My phone rings, and on the line is a Chief Marketing Officer (CMO) tasked with leading a corporate rebranding initiative. The CMO is asking the Million-Dollar Question: “How much is our rebranding project going to cost?” The question typically arises during the CMO’s due diligence process before cost estimates are due to an executive team. Having guided Fortune 500 clients through complex rebranding projects for almost a decade, I realize the importance of arming my clients with realistic numbers they can feel confident presenting to the C-Suite.
One of the critical success factors in a rebranding project is ensuring that executive decision makers’ expectations are accurately aligned with reality. Rebranding is a high stakes game, and going forward with inaccurate numbers is not a situation any CMO in a high performance environment wants to be in.
Usually the caller has begun the budgeting process by gathering information from various sources. They might have asked one of their agencies to quote industry benchmarks for a brand transition (% of sales, % of marketing spend). While this often provides them with potentially useful information for advertising spend, it is not a relevant benchmark for a branded asset transition budget. In other cases, they have been provided with estimates from stakeholders throughout the company as to what they think it will cost to rebrand departmental assets. They find this approach also to be lacking in that they have no means by which to evaluate the completeness or reasonableness of the information provided.
So what do I tell my concerned caller? I explain that the Million-Dollar Answer depends in part on what the company wants to achieve from their rebranding effort. In other words, the desired brand impact and other business drivers should guide our conversation and will lead to the coveted realistic cost estimate. For example, each category of branded asset has variables that can swing the rebranding cost significantly. What are the underlying assumptions for the expected outcomes? Are they reasonable? Do they take into account project drivers related to time, quality, interdependencies, or other commercial realities that could impact cost? Are there alternatives to the proposed brand transition approach, and what are the implications of pursuing them? What is the appropriate quality level for a particular asset category given its brand impact? Is the recommended approach operationally feasible? Could there be an internal sensitivity to capital expense versus operational expense? The questions that determine the outcome go on and on.
As you might imagine, the answers to these questions will vary by company.
The development of a realistic cost estimate can only be derived if it is developed in concert with a solid, well-considered brand implementation strategy. This process requires intelligent data that’s analyzed and compared to industry rebranding benchmarks. This information should be used to generate a number of brand transition scenarios for discussion among the key members of the rebranding project team. Once the preferred scenario is chosen, the savvy CMO will then be armed with the data they need to make fiscally responsible rebranding decisions and can then proceed to finalize a reliable cost estimate for presentation to the board.