How a brand change will impact revenue: Real-life figures

Seems every time you turn around you see a nonprofit organization that's "changing the brand." I've been a close observer of the process a lot of times. Too many times.

I say too many times because rebranding almost always has a negative impact on revenue. Response rates to fundraising campaigns drop. Acquisition suffers. Donor retention falls.

I can't claim to know why it goes this way, but I have a theory. I think the problem is two-fold:

1. There are basic flaws in the very structure of branding that hurt fundraising. It's a misapplied discipline from the commercial marketing world that simply doesn't work in our context.
2. Most of the time, the changes brought about by branding are bad changes that impede readability, emotional connection with donors, and clarity of offer. This is not intrinsic to branding. It just does most of the time.

So here, in my experience with re-branding, are revenue impacts you can likely expect if you rebrand. These are based on my first-hand observations, which have been frighteningly consistent over the years. Obviously any of these things could go very differently; your mileage may vary.

Change the logo

No impact. Each time I've seen a logo change, as long is it wasn't also a name and/or identification change, there was no change to revenue afterward. I think this is because very few nonprofit logos are that well-known or established in people's minds to begin with. I imagine if The Salvation Army changed its venerable logo, things might not go so well.

Change graphic standards

Small negative impact. I think the reason the impact is small is because graphic standards aren't that big a deal in the scheme of things. And the reason they're usually negative is because usually the changes are for the worse, I'm sorry to say. They tend to bring in hard-to-read fonts, chilly colors, and other weird things that just degrade the communication abilities of the organization. I think if there was a change in graphic standards toward readability, clarity, and emotion, you'd see a small positive impact.

Change organization's name

25% to 50% loss of revenue. Yes, you read that right. Changing your name can really wallop your fundraising. I've seen it happen every single time. Even when the old name was weird and the new name made sense. A workaround that may save your bacon: Use both names together for period.

Change cause identification

20% to 30% loss of revenue. Rebranding very often consists of making what the organization does less focussed. An organization that used to proclaim it fed the hungry now provides "hope." (Hope is a very popular concept among branding people.) An organization that used to focus on a single disease or problem now peddles "health." This change will hurt nearly as much as a name change.

Now you may have noticed that the best outcome here is revenue-neutral, and it goes downhill from there. Given that the whole point of rebranding is to improve revenue (at least it should be), I have to conclude one thing: The branding discipline doesn't work for nonprofits. At least the way it is commonly practiced.

Do you have experience that contradicts mine? I'd love to hear about it!

Comments

[Marcus Blease]

Hi Jeff,

We recently changed our organisations name from The Spastic Centre to Cerebral Palsy Alliance. To date all has gone very well, and revenues are not affected in any way across any channel.

Our first big test occured recently with our Autumn appeal which is tracking 34% up yr on yr currently.

We do have the 'formerly The Spastic Centre' underneath and have transitioned our logo over a two year period, so it almost looks identical to our previous logo and general branding.

I am also aware of other charities here in Australia who have re-branded over the years and managed to hold revenues firm, so not everyone does experience those drops you refer to. Done badly, I'd suggest that can certainly happen though.

I'd definitely suggest not to rebrand if it can be avoided, but there are certain times when re-branding becomes a necessity, such as ours and it's actually met very positively from the donors, clients and public.

[Eva Brune]

Hi Jeff,
We (Los Angeles Universal Preschool) too have rebranded over the past 2 years. It was actually a necessary and a positive change. We went from meaningless visuals embedded in our campaigns to focussing on images of the children we serve. Yes, we even focus-grouped to understand that folks were simply not understanding what the previous imagery had to do with our cause and we heard loud and clear that folks want to see kids, kids, kids. By cautiously rebranding and by upping the overall quality of the visual language we use, we have grown our impact exponentially. Corporations are perking up to what we do and are now supporting us because we look serious and focused on our mission. I think the distinction is between trying to rebrand a very deeply rooted organization versus rebranding or 'improving' the brand image of a smaller non-profit. For smaller or newer firms, I would have to say a branding update can make the difference between connecting with the audience or fading into the background.