fail, or the business will need to invest further resources in correcting the situation.
Rebranding by Choice vs Forced Rebranding
None of this is to say rebranding by choice on your own schedule is a terrible idea. Many, many highly successful companies have done just that. Google used to be called Backrub and Amazon used to be called Kadabra. No kidding. Voluntary branding is based on what you decide is best for you, not what someone else decides is necessary. You get to take your time, determine when it will fit in with your firm’s budget, and roll things out on your terms.
Forced rebranding happens on someone else’s timeline, which is often short and is unplanned. This means resources have to be thrown at the situation quickly. Resources that were undoubtedly allocated for something else important. You don’t have the time to build consumer confidence around the rebranding when this happens the way you do when you do a voluntary rebranding.
You CAN AVOID Forced Rebranding
The great news is you can avoid the nightmare of forced rebranding. If you already have branding, you should consult with an experienced trademark attorney to make sure none of it is infringing on someone else’s brand. If it is, you can work on your timeline to rebrand, assuming the other brand doesn’t notice the infringement before your rebranding is complete. If they do, knowing you have a rebrand already underway may make them more amenable to agreeing to your schedule rather than opposing theirs.
If you don’t have branding in place yet or are considering a voluntary rebranding, you can work with a branding expert and an experienced trademark attorney to make sure your new brand is one that can truly be yours without question, one that isn’t similar to any other out there for similar goods or services.
That’s a sound investment that will pay off tremendously in the years to come and take a significant issue off the mental plate of things that can keep a business owner up at night worrying. In summary, rebranding due to not having properly vetted, registered, and enforced a trademark can involve financial costs, disruption, confusion among customers and employees, legal complexities, communication challenges, and the risk of damaging the brand’s equity.
The sooner you begin working with a trademark attorney to make sure your brand isn’t infringing, address it as quietly as possible if it is, or ensure your new brand is fully protected against infringement by others, the sooner you can put this danger behind you and focus on running and building your business.
