Rebranding can be a business game changer, but it's not without its dangers. Recently, a marketing agency formerly known as Textivia found this out the hard way after spending $150,000 to rebrand as 3VE (derived from "Solve, Move, Evolve," three words ending in v-e) -- only to discover this was the code name for a giant internet fraud ring. The agency is seeking yet another new name.

This experience serves as a useful warning for any company looking to rebrand. High-growth companies are concerned about losing the ground they've covered with an existing brand -- but a failure to update can also result in seriously declining growth.

Of course, such an endeavor requires caution and extensive research. Most important, though, it has to be the right move at the right time.

Why rebrand?

There are solid reasons for rebranding -- beyond, say, experiencing a PR crisis. But it's not a simple matter: Branding is your company's interface with the world.

A brand is more than just a company's name; it's also about its identity, both internally with its team and externally with its customers. A good brand promotes trust and loyalty, and it should help communicate the company's mission. Sure, it includes the company name, logo and style, but it also encompasses the story you tell the public about your business.

A brand must encapsulate a company perfectly. As a business evolves, it sometimes needs a new way to express its identity beyond the stodgy confines of an outdated logo font or a misleading core service offering. That's when it may be time for a rebrand. This is not just a case of a startup making a pivot; giant legacy businesses also rebrand, as was the case recently for the brand formerly known as Dunkin' Donuts.

My business experienced a similar need. Although our overarching goal was to help businesses fuel growth, we found we were gaining more traction and delivering more value through public speaking opportunities. We rebranded to focus on these broader opportunities alongside our more intensive consulting services.

When you get the urge to rebrand, consider whether it's the right move right now. Here are a few questions to ask as you ponder the possibility.

1. Is your company more mature now?

Sometimes your original branding no longer represents the company's reality. Early logos or even the company name may seem somewhat primitive in comparison to how far you've come as an organization.

Consider the many iterations of Google's logo design, which gained simplicity and elegance as the company evolved in scope and maturity. The changing design reflects how the company is seen throughout the world. Nearly 70 years after Dunkin's founding, that company's rebrand may also reflect an evolving maturity. The move suggests the company is ready to offer more than deep-fried treats -- it now offers a beverage-led, comprehensive breakfast experience that meets customers' demands with ease.

2. Are your values and branding out of alignment?

Sit down with your leadership team to revisit your mission. Drill down to how your values guide the way you conduct business. Where is there a mismatch between what you say you care about and what the world sees?

"It only takes a single slip-up to lose your customers forever," warns Christine Alemany, CEO at TrailBlaze Growth Advisors, a branding and marketing firm that focuses on helping our clients efficiently deploy their marketing dollars. "A simple disconnect between your stated values and the way you do business can quickly diminish credibility." She argues that a rebrand should go deeper than aesthetics: Incorporating user-friendly technology into stores, for example, won't fix an employee engagement problem. Rather, you should pitch ideas for a rebrand to your strongest brand ambassadors to see what resonates.

3. Has the market changed?

Adaptation occasionally isn't due to an internal change in corporate mission, but driven by an evolving marketplace. Those drivers could be changes in costs, technology, sourcing, market share, or consumer tastes.

We're seeing this now with one of the world's most ubiquitous brands: McDonald's. The fast-food titan is seeking to regain market share as new values -- such as sustainability, health-conscious eating, and local sourcing -- are gaining in importance. To do this, McDonald's is modernizing its dining experience, offering tech innovations, adding healthier menu choices and making visual changes to show the market the company can withstand the test of modern-day conscious consumerism.

Rebranding can breathe new life into your company, but it has to be done thoughtfully. Be prepared to devote time and resources to choosing the branding path that's right for your company, aligning your current capabilities, your values, and the market reality. If all goes well, you won't have to confront an internet hacker ring at all.

Published on: Mar 13, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.