Ever since its inception in 1987, Telecom held steadfast to its generic brand name. However as the company has grown and diversified, the name Telecom has become less relevant to the organisation’s key purposes. Telecom is a 20th Century name that only describes the telecommunications industry- which is backwards from the company’s digital advances and desires to be viewed as progressive.
While the change has been viewed critically, it is vital for the company’s long term survival in the digital economy.
Why Telecom’s Brand Change Sparks Growth:
Telecom Needed to Rebrand
Because of hyper connectivity and the rapid development of ways people communicate, Spark needed to adapt to peoples changing needs. The company has shifted focus to mobile networks and many digital endeavors. As the world becomes more technology oriented, Telecom needed to rebrand to emphasise their adaption or otherwise be left behind.
Rebranding Could Shed Negative Perceptions
It is no secret that Telecom had come under public scrutiny over the past few years. After downsizing repeatedly, having broadband cut and being accused of being expensive and vague, many New Zealanders become disillusioned with Telecom. By repositioning the brand as “enabling our customers to thrive” users may be more optimistic about the brand.
Sales and Operating Profit Were Falling
Although Spark was attempting to cut costs quickly, sales were falling faster. Operating earnings were down by 5.8% and net earnings from ongoing business fell by 12.5%. Although rebranding is potentially a risky venture amidst financial uncertainty, It has been largely successful. Following rebranding, Spark’s annual profit almost doubled.
Good Brands are Undated by Time
If good brands are undated by time, then ancient “Telecom” was rapidly becoming a very ineffective brand name. Telecom, referring to the brands telecommunications foundation, stained the company as an outdated and old-fashioned.
As company CEO Simon Moutter claimed “it is time to hang up on Telecom and log in to Spark.”