Using Research and Measurement for a Company Rebranding Effort

When a 123-year-old company with a national footprint but little brand recognition is about to be divested with an initial public offering on the New York Stock Exchange (NYSE), the time is right for a total overhaul of the brand. With a new corporate communications team, the support of a new CEO and a small budget, that is exactly what American Water did.

Situation Overview
American Water’s 7,000-plus employees deliver high-quality water and wastewater services to approximately 15 million people in 32 states and Canada. In 2006, despite its position as an industry leader and the country’s largest water and wastewater services provider, a formal research study found name recognition so low that only about half of its customers knew the name of their water company.
Because it was being spun off through an IPO, American Water needed to distinguish itself and build interest among potential shareholders. Equally as important, customer communications, media relations, government affairs, marketing and internal communications all needed to be reinvented. It was the only way American Water could improve its image across all key audiences, better educate customers, grow the business, begin to reintroduce and reposition itself and ultimately increase brand advocacy.

Back to the Well
Internal and external research clearly documented that the communications team needed to start over and completely overhaul the company brand. A fall 2006 baseline survey measured awareness among 1,612 customers (with a maximum margin of error of +/- 2.4%) and only 54% could correctly identify their water company, 93% had never visited the Web site and brand advocacy was at a low 34%.
Informal internal research revealed the need to put a face on the company, engage external and internal audiences, explain the complexities of the business, and explain the value we bring to the communities we serve.
Secondary research conducted by two New York City-based agencies revealed that this would be the biggest rebrand launch of its kind. There was no model from which to learn, no case study to follow.

Charting New Waters
“The research made it abundantly clear that we needed to build our own identity— one that represented our strength and history, but also innovation, personal service and environmental stewardship, and the value of the service we provide,” says Laura Monica, senior vice president of American Water’s corporate communications and external affairs and the pioneer of this project.
“The goal was to create an entirely new, engaging American Water brand and to reposition and relaunch American Water as the industry leader,” she continues. “The brand launch would have to occur on IPO day because of the specific requirements related to the quiet period restrictions.”
Guided by the research, the team established the following measurable objectives:
•    Increase percentage of customers who can correctly identify the name of their water company by 11%, and percentage who accurately know what entity owns their water company by 39%;

•    Increase brand advocacy among customers who consider American Water a “local” company by 15%;

•    Double the percentage of American Water customers who visit the company’s Web site;

•    Engage and re-energize employees on IPO day; and,

•    Stay within budget and aim for a 2-1 return on investment.

The target audiences for the campaign included American Water’s customers and the employees who serve them, as well as key regional, national and trade media. It also included potential American Water shareholders (who are also among the aforementioned audiences) and market analysts.

Swimming Upstream
The challenges for this campaign were numerous: A small staff, a limited budget, the size and number of projects (at times there were 1,000-plus line items being handled at once), a moving IPO date, no best practices to follow and a full plate of other day-to-day work. In addition, due to SEC-quiet period restrictions, employees could not be told of the plans in advance. Only a select number of managers were consulted to see what was needed and to ensure that the projects were successfully serving the business; they were warned repeatedly about the implications to the IPO if they didn’t keep it confidential. Outside of that select group and the small working group, all materials were kept confidential until after market closing the day before the IPO.

Taking the Plunge
The team approached each element—from the smallest (business card) to the largest (60-foot banner on the front of NYSE)—with solid strategy, carefully managing time and budgets. In just 18 months, a small group of talented professionals and dedicated vendors developed new logos and brochures for corporate and 20 subsidiaries, a 4,500-page Web site, trade show displays, customer communications, building signs, videos and vehicle and hardhat decals.
The team created two critical taglines: “We are American Water” and “We care about water. It’s what we do.” Customer communications put a face on the company, and spoke with a new, friendly voice about what American Water does and the value of the service it provides.
A photo strategy yielded 600-plus dynamic images of the company’s own pipes, plants, people and water, eliminating stock photos of rivers, waterfalls and unidentified tap water. The team also created an industry leading, robust Web site, and made bold, memorable visual statements through powerful type and a palette integrating sepia-tone and color images, earth tones and bright blue fields.
Recycled paper was used for printed materials to protect the environment and costs were kept down by developing templated, easy-to-update brochures and writing copy in-house.
Launch day rollouts and celebrations were planned for employees at more than 200 facilities nationwide; media and government relations strategies were developed to both support and capitalize on the launch.
On April 23, 2008, IPO day, American Water’s CEO, Don Correll, rang the opening bell on the floor of the New York Stock Exchange, officially relaunching the company. A new brand, new media and government affairs strategies and countless customer communications and marketing tactics were simultaneously unleashed, igniting celebrations from Wall Street to operations in Mauna Lani, Hawaii, and more than 200 American Water locations in between.
A 60-foot banner stretched across the front of the NYSE, all traders received the signature rubber duck and the CEO appeared on the longest live CNBC interview one NYSE VP remembered ever seeing. Nearly all employees saw a live stream of the CEO ringing the bell (which was met with cheers and applause in every location), watched an inspirational video featuring their leadership and peers, and were treated to celebrations and new posters of themselves and their coworkers displayed in their facilities.

Making a Splash
By December 2008, just eight months after the IPO, the results were astonishing. A market research study was conducted to assess the progress and effectiveness of the rebranding against the baseline metrics established by the 2006 research study. A total of 1,610 customers were surveyed, resulting in a margin of error of +/- 2.4%. The campaign achieved virtually all research targets, including the following:
•    The number of customers who could correctly identify the name of their water company increased 18.5%, and the percentage of customers who accurately knew what entity owned their water company increased by 61%.

•    Brand advocacy among customers who consider American Water to be a “local” company increased by 28%.

•    The percentage of American Water customers who visited the company’s Web site more than doubled with an increase of 114%.

•    The vast majority (87%) who visited the new Web site reported that they were satisfied with their visit; 66% reported “very/extremely satisfied.”

•    Forty percent (40%) reported that they read three or more inserts, a 21% increase from the baseline study in 2006.

•    When customers recalled positive news stories:
• Satisfaction with the quality of the company increased from 61% to 70%
• Our reputational rating of “perfect/higher than average” jumped from 48% to 67%
• Our approval rating increased from 52% to 57%

•    Fifteen (15%) noticed the new brand, and of these customers:
• 59% reported it to be “more appealing” than the former brand
• 9% reported it to be “less appealing”
• Nearly seven times more likely to find the new brand more appealing than less

•    Nearly one-third (29%) recalled receiving the annual Consumer Confidence report.

Additional results include the following:
•    Employees across the country cheered during the bell ringing on IPO day, embraced the new logo, and have provided unsolicited, positive feedback to the new brand.

•    A 4-1 return on investment was achieved according to an independent expert with over 30 years of marketing experience who did not know the amount the company spent at the time of his evaluation.

•    The company received more than $10 million in advertising equivalency value in 2008 for earned media and is now being looked at as a resource by major media outlets.

•    Top leadership was invited to advise mayors presenting to President Obama’s transition team on water infrastructure and to participate in congressional hearings on water.

•    The new brand has been honored with more than 50 national and international awards.

•    The average number of visits to the new Web site soared from 165 per day in 2006 to 6,313 per day since launch through June 2009—a 3,700% increase.

•    Institutional investors increased their number of shares held by more than four million since IPO, even amidst an unstable economic environment.

American Water’s rebranding effort was a success, and has proven to be priceless in helping to move the company forward in its next phase of development as the nation’s leader in water and wastewater services.

This article was written by MaryBeth Vrees, director of marketing and advertising for American Water. It is currently being featured in PR News Guide to Best Practices in Measurement, Volume 4. To order the guidebook or find out more information about it, go to