Dropping strong brand name could be a Cingular mistake

AT&T’s decision to drop the Cingular name and re-brand the wireless division as AT&T Wireless is a dicey proposition considering how much equity the hot company with the orange jack logo has built. That said, though, AT&T is probably making the right move in the long run.Cingular_1

We often work with clients who have multiple brand names serving clients in different segments or sectors of the marketplace. Oftentimes, the end result is confusion on the part of customers and the Street and, sometimes, internecine squabbling between the entities. Ideally, an organization should have a unique and overarching positioning that is based on today’s reality but allows room for aspirational growth. We worked with a German multinational, for example, that had purchased multiple, old-line U.S. companies. Besides the obvious internal frictions, the German corporation faced the daunting task of renaming the individual U.S. companies without losing the brand equity and comfort levels each had built over decades of serving the same customer base.

Our recommendation was to accomplish the re-branding over a lengthy transition, enabling the individual units to gradually wean their customers away from the "old" brand and towards the "new" one, all the time emphasizing the many positive benefits of the latter. And, that last element is the key missing link in AT&T’s situation. While I understand their goal of creating one brand, I don’t see what the customer benefit will be. Why should I give up my trusted relationship with Cingular Wireless to embrace one with a brand name that is, to put it mildly, damaged goods?

As they think through the re-branding process, AT&T marketing gurus should come up with a compelling brand promise for the new AT&T Wireless. If it’s nothing more than, "Hey, only the name has changed," then I’m afraid they might see their old customers dialing up a different service provider.

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