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Sunday, August 1, 2010

Rebranding BP. Why?

Dealers apparently are taking to the idea of rebranding as a solution to stem the growing resentment customers feel towards parent company BP. Basically, it’s a matter of sorry about the Gulf, but we’ve got a business to run. Since the spill, the average dealer’s sales are down 500 gallons a day due to recent protests, which translates to about $40K a month based on the current national average of $2.73 a gallon.

There’s also been suggestions for BP to just lower its gas prices to keep existing customers while attracting others, but really, how much would they need to lower them? Just dropping it .02¢ seems like a waste. I can get a few pennies off myself just by going up the street. If I’m driving around looking to save, it better be in the dime range or better.

Factor in 11 dead oil rig workers and a brand trying to lure customers back, what’s that worth? .50¢ off a gallon? A dollar?

Still, tempting as it is to hate BP, it’s not the dealer’s fault. Even though gas yields the highest output from a barrel of oil, dealers don’t make a lot per gallon, somewhere in the 3-5% range. If a price cut were to occur, no dealer would be able to support it without significant financial support from the home office.

So is rebranding the answer?

Here’s why it isn’t. A new logo is as much a long-term fix as it is a short-term one—and that’s with your garden variety brand where maybe you want to freshen up a stale brand. Hello Burberry, Hello UPS.

But then you take a step down when you apply the practice to brands who don’t know who they are as a company, or who may have customer service issues. Hello AOL, hello Comcast.

You can also rebrand after a major tragedy. Hello ValuJet, hello AirTran.

However, you really crash and burn if you try it after doing something so heinous as to make an entire country hate you. Hello cover-up, hello BP.

Then there’s the practical aspects of a rebrand. This assumes you could get designs created, approved and implemented in the field quickly enough to affect that change in perception you so desperately need. Conservatively, we’re talking two months minimum—and that’s starting today.* That’s trucks, pumps, cups, signs and whatever else. Then there’s the inevitable ad campaign required to help launch it all.

Meanwhile, everyone knows you’re rebranding, so forget about making a splash as this *new* gas on the scene. No matter what look you come up with, people will still remember what you did to those poor turtles. Compared to the live feed of an underwater gusher, a TV spot with a shiny happy family pulling into a new BP XYZ station might not play so well.

If you thought the Chevy Tahoe parodies made GM cringe? This is nothing. Assuming you did rebrand though, where do you draw the line with it?

Is it just for BP stations? What about their other brands Amoco, Arco and Thrifty? I’m sure the station owners would love any name besides BP right now, but I wonder how many people protesting them are filling up at Amoco without knowing who really owns the company. The dealers wanting to go back to the Amoco name are being short-sighted because people will find out eventually. Oops, too late.

As for the long-term, the only advantage to rebranding that I can see is that customers in a few years may not be aware of what went on now. If you look at Exxon after the Valdez spill, it took them about 15 years to exit the retail business—and that’s without changing their look or name. During that time, they sold off many of their stores to Valero, but continued to operate under their Exxon-Mobil name.

Even after they got out of retail completely in 2005, they still leased the Mobil name. Why rebrand when you can wait out the protests? In BP’s case, nobody is talking about selling off their retail business—yet. I mentioned AirTran, but there at least, the new owners were committed to improving the safety violations that plagued ValuJet.

With BP’s long history of spills and violations though, this is either the final straw, or more likely just one more incident they’ll have no trouble ignoring the outcry over.

And if they have no problem doing that, why would they ever see the need to rebrand?


*I don’t know many printers that would turn down the amount of work that this would require if BP dangled enough cash. You can bet the P.O. from the agency would simply say ‘Whatever it costs.’


Susan said...

I found your post very interesting. It will be quite an undertaking to change our perception of the BP company. Perhaps instead of rebranding, they need to do something finally to show they care about what they did. Those awful commercials aren't helping at all.

Susan @ Branding YOU Better

kathy garolsky said...

I found your post very interesting.Hoping to see more of your great post.Thanks for this.