When I moved into my apartment in Brooklyn, there was an Italian restaurant down the street. I never ate there because my neighbors told me the food was bad and the service was worse. One day it closed down and no one shed a tear. It was replaced by an Indian restaurant. I was going to eat there until a neighbor told me not to bother. The restaurant was still run by the same people, they had just changed the name and the menu. A few months later the Indian restaurant was gone, replaced by a Middle Eastern restaurant. Again, same owners, same employees, different menu. The Middle Eastern restaurant finally shutdown and a new owner took over the space. A successful Thai restaurant now occupies the spot.
The restaurant’s problems can be traced back to the original owners. The “buzz” on the joint was that the food was bad, it never mattered what was on the menu. The owners obviously didn’t know how to run the business and the constant rebranding and menu changes didn’t fool anyone. But this is isn’t always the case. Businesses can successfully rebrand and shed bad images. It takes time and can be painful, and today’s media saturation makes it harder, but companies can rebound from disaster and forge new futures, but sometimes it means totally overhauling the business.
Last year the corporate world was shattered by more scandals. No scandal was bigger than the one that engulfed telecommunications firm WorldCom. Less than a year after the company’s massive accounting fraud came to light however, WorldCom no longer exists as we know it. Last week the company announced that it would be called MCI and the WorldCom brand was retired.
MCI is, of course, an old brand. The brand has existed since the mid-’60s and continued to exist after the company merged with WorldCom in the late ’90s. But the MCI brand was used solely for marketing products aimed at consumers, not businesses, which is WorldCom’s bread and butter. Nonetheless, the MCI name graces the arena in Washington, D.C. and serves as the title sponsor of a professional golf tournament, so it has been used for large-scale branding purposes. WorldCom’s rebranding makes total sense, but the choice of names may be a bad decision. WorldCom is a dead brand, that’s obvious. The MCI brand remained relatively untarnished during the scandal process because the problems at WorldCom were never directly traced backed to the MCI unit. But with the rebranding, the scandal now focuses on a company called “MCI, formerly known as WorldCom,” and the scandal isn’t over yet.
WorldCom should change its name, but not yet. The scandal is not over and the company will be in the spotlight for at least the rest of the year. Its business is not suffering because of its name and business is actually picking up thanks to the ludicrous intricacies of the bankruptcy process (don’t ask, but the best thing that ever happened to the company is bankruptcy). The MCI brand, while at one-time revered, has lost its luster and doesn’t even make sense anymore. What exactly does Microwave Communications Incorporated mean in this day and age?
Time will tell whether or not WorldCom’s branding will be successful, but there are two recent rebranding efforts worth looking at that helped forge new futures for tarnished companies. And least we forget, the brand itself is as important as any component of the company because the brand encompasses every aspect, good and bad, of the company and the brand is ultimately what you’re pitching.
Valujet Becomes AirTran
In May 1996 a Valujet aircraft crashed in the Everglades killing over 100 passengers and crew and creating the worst kind of public relations disaster imaginable. Valujet was already under scrutiny due to a number of questionable incidents involving its planes and the low-cost airline was generally perceived to be a cheap, but dangerous carrier. A year later, Valujet shed its name and became AirTran. Since then the company has regained its foothold as a low-cost carrier and memories of the crash have faded in the public marketplace. But Valujet’s rebranding was more than just a name change, it was an attitude adjustment.
The company fired numerous executives and rededicated itself to safety. As evidence, after the Sept. 11 terrorist attacks, AirTran was the first airline to complete installation of reinforced cockpit doors in all of its aircraft. The rededication to safety was necessary for the airline to stay in business and the firing of executives who allowed problems to persist was just basic business sense.
The new brand, AirTran, remains largely untarnished by its predecessors problems. By all accounts, the airline is successful and safe, and offers an alternative to major airlines. However, had the company simply changed its name, and done nothing else, it didn’t matter what you called the airline, it was still going to be the one that had a terrible plane crash that left dozens of families without sons, daughters, husbands, wives, brothers and sisters.
Voicestream Becomes T-Mobile
Wireless carrier Voicestream had a problem; the buzz on the company was that it’s low prices went hand-in-hand with bad reception, dropped calls and bad customer service. Voicestream’s ads were well-recognized thanks to pitchperson Jamie Lee Curtis, but the consumer buzz on the company was not good. After Deutsche Telekom bought Voicestream, a global rebranding strategy was incorporated at DT’s wireless carrier. Voicestream was lucky.
The carrier’s name was changed, with little fanfare, to T-Mobile and a new advertising campaign featuring Catherine Zeta Jones was launched. Although many people in the telecom community felt that Voicestream was just beginning to get the consumer recognition necessary to compete with the Sprint’s and Verizon’s of the world,
Voicestream retailers had a different story.
Voicestream’s rebranding has been successful thus far and the company’s ownership change allowed it to turn a corner. The T-Mobile brand, with a fresh Oscar winner hyping its product, has made most people forget that Voicestream ever existed.
This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.