Thursday, February 25, 2016

Rebrand for Renewal

Among the reasons a retail business might pick a different name are a change in franchise arrangement (a Hilton becomes a Marriott), a change in ownership (the current proprietors want to double down on saying “Our shop is under new management”), or a desire to separate from unpleasant associations (a restaurant got lots of press coverage for repeated cases of food poisoning). Sometimes a change in name is required for legal reasons, as was the case with Yosemite National Park’s concessions.
     Researchers at University of Delaware, Cornell University, and University of Chicago studied the financial effects of a name change among 260 hotels compared to a comparable set of 3,010 hotels that did not change names. The researchers concluded that a name change produced, on average, a 6% increase in occupancy, 4% increase in revenue per room, and 3% increase in gross operating profits. They attributed 60% of these benefits to the choice of the name. But this didn’t operate in a way we might expect: The greatest improvements in the financial figures were with the properties that rebranded to a lower price tier.
     The researchers attributed the other 40% of benefits to the quality of fit between the brand and the characteristics of the business. Researchers at University of Basel and University of St. Gallen in Switzerland found something similar: A business is rated more highly when its name is descriptive of the characteristics sought by customers. If you treasure alpine hiking, you’re more likely to stay at the Grand Pines Lodge than at the Soft Soap Spa.
     When a name change involves franchise or buying group arrangements (Pacific Hardware to Pacific Ace Hardware), there are other financial considerations, such as franchise fees, group purchase savings, house brand effects, and the costs of new signage. And a change in name risks wasting all the good will your brand has previously earned.
     If you choose to keep your same business name, there are still research-based tactics to rebrand for renewal:
  • Repeatedly advertise and publicize the characteristics you want people to associate with your operations. 
  • Point out the similarities of your business to a business that has the features shoppers are looking for. 
  • Use customer testimonials to document your benefits that match shopper preferences. 
  • Stimulate positive associations with the past glory of your business name. Remind consumers of your history (“Serving our community since 1948”). Dress up the shelves and walls with nostalgic items. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Overcome Weaknesses in Business Name
Change Your Name to Reintroduce Yourself
Keep Up-to-Date with Nostalgia Appeals

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