The Ugly Duckling Story

Courtesy of Amazon

Everyone has probably read the childhood book, The Ugly Duckling, and remembers the transformation of the maligned duckling into a beautiful swan.

 

This post is a true story about the transformation of a company through a name change and rebranding over the 10 year period I served as the Creative Director.

 

Ugly Duckling Company History

The company, Ugly Duckling Car Sales, first got it’s name early on as a rental car company in the Tucson and Phoenix areas. The name was originally Ugly Duckling Rental Cars and reflected a second rate level of affordable rental cars, as well as the original owner’s last name, Duck. Over time and several owners, the company’s present owner’s shifted its focus to selling used cars to the subprime customer, and eventually went public trading on NASDAQ under UGLY in 1996.

By the time I arrived five years later in 2001 Ugly Duckling Car Sales had been built into a powerful brand generating an estimated $540 million in sales revenue with 80 plus dealerships across the country. While I say powerful brand you need to understand the difference between a negative vs positive brand. Ugly Duckling had a huge presence in many markets, and was definitely well known, but not in a positive way.

A Negative External Brand

Yes, Ugly Duckling had transformed the Buy-Here-Pay-Here (BHPH) concept from the one-off local Mom and Pop stores in seedier parts of town to a more respectable BHPH company. But, their reputation as offering unfairly high-interest rates for low quality vehicles was a tough image to overcome. And, with a name like Ugly Duckling it didn’t help customers feel any better about their bad credit situation leaving them little choice, if any, when it came to buying a used car.

Customers resented the way the used car salesmen treated them; often as second class citizens,  berating them throughout the entire sales process (this is no exaggeration). While Ugly Duckling management didn’t condone this behavior by their employees, customers were quick to spread the word about the type of experience at Ugly Duckling, including the high interest rates and vehicles that broke down. All you need to do is Google Ugly Duckling and you’ll see how truly difficult the task would be to rebrand the company in the near future.

The Duck

Yet, A Positive Internal Brand

In contrast, Ugly Duckling employees loved the animated carton Duck that served as the mascot. All advertising portrayed the “duck” who was a very happy Disney-like caricature. Employees rallied around this “Duck” giving little thought to the external negative reputation the company had with its customers. The internal brand’s positive reputation with employees would also be a huge barrier to overcome with the eventual rebranding.

Ugly Duckling – The Name Change

Within the first year of my arrival at the company the owner had purchased back 85% of the shares turning what was a public company back into a private entity. And that marked the beginning of the transformation of the brand. By 2002, Ugly Duckling had been renamed DriveTime and the rebranding efforts began.

It’s critical for you to understand that powerful brands, positive or negative, do not change their spots overnight, and in this case, feathers. The actual brand transformation of Ugly Duckling to DriveTime (the swan), internally and externally, would take almost three years to find the true brand. Most of those years were spent evolving the internal brand from the top down. Many of the original customer facing Ugly Duckling employees were not able to make the philosophical changes or possessed the skills required to change their behavior thus positively affecting customer experiences.

Car Salesmen – Are they the most hated occupation?

I almost hate to say it, but the following real-life story will help you better understand the huge task at hand to rebrand this company. Ask anyone, and I mean anyone, what are the most despised occupations or transactions you, as a consumer, dread dealing with. Who are those individuals who make your skin crawl just having to do business with them. I venture to bet the Car Salesman is at the top of the heap. Consider DriveTime’s business model, add “used” car salesmen and the disgust rises even higher. Oh, but I can top that…”subprime” used car salesmen! Do you see what a gigantic barrier this is for the internal branding efforts?

DriveTime would have to start internally with the employee brand to affectively change this perception in order to alter the customer experience. This included recruiting and hiring for a different skill set. Instead of hiring those with car sales experience, the real transformation began when DriveTime began seeking out college educated candidates, especially loved those with previous retail experience…not car salesmen. The change in hiring mimicked the Enterprise Rental Car protocol of hiring only recent college grads for all entry level positions. Enterprise’s entire management development comes from within their own forces.

ReBranding with The Go-to Guys for Cars and Credit Campaign

In addition to hiring a different talent level, DriveTime’s brand really hit a home-run with the Go-to Guys for Cars and Credit campaign co-developed with their new agency, Fogarty, Klein and Monroe (FKM) who was hired as the agency on record in 2005. This campaign truly met the needs of the employees (internal branding) and gave them a company brand they could feel proud of. To be thought of as a “Go-to Guys” felt positive and promising to both employees and customers alike. Both employees and customers connected emotionally with this campaign which is the most impactful way to be a difference maker in highly competitive consumer based industries, like the automotive industry.

View an example of a :30 TV spot from this campaign via the video below or click here if unable to view on your mobile device..

The Swan

The idea of striving to be the company customers came to as their first choice vs their only choice had a huge impact externally in the messaging communicated through the next five years national campaigns, merchandising and culture. If you ask me, the Go-to Guys campaign truly “rebranded” the company and greatly contributed to the 300% increase in revenue from 2002-2010. By the time I left DriveTime in early 2011 company revenues were well over $1.6 Billion completing the transformation fom The Ugly Duckling to beautiful Swan.

So, you can see renaming or rebranding a company isn’t something that happens overnight, and doesn’t cure all that ails. Its can be a very long process to find the sweet spot that emotionally connects customers and employees to a company’s product or service. Establishing a brand and name that does just that is critical to the long term success of any business.

In conclusion, the following five points should be consider for all businesses who want to get it right the first time:

  1. Don’t rush the naming process. Names shouldn’t limit future growth or be difficult to pronounce or spell. Hire a professional.
  2. Know who you are as a company…not just what you offer, but what does it really mean to your customer. Branding is developed from this perspective. Run your thoughts by someone outside your industry to get a clean, unbiased perspective. Again, hire a professional.
  3. Have a marketing, advertising budget that includes branding. So you CAN hire a professional.
  4. Be patient…don’t rush the branding process or have unrealistic expectations. It takes time to develop a brand. And, don’t forget to hire a professional!
  5. Remember, brands evolve or time…don’t get stuck in outdated thinking. Social Media is here to stay, and the next bright shiny marketing platform is just around the corner. Did I mention you should hire a professional?

I hope my point has been well made regarding hiring a professional and the reasons why it behooves your company to do so. Companies come to me often who have been in business with solid sales for years, but they can’t seem to get over the hump. It’s hard to build long term success and ensure increases in revenue or market share without the foundation of strategic branding. It’s never too late to turn your Ugly Duckling into a Swan!

 

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