The Power of Rebranding

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Art note: A photo of Richard Branson accompanies this article.

Distributed by The New York Times Syndicate

Q: Many companies spend a lot of money on rebranding. Is changing a business’s name necessary when there is a change in ownership? And is it OK to have one brand for all your companies? Can it affect customer confidence in the various products and services one may offer?

– Tanga Roy, Kenya

I have just spent three days traveling around the U.K. to mark the launch of Virgin Money, our new bank, following the acquisition of Northern Rock, which was nationalized in 2008 and we bought on Jan. 1 of this year. The process of rebranding Northern Rock’s 75 branches over the next nine months will provide us with a distinctive platform for shaking up the industry. There will be new signs, new furniture and a more welcoming feel – our staff will not be working behind glass barricades. Those will be the first steps, but the rebrand must go deeper, into the very culture of the business, providing leadership, inspiration and a spirit of empowerment to the 2,000 employees who just joined Virgin Money.

That said, we were concerned about changing the Northern Rock name, mostly because the bank is very well known, especially in the northeast of England – we worried that this might create animosity among longtime customers and our new employees, who were rightfully proud of the business. But there was genuine enthusiasm and excitement at the launch events, and the Virgin team was made very welcome.

While the decision about when to rebrand a company we’ve acquired depends on many factors, we have found that, far from hindering our growth, branding Virgin businesses with our name has helped them to punch well above their weight while creating a very distinctive culture that ties the dozens of companies in our group together, across its variety of sectors. Virgin Money is using the history of our group as the cornerstone for a marketing campaign for the rebranded Northern Rock – the ads will show how we have challenged many industries to make things better.

Our approach to branding has been successful because we have built the Virgin Group on a simple mission: to do things differently for our customers, improving their experiences and perhaps their lives. It should not matter whether you are on one of our planes, a member of one of our health clubs or talking to a friend using one of our mobile phone services: the experience should stand out as distinctly Virgin.

Customers asked to describe the Virgin experience might point to our staff’s cheery helpfulness; our focus on thoughtful, simple design; the way we add a human touch wherever possible; and our humor as well. The whole package should make customers feel good about our brand and want to return for more.

Maintaining customer confidence in the brand is key, and so whenever we consider rebranding an existing company, we take a close look at the business proposition, the service and the quality and training of the people before planting our distinctive logo and splash of red.

When we were preparing to launch Virgin Trains in the late ‘90s, industry executives laughed at our plans to build a new fleet of tilting trains, and to provide better food and service – along with our goal of doubling passenger numbers. This was impossible, we were told. And since we couldn’t buy new trains for a few years, we had no option but to repaint the train cars we’d inherited from British Rail.

One of our first steps was training our team to change the way they dealt with customers, and this proved to be the best rebranding effort possible; our terrific staff helped our customers through the difficult period of delays and repair work. In the years that followed, our new fleet of trains, modernized tracks and faster journeys helped our employees to deliver better than ever, and we achieved among the highest customer service ratings in the industry. Customer numbers have more than doubled since 2006.

When we were preparing to launch Virgin Media in 2006, which was intended to offer cable, Internet, mobile phone and landline services, we took a more cautious approach. Rather than rebranding the company right away, we ensured that the two companies that merged to create NTL:Telewest got their new product and customer service levels right – and had completed their merger with our company, Virgin Mobile – before we embarked on the major rebrand to Virgin Media. We did this in part because we were worried that NTL:Telewest could not yet achieve the level of service expected of a Virgin business. The company provided broadband, cable and phone service to more than 5 million homes: any disruption or poor service delivered under the Virgin name would have affected our other businesses.

After more than a year, we rebranded NTL:Telewest as Virgin Media and four years later, the company has trained the staff, refocused its business proposition and improved its products. It is now investing heavily in “Virgin-ness,” including a new humorous advertising campaign with Usain Bolt, the Olympic sprinter.

Finally, if you are considering whether to put your brand on a business your company recently acquired, remember to share your message with your new employees about your purpose and culture. Meet with them, take notes on their suggestions and follow through. With their support and enthusiasm, you will win over customers, build your company’s expertise, expand what your business has to offer, and derive much more value from this rebranding.

(Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. He maintains a blog at www.virgin.com/richard-branson/blog. You can follow him on Twitter at twitter.com/richardbranson. To learn more about the Virgin Group: www.virgin.com.

-New York Times News Service.