So, Twitter is now… X. It’s a huge rebrand for tech entrepreneur Elon Musk. And it raises some interesting questions. When and why would you change a multibillion-dollar company’s brand, especially a well-known one? And Twitter isn’t just any company: It’s so much a part of our society that it has become a verb. Celebrities, politicians, athletes, regular people, everyone—including me—tweeted their thoughts and opinions on just about everything.
When Elon Musk purchased the company last year, he set to changing just about everything. He laid off thousands of employees, around 80% of the company, eliminated the blue checkmark, tried to push users into new paid packages, and began tweaking just about everything else. In July, he rebranded the company from Twitter to X.
The familiar bird logo is on the way out, and although users still post at Twitter.com, it’s unclear what we call these posts. Are they Xs? Are they still tweets? The rebrand of the service is a huge change for the company, and the brand’s pervasiveness—its verbness—is on the line as a result. This leaves many wondering: Is this rebrand a mistake? Or a necessity?
When Should Companies Rebrand?
A rebrand of this scale, replacing a globally recognized brand that has become part of the language with something new, is no small undertaking. There are times when a rebrand is called for, and times when it isn’t. I dealt with this firsthand on multiple occasions over the years when I was running TDAmeritrade. The techniques used apply just as much now to a company like Twitter as they did then for tech and finance giants, and they can help executives decide whether a major rebrand—like turning Twitter into X—is called for.
In 2001, Ameritrade’s market cap was sinking. The company wasn’t doing well in a lot of ways, but one thing it did have going for it was that people knew what it was. The company had done a good job of advertising and poured a lot of money into building the brand. Major investments had also been made in technology, even though it still struggled with day-traders. How big of a change in direction was called for? Was it wise to keep the Ameritrade brand, or go for a total turnaround with a rebrand?
To figure all this out, we went through a process of defining our core competencies and figuring out how we could leverage those in a way that allowed us to participate in market niches where we could be a leader. The answer wound up being transaction processing; we concluded that we weren’t really a financial services company. We were a tech company in the financial services industry. So we cut non-core areas of the business and reinvested the money into our core competencies. But we were still executing trades and processing transactions, which was exactly what the Ameritrade brand was known for. So the answer was not to change a well known brand.
Sometimes, though, a brand is either damaged or worth less than it could be, and then it may be worth it to make a change. In March 2003, Ameritrade acquired National Discount Broker from Deutsche Bank. We also acquired DayTech, which was Ameritrade’s biggest competitor and was doing incredibly well at the time. In both cases, however, we eliminated their brands, rather than replacing or incorporating them into the Ameritrade brand.
A few years later in 2006, we acquired the U.S. brokerage operations of TD Waterhouse and made a very different decision. In that case, although Ameritrade was a well-known brand for stock traders, TD Bank Group had a stellar reputation as a home for people’s financial lives. By adding the TD and becoming TDAmeritrade, we were able to keep the brand recognition of Ameritrade while boosting its value through the addition of the TD.
This made a lot of sense; they were expanding their banking brand in the U.S., and Ameritrade wanted to bring financial literacy to every family in the country. TD Group was a 150 year old, highly reputable bank. When they wanted to put their name in front of ours, it helped enhance their brand in the U.S. and helped us communicate to the marketplace that we were more than just a place to buy and sell stock. Changing the brand helped us do that.
When Schwab and TDAmeritrade merged in 2020, everything was brought under the Charles Schwab brand. As good as the TDAmeritrade brand recognition was, it didn’t come close to Schwab, which had roughly twice as many clients and a market cap that was a third bigger. When we did the deal, it was with the intention that the name would be Charles Schwab. The stronger brand won out, just as it had when with the National Discount Broker and DayTech deals.
The Brand Is the Mission
Ultimately, a brand represents the company’s persona and its mission. The more significant the branding change, the more significant the change in mission. If you’re taking charge of a company that hasn’t been doing well or has poor brand recognition, or if companies are merging, it may make sense to change the brand and the logo. Otherwise, the brand that has had the greatest positive, long-term recognition and impact should prevail.
By changing Twitter to X, Musk is saying that it’s not the old Twitter anymore. We just don’t really know what that new thing is yet. All we know is that X means something fundamentally different to him than what Twitter did. And what remains to be seen is what X will mean to the rest of us.
Share your thoughts about the value of a brand with me on the service formerly known as Twitter @CoaghJoeMoglia.