What makes a company walk away from an established brand name? Companies put years of time, money and the effort of employees into building a brand. Is there a shelf-life on even the most notable of names?
I saw this article on CNNMoney.com about the recent name change of GMAC Financial Services to Ally Financial, Inc. In the case of GMAC, the desire to abandon its established brand may be the result of poor public opinion in the wake of the company receiving three government bailouts. Changing the company’s name helps GMAC distance itself from the raw nerve that is easily struck when Troubled Asset Relief Program (TARP) funds are discussed.
In the CNNMoney report, reporter Annalyn Censky sought out the opinion of branding expert Jack Trout. In his trademark to-the-point fashion, Trout gave this assessment of GMAC’s decision:
“GMAC was always confusing. It was a good name if you’re leasing GM cars, but once you get beyond the automobile world, it’s not good,” Trout said. “If you can take advantage of what the word ‘ally’ means, you can use that word to certainly help drive a new idea in.”
In his recent book Repositioning: Marketing in an Era of Competition, Change and Crisis, Trout defines repositioning as the adjustment of perceptions, whether they are about your company or your competition. In fact, one of the strategies Trout lists as a route to successful repositioning is “Change the name.” While I can’t say for certain if the folks at GMAC read Trout’s book, it’s obvious that his strategies have real-world support behind them.