Aviva rolls the dice in a high-risk name game

After a £10m marketing campaign, Norwich Union becomes Aviva on Monday. But is this sort of rebranding ever worth the cost or the risk of a backlash from customers? Nick Clark reports

Bruce Willis and Ringo Star changed their names to get ahead. In a series of adverts, the two celebrities suggest that Norwich Union will be just as successful in shelving the 200-year-old brand and relaunching as Aviva on Monday.

Comparing film stars and music legends with an insurance company has raised a few eyebrows but shows Aviva's determination to spare no expense in pushing its new identity.

The group is understood to have spent £10m on media and production for the name change alone as it looks to avoid some of the mistakes that have dogged companies from the Post Office to PricewaterhouseCoopers. Some industry estimates put the cost of whole rebranding exercise at £80m.

Norwich Union was founded in 1797. Today Aviva is the fifth largest insurer in the world, with 60 per cent of its revenues coming from overseas. From Monday, it is bringing the UK into line. Aviva's chief executive Andrew Moss called it a "key moment" for the company. Graham Hales, managing director at Interbrand, said: "This is a logical move for Aviva, as Norwich Union means nothing abroad. In many ways it feels like the right thing to do, but the benefit feels somewhat absent."

Amanda Mackenzie, group marketing director of Aviva, spearheaded the overhaul. She said: "The most important thing is making sure everyone understands why we're doing this. We can use it as a catalyst for change and to show how we want to differentiate ourselves from our rivals." Hamish Pringle, director general of the advertising body IPA, said: "Companies have to work hard to get customers to engage with a new brand name, especially with a made-up one. Aviva, similar to Accenture, has no intrinsic meaning. They have to imbue an abstract concept with some meaning. What does it stand for?"

The path to rebranding is riddled with pitfalls. Richard Huntington, director of strategy at Saatchi & Saatchi, said: "Mess around with the affection customers have for your brand at your peril. You spend a lot of time making something feel meaningful, then you trash all of that goodwill. There has to be something better at the end of it." Others warned against strategies that are rushed or carried out in a superficial manner. One expert said the risk for companies was "throwing the baby out with the bathwater. It happened when MG was changed to British Leyland: the heritage of the brand suffered."

Ms Mackenzie said there had been a few angry letters, but three-quarters of customers said they did not care. "We explained why we did it and took people with us. It's not like Consignia, when no one could understand why they were changing the Post Office's name," Ms Mackenzie said.

Consignia was constantly cited as a branding disaster. "It felt unnatural and misconstrued," Mr Hales of Interbrand said. The accountancy group PricewaterhouseCoopers was forced to shelve the rebranding of its consultancy arm to "Monday," which had cost about $110m (£68m) and soon collapsed.

Rebranding is a process that can be both hugely expensive and time-consuming. The minutiae of rebranding includes changing tens of thousands of legal and policy documents, as well as business cards, vehicles, branches and anything else that carries the company logo. Rune Gustafson, an independent branding consultant, said: "It is a really difficult process to get right. It is not just a name and logo change. If that's all a company does, they are wasting a lot of money. The new brand has to be better than the old one."

Aviva hopes that bringing its operations under one brand will bring cost efficiencies, in terms of communications within the group, for example. It said the adverts were cheap in a cheap market and "will be used in multiple markets around the world". Most experts pick HSBC's rebranding of Midlands as the "big daddy" of successful rebranding drives. Others cite BT Cellnet changing to O2 as a good example of a brand built from scratch. Guy Murphy, worldwide planning director for marketing firm JWT, said: "The main reasons to rebrand tend to be global realignment or mergers and acquisitions. It is a long-term continuous process, not just a change of name, and has to be done right."

An example of this is the Spanish bank Santander, which announced this week it would be renaming the branches of the British groups it bought, comprising Abbey, Bradford & Bingley and Alliance & Leicester.

Some companies rebrand to try to revitalise their flagging operations; for example Chelsea Girl's relaunch as River Island in 1989 "gave the company a real shot of adrenaline," according to one expert. Others want to throw off a possibly negative perception among consumers. Ratner Group changed to Signet in 1992 after the owner admitted his jewellery stores sold tat, while the cigarette maker Philip Morris rebranded to Altria.

"If a company has decided on rebranding, they have to do it with ruthlessness, confidence and conviction," said Mr Huntingdon.

One expert backed companies who have not rebranded. "Carphone Warehouse does not sell carphones and isn't done out of a warehouse, but the name has its own meaning. They don't need to. There really has to be a pressing need to rebrand."

Falling flat: The rebrandings that went wrong

*British Airways' attempt to expand its reach by dropping the Union Jack from its tail fin was met with outrage in Britain. The £60m strategy, which used multicoloured designs described as "awful" by Margaret Thatcher never really got off the ground and was reversed in 2001.

*PricewaterhouseCoopers became the butt of jokes after attempting to rebrand its consulting arm as "Monday". Despite costing $110m, the new name was dead within a month and the division was instead sold off.

*The Department of Trade and Industry was forced into a U-turn after a brief period as the Department for Productivity, Energy and Industry. It retrenched following jibes from the business community, but has since become the department for Business, Enterprise and Regulatory Reform.

*The Post Office rebranded as Consignia in 2001 to attract corporate clients. The move proved disastrous and was ditched the following year.

*Drinks giant Coca-Cola unveiled New Coke in 1985, but the new recipe and brand design was met with a collective raspberry from the drink's loyal fans.