In 2017, 48% of Americans had “hardly any confidence” in Wall Street, according to the Cato Institute, and changing their perceptions in an era when confidence in financial services is still at historically low levels is risky. In the past few months, many asset managers have nonetheless attempted to do so by rebranding, but should they? On the one hand, a firm’s rebrand could end up feeding customers’ skepticism. On the other, it could have zero impact—an equally disheartening outcome.
Let’s examine the question by considering what prompts a rebrand. There are three reasons:
- Sprucing up the existing brand: From time to time, asset managers such as AB, Eaton Vance, MFS, Oppenheimer, PGIM, Principal, State Street Global Advisors and TIAA like to polish up their brands through logo refreshes, large-scale repositioning, or a retelling of the brand’s story through new ads or marketing campaigns. These efforts actually might be taken in stride by customers who are already familiar with the brands because the new “brand story” aligns with their knowledge and experience of the firm. On the other hand, customers who are less familiar with the brands are more likely to notice any subpar execution of these campaigns, or view them cynically, in general. In either case, this could cost the company severely in terms of customer perception (and therefore revenue) in the long run.
- Responding to a significant event: Some firms have had to change their brand because they literally became a separate and different company. From an M&A standpoint, this includes mergers such as Columbia Threadneedle, Franklin Templeton and Janus-Henderson. It’s hard to argue with the rationale for a rebrand in these cases: The value proposition changed. However, rebranding as one of the first post-merger integration steps may not be as valuable or sticky as doing so two to three years later. Waiting gives time for the true brand (new processes and technology, employee attitudes and engagement, and products) to actually bloom from within. In these instances, a rebranding is almost a non-event.
- Reinventing a tarnished brand: This one is obvious and many examples come to mind, so let’s showcase an asset manager that did not rebrand to overcome serious breaches of client trust. In 2004, Putnam Investments paid $110 million to settle allegations of improper trading over market timing. Instead of superficially changing its logos or telling customers what it learned from the scandal, the company chose to quietly earn back customer trust by keeping many of the same senior leaders, salespeople and investment management teams in place to run the firm. That is a different, stronger and real rebranding.
Whatever the reason for the rebrand, at the end of the day, the success of it lies with customers. And for customers, the brand (or rebrand) comes alive in “brand moments” that truly matter to them. That is, during a conversation with a salesperson, an online query or a webinar, or in an email, the words in the rebranding press release must come alive. For this to happen, asset managers have to:
- Earn the commitment and conviction of all their employees. When employees truly believe in the changes themselves, rather than just going through the motions of brand training, they will own the execution of the brand. Employees are seldom surveyed or asked to participate in rebranding focus groups. In fact, employees learn about a rebrand with the rest of the world. A new, more inclusive approach could increase employee commitment.
- Build the key attributes of the new brand into the firm, then rebrand. When customers experience the new brand, it should just “click” into place. In other words, a rebrand should be one of the last steps in a strategic transformation, not the first, and authenticity is important.
- Persist with the rebrand over a long period. A front-page story, a three-month ad campaign, and a six-month email campaign may not cut it. The risk isn’t that customers will forget the new name, not recognize the new logo, or not associate the new tagline with the brand. The risk lies in new questions, points of confusion and seeds of doubt being sown in the minds of customers. That will cut into the ability to gather assets.
Unless there’s a real and unquestionable need to rebrand, don’t do it. And if a rebrand is warranted, commit the resources for it to succeed in the long term. Resist the temptation to tell customers your story. Instead depend on customers telling the story for you.