Eir lift? How a new name can be the secret to success
Corporate rebrands can go very wrong (see ill-fated Royal Mail brand Consignia), or very right (just ask Google, formerly BackRub). But how will Eir fare, asks Sarah McCabe
Published 20/09/2015 | 02:30
For US technology venture Softcard, there was no choice but to change its name. The business, which linked credit cards to smartphones so users can pay for in-store purchases with a swipe, started life under a different moniker, one the world has become familiar with for all the wrong reasons - Isis.
Queue swift rebrand in 2014.
Companies rebrand for all sorts of reasons, most of them less dramatic than that example, all with wildly different results.
In January 2001, UK postal carrier Royal Mail announced a new name and brand - Consignia - designed to show that the business did more than just post. The exercise cost £1.5m (€2m). Just a year later, in the wake of 17,000 job cuts, record losses of £1.1bn and a signalled 1p rise in the price of stamps, the new name was abandoned in an attempt to boost morale.
It cost the company another £1m to change it back.
There are very successful examples too. Ever heard of a company called BackRub? Maybe not - but you will probably have heard of Google. The world's top search engine started life in 1996 under a moniker more suited to a massage oil. It rebranded two years later and went on to global domination.
Last month it unveiled Alphabet, the new title for its umbrella company; time will tell whether that decision gets an A or an F.
Often, rebranding is motivated by a company's desire to distance itself from a bad reputation. Arthur Andersen spent a decade after its role in the collapse of Enron doing business as WTAS, not reviving a version of the old name, AndersenTax, until last year.
Former Aer Lingus chief executive Christoph Mueller has just unveiled a new brand for embattled Malaysia Airlines, now called Malaysia Airlines Berhad.
Blackwater has tried to create distance from its controversial work in Iraq by adopting a new name, Xe, and tobacco giant Phillip Morris dubbed itself Altria in 2003.
One could assume that a desire to distance itself from its former troubles was the motivation behind's Eircom unveiling this week of a new brand, Eir. The company has had its fair share of setbacks.
Unwelcome price hikes, crticism of the sale of its valuable mobile phone business to Vodafone, insolvency, examinership and a failed IPO among them.
It makes sense that management of the company, who have made good progress in repairing the business since 2012, would want to step away from those associations.
The new brand it revealed last week is about the future, not the past, said chief executive Richard Moat in an exclusive interview with the Sunday Independent.
"It's about the future, not the past. We wanted to create something which was modern, forward-looking and which resonated with what we are transforming the company into.
"Eircom looked at rebranding shortly after I arrived three years ago - and decided that at that point it didn't make sense.
"We had lots of plans in place - the roll-out of fibre, our TV packages - but we hadn't actually done any of it. Since then, we have invested €1bn in rolling out services, brought high-speed fibre broadband to 1.3m homes. We have a much wider offering now and we have repaired our finances."
The company is worth "significantly" more than the €3.3bn offer its board rejected last year, Moat says, and is far removed from the business he joined in 2012.
He won't wager a valuation, however.
"There is a wide range of opinions out there and there is variety in the price our share price trades at - but even at their lowest, our shares are trading at a price that values the company above €3.3bn. We are pretty confident we can generate more value." Eircom's shares are privately held. They trade away from public markets so prices are not disclosed.
Ireland's biggest telecommunications business is still early into its 2015 fiscal year, having just unveiled results that revealed its first quarterly revenue growth in seven years. The company has guided investors towards low single-digit earnings growth for 2015.
Its priority for the next nine months is to maintain growth and continue to roll out high-speed fibre broadband, using both fibre to the cabinet and the more expensive fibre right into homes. "It is an industrialised process now, we are doing this very quickly and effectively. It is a massive undertaking but it is happening."
It will also continue to roll out of its 4G mobile broadband network, targeting 80pc coverage by the end of the year, and launch new TV packages.
Eir was the very first name proposed to the management team by its
branding people and management instantly liked it, Moat said. This was quickly followed by board approval.
The company's name is not the only thing changing, he added. "How we bring the brand to life is just as important as the name - everything from our adverts, which I think are very strong, to the colours we use."
The new logo is purple but the company says that up to 20 colours are included in its "brand palette".
That kind of marketing speak doesn't come cheap - the project is costing a total of €16m. It is the biggest Irish brand relaunch in two decades.
The roll-out includes new uniforms for 1,500 technicians, 1,500 rebranded vehicles, 106 revamped stores, 6,000 TV adverts, 4,500 radio adverts, and 2,100 outdoor posters.
The rebrand requires loss, too.
Despite the negatives associated with Eircom, it cannot be denied that its old brand had value.
The name Eircom dates back to 1999, launched as part of the privatisation of Telecom Eireann.
It lent its title to huge sponsorship deals and advertising campaigns, appeared on letters arriving at almost every home in the country; it was one Ireland's most recognisable brands.
Why throw that away?
"There are a lot of people for whom Eircom is still a very strong brand" says Moat. "There is always a risk inherent in rebranding but you hope to gain more than you lose.
"In choosing Eir, we are not moving too far away from Eircom, it is a happy medium."
Sunday Indo Business