Rebranding in the digital age
A new bank's approach to rebranding, when faced with an issue regarding its chosen name, provides a lesson to any organisation faced with a similar challenge
When a business is forced to rebrand and change its name, it can present a number of significant challenges to transition without losing or confusing customers. One recent example of a rebrand, by the challenger bank Monzo, adopted an alternative approach that demonstrated the value of customer engagement in choosing a new name to maintain brand presence. This article looks at the lessons that can be learned from it and highlights the pitfalls to avoid in carrying out a rebrand.
Monzo is one of a new breed of “challenger banks” that has emerged in recent years. This was principally as a result of the Bank of England relaxing its rules on the requirements to set up a new bank to encourage competition in the banking sector following the 2008 banking crisis. New challenger banks were able to set up and operate without the substantial costs that the traditional banks required to spend.
Nearly all of the challenger banks operate exclusively online. This is born out of the ability to build a digital bank from the bottom up. They are not reliant on legacy systems and their IT infrastructure can be customised to facilitate their online presence.
One of these banks, Monzo, recently faced a traditional trade mark dispute and chose to address it in a modern way.
Rules of the rebrand
The details of the dispute between Monzo and the third party that made the allegations have not been made public. Nevertheless, it seems reasonable to assume that Monzo took the view that its previous name Mondo was not sustainable and that it was better to rebrand than become involved in a protracted and potentially costly litigation.
It was however the manner in which Monzo rebranded its company that was notable and perhaps provides a framework for other businesses faced with similar problems. Instead of exclusively engaging a marketing company to carry out a rebrand, Monzo ran a poll (online, of course) and asked its customers to provide suggestions as to what its new name should be. They set three criteria for the poll:
1 The name had to start with the letter M. This was so Monzo could retain its logo, based on that letter.
2 The name had to represent Monzo’s business and work across different languages and cultures.
3 The name could not be Banky McBankface.
The first two criteria were to maintain Monzo’s corporate ethos and minimise the disruption caused by the rebrand.
The third criterion was to avoid the poll becoming a farce. Monzo clearly sought to avoid the unwanted public attention that was generated by a similar online poll to rename the NERC polar research ship. The name Boaty McBoatface was proposed by a BBC radio presenter and it became the runaway winner in the poll, following numerous online campaigns.
The organisers of the event, however, refused to recognise the result and instead NERC renamed the ship RRS David Attenborough. The media attention that the vote generated, and the outcome of the vote, somewhat drained the organisers’ good intentions. It left them in the unenviable position of looking like spoilsports for refusing to rename the boat in line with the result, even where to do so would have been a farce.
By contrast, the Monzo approach to its rebrand generated a significant amount of goodwill among its customer base by engaging them in the rebranding process. The six individuals who suggested Monzo as the rebranded name were the first to receive the company’s new bank cards and they also received a hoody with the new name and logo on it. Monzo has now completed the rebrand and has relaunched itself online.
A blueprint for success?
There are a number of lessons that can be learned from this approach that other companies contemplating a rebrand by engaging with their customers should bear in mind.
First, harnessing the power of your customers can be used in such a way as to ensure that they feel engaged with the rebrand. Seeking suggestions from customers (within reason) can create and maintain brand loyalty in difficult circumstances. It ensures that customers understand a change is being made, and that they will not be confused by this when the new brand is launched. This is particularly important for young and startup businesses that may not have an established market presence.
Secondly, use the rebranding campaign to generate positive publicity and avoid the pranksters. This is crucial when the rebrand is forced following a legal dispute. Set the criteria for your customers to suggest names in a manner that avoids any attempts to derail the process.
Build in a right of veto, to provide a lawyer or trade mark agent with an opportunity to determine whether the name is available for use. This includes checking whether a suitable domain name can be purchased and an appropriate trade mark can be registered before announcing the new name. It also ensures that no third parties can purchase or register these names first and potentially hold the business to ransom.
Thirdly, check whether any rights require to be assigned from the customers. This is likely to be the case particularly if a customer is asked to design a logo as part of the rebrand. Copyright in that logo will belong to the creator (i.e. the customer), and an appropriate agreement should be entered into, to ensure that their rights are assigned to the company that wishes to use them.
Finally, engaging with customers in an ongoing manner by answering questions on online message boards could further facilitate the rebrand, and explain why it is required and what the new name will be.
In addition to this approach, it should not be forgotten that more traditional clearance checks can (and should) be run before launching a brand or trading name to reduce the risk of any disputes arising in the first place.
Clearance checks search against earlier registered trade marks in the jurisdiction in which a party wishes to operate. These can be carried out by trade mark agents or specialist searching companies. They can identify any identical or similar trade marks that offer identical or similar goods or services. Clearance checks can identify whether a trade mark application is likely to be opposed, and can help to form a strategy to address any concerns that may be raised.
Googling the name and the field in which you propose to operate can be a further helpful check to run. This can identify any unregistered rights that are not picked up in clearance checks. It also has the added advantage of being free and only costs you the time spent reviewing the results.
It is also advisable to check whether there are any companies registered using the proposed name, and whether any of the main top level domain names (those using .com or .co.uk) have already been registered.
Each of these options should be carried out to build up a picture as to whether there are any third parties already operating with an identical or similar name.
Trade mark infringement
If a business fails to carry out these checks, it could infringe or pass off the rights of a third party trade mark owner. In such circumstances, the owner could seek an interim interdict/injunction to prevent the continued use of the trade mark, pending the outcome of a full substantive hearing. This could have a significant impact on a business if it is forced immediately to cease trading using its main trade mark(s), and effectively to rebrand at short notice if it wishes to continue trading.
Furthermore, if a party is ultimately found liable for trade mark infringement and/or passing off, it could be ordered to pay damages or an account of profits and costs, and/or to deliver up or destroy any materials bearing the infringing trade mark. All of this will inevitably be costly and time consuming, in addition to the loss of reputation and damage to brand value that could be suffered.
In the digital age, it is now easier than ever to communicate with customers, and this can provide significant benefits to promote a business’s goods or services.
The power of positive engagement can also be harnessed to turn difficult decisions, such as a rebrand, into a positive story and one that generates good publicity. It should not be forgotten that this requires to be carefully managed to obtain the full benefit of the rebranding exercise, and to avoid it being hijacked by unwanted media attention.
As ever, the decision to engage customers should be balanced with a series of more traditional clearance checks to avoid infringing the rights of third parties. The combination of these should help to ensure a smooth transition and navigate the rocky road of rebranding.
Mark Cruickshank, legal counsel, RBS Legal, Intellectual Property