In Pipeline 37, we carried the first part of a long interview with Wally Olins, widely acknowledged as one of the world’s most experienced practitioners of corporate identity and branding. In this, the concluding section, he tells Pipeline about costs of re-branding, usually exaggerated by the media, working with clients, the different types of company names and the use of branding and future trends.

Was one reason that name changes attracted so much criticism that the associated costs were, allegedly, so high? The name change for Monday, for example, was reported at £75 million. Surely, all the re-painting and physical work would have to take place over a period in any case? What are the costs of re-branding excluding the hardware changes?

“I’ve spent a lot of time working with and advising major strategy consultants and I can tell you the figures that the strategy consultants charge are infinitely greater than those charged by the most expensive branding consultants. These figures of £70-80 million are plucked from the air and bear no relation to any kind of reality at all.

“There are various phases which incur costs. The first requires investigation, research, consultancy and creative work. Let’s say that costs between £1-4 million. Then there is the continuation of this phase and the planning of a development programme which can be phased in to what the organisation is doing. That is usually done by people inside the organisation and therefore incurs no ‘additional’ costs.

“The third phase is implementation. A complete name change, like exchanging Q8 for Gulf, which has to be changed overnight, across Europe, can be very costly. If, however, it’s a modulation, it can be done over a period of time. Probably, over a period of four or five years, it will cost very little, if anything, because it will be phased in with the usual refurbishment programme.”

TYPES OF COMPANY NAMES

In one of his books, The Corporate Personality, Wally Olins listed six different types of names. The first was that of an individual, usually the founder of the company, and examples include Ford, Philips, Lucas, Marks & Spencer and Krupps.

The second category includes names that usually describe the company’s activities and they also often have some geographical qualifications. He cited Yorkshire Imperial Metals, Occidental Oil, English China Clays and General Motors. Olins says that most companies, when thinking of a name change, examine descriptive names very carefully as this is the most obvious field in which to search. “When, for example, the sickly Hudson and Nash car companies amalgamated… they became American Motors.” AMC, of course, has long since disappeared.

The third category comprises abbreviated names like Pan Am and Conoco. “There is quite a lot to be said for abbreviated names. They are short, easy to use and can be invested with some kind of relevance but they are not as restrictive as fully descriptive names.”

Initial names need much heavier promotion to counter the anonymity which they create. They must be used so regularly that they become more familiar than the full name. “KLM is an example: few people inside The Netherlands, and practically nobody outside the country says Koninklijke Luchvaart Maatschappij in the course of conversation.”

The penultimate grouping consists of names like Vyella, Kodak or Shell and the sixth seeks to draw an analogy between the company and a specific object or quality. Olins cites The Sunlight Laundry and The Crow Carrying Company as examples.

THE USE OF BRANDS

Brands may be well-known but that does not automatically imply that the group will use them on all occasions. Why not?

Wally Olins pointed out that there are several different types of brand. The first, such as Unilever, operate on the basis that they will present themselves corporately to every audience except the final consumer. The final consumer will only see their individual brands. This is mainly for historical reasons but such large groups often have their own competing brands, seeking different market sectors, sitting close together on supermarket shelves. These groups don’t want customers to feel that these products are the same.

Another type of group endorses brands with its own name but may emphasise the product brand, content to let the corporate brand take second place. The company endorses and presents the brand to all its audiences including the final customer.

For some companies, such as Virgin, the brand and corporation are the same. Companies in other categories that encounter difficulties with a specific product, for example, may be able to avoid problems at the corporate level but customers are becoming more perceptive. Virgin and Coca Cola, for example, lack variety but can create enormous impact.

GLOBALISATION

Pipeline speculated that the increasing tendency towards globalisation might push customers in the direction of a global, uniform brand.
“Many people think that globalisation means that a group, such as HSBC, will have one name and one brand, across the world. But we must remember that the customer decides brands and they must take into account local differences in culture and other factors.

“Also, of course, many large organisations, such as Diageo, have many different brands that compete with each other around the world. A very long while ago, Ford used to offer one model of car in one colour. Now, they offer Lincoln, Mazda, Jaguar, Volvo, Land Rover and Aston Martin. The vehicles may be linked in some ways, in terms of components, for example, but the products are aimed at different audiences.

“Possible global homogenisation, an easy concept to grasp but profoundly unattractive, is modulated by the fact that individuals do not like to be inclusive. We like to be exclusive, so, although homogenisation is taking place, it is also true that heterogeneity is occurring at about the same speed. Wherever you go, you will see more and more brands competing in the same market place so although there are dominant global brands, it is also true that heterogeneity of brands is equally powerful.

“We’re entering a society in which individual characteristics are becoming more important. We don’t like being classified as part of a group which has a certain income and a typical way of life. There is now much more individuality within some socio-economic groups and the development of heterogeneity in branding reflects that development which is a relatively recent phenomenon.”

WORKING WITH CLIENTS

“No company, as far as I can recall, has ever said ‘we want to change our name’. Any company that intends to change its name moves very reluctantly, slowly and carefully. As a consultant, you have to think extremely carefully what your advice should be.” Clearly, many different types of specialist come together when a group intends to change its name and brand. What role is played by the brand expert?

“When I deal with people, I can only speak for myself, they pay me to tell them what I think. They don’t pay me as an outsider, to reiterate their own opinions, just to make them more palatable. If the role is to facilitate and to undertake an audit of all the activities in which the new company is engaged, then so be it but, ultimately, you have to tell people what you think. Other consultants may act as a mouthpiece but I won’t.”

One problem, presumably, is when you become involved with a company, you encounter internal politics embraced by the conservative and progressive factions?

“This nearly always happens. When you’re dealing with a large group at a high level, you will always be confronted by huge political issues, with people who are trying to preserve the status quo and with people who have previously been independent and who are now part of the totality. They’re desperately anxious to retain their existing name, structure, status and everything else. You have to deal with all that in the best way that you can. If you think that it’s right, let’s say, to leave the existing structure for five years and change it over a period, then you can and should say so.

“I usually detail three or four options. Then I give the advantages and disadvantages of each, and say that, in my judgement, a specific option has the fewest disadvantages and the most advantages so this is the one that I think you should proceed with but it’s your choice. I can recall many cases like that and they can be difficult but, after you’ve been working with people for some time, they appreciate that you’re completely independent and that you’re nobody’s poodle. They may not like it but they respect you.

“Sometimes, of course, you may have to tell people something that they don’t want to hear but I don’t find that particularly difficult. What is frustrating is when people conjure up excuses to avoid implementing your advice whilst simultaneously refusing to accept that you have valid reasons for what you recommended. But, of course, I’m not saying that they have to agree with me.”

Pipeline wanted to know about the relationship between the branding consultants and, for example, the advertising agency.
“The client will undoubtedly have a variety of consultants and communications advisors, including their own public relations people and possibly internal branding specialists, as well as the outside branding company. One of these groups will be dominant and factors determining that include the power of advocacy, who has the ear of the chairman and who is most involved, financially. For example, an advertising agency that senses that it could lose total control will not readily acquiesce in an erosion of its position. They will fight very hard to retain their hegemony but they will not be totally successful because they usually only understand, and are only paid to understand, consumer advertising, not all the other aspects. The consequence may be a battle.

“In a good organisation, when everything is working well, all parties collaborate through an agreed programme. In reality, egos are fragile and huge. Disputes are rarely at the top level, between the chairmen of the client company and the agency, but at a much lower level.

“When you’re working for a very large organisation the lines of demarcation between different groups becomes eroded and may break down. Quite possibly, you may make an observation to the client that seems to fall outside your remit but what matters is that you recognise your limitations and understand how your contribution fits.

“Who’s in charge? The conventional wisdom is that brands are managed by faceless individuals, backed by enormous sums of money, able to manipulate millions of people all over the world by using tactics of subversion which makes it almost impossible to avoid their blandishments. That’s what they would like to believe, too, but it’s just not true. Brands are not controlled by companies but by customers. If they don’t like the product, they will walk away because they can buy alternative products. It’s a dangerous illusion to imagine that companies control their audiences and market places, and, if any company begins to believe that it does, it will be in great trouble because it’s always at the mercy of the consumer.”

THE FUTURE

Wally Olins maintains that, although branding is derived from commerce, it has much wider applications, for example, in charities, sport and education. Harvard and Oxford enjoy their reputations because of what they have achieved over the years and in a way, they are now self-fulfilling providing that they sustain their standards.

“Branding exists, at least in part, because of the art of seduction. The desire to seduce is very influential in all our relationships and the most popular UK brand, according to people abroad, is Manchester United.

“It’s meaningless to label brands as either good or bad. It’s a technique used to differentiate and I expect the concept to be extended to include not just cities in the future but entire countries. There are now three times as many nations as there were in 1948 and they compete for investment, tourism and in the export markets. Scotland, Slovenia and Slovakia have similar population numbers but almost anyone in the world will know more about Scotland because of whisky, tartan kilts and other phenomena which are not necessarily confined to Scotland but which present an idea of Scotland. A national brand is how people inside that country feel about themselves and how they are perceived from the outside. Nations have particular characteristics but they are often perceived as they were 50 years ago. England may be seen as old-fashioned, traditional and conservative but the reality is that it is a multicultural and open society, at once creative and innovative.”

Olins explores the concept of national brands in a book due out later this year. Clearly, for him, the future’s bright!