The Name Game
“The Name Game”
A misnomer means a lost opportunity; compelling IDs can open doors.
When it comes to branding and corporate identity, your company’s name is your most valuable asset. It’s your flag, the one clear, consistent face that you present to the outside world. And it jumpstarts the positioning process: Every time someone hears that name or sees it on a business card or ad, it tells what your business is about and what makes it different — or, at least, it ought to.
The trouble is that in the mad rush to get to market, entrepreneurs usually don’t spend enough time devising a compelling name, which means missed opportunities.
Make It Memorable and Meaningful
Powerful company names have two things going for them: They’re easy to remember, and they’re easy to comprehend.
Memorability. Some names are notable because they are easy to recall. Suppose you’re in a restaurant and want to order a beer. You ask for a Bud without even glancing at a menu. Or perhaps you want to order vitamins online, so you type in Mother Nature.com on your browser’s address field. You didn’t have to think twice.
Another aspect of memorability is recognition. Some names don’t immediately spring to mind, but when we see or hear them, they click. Say that you’re thumbing through the Yellow Pages looking for a moving company. You may not have thought of Mayflower, but when you see its name, you recognize it.
If you seek recognition, you can select something more distinctive. But if you want a company name that’s easy to recall, keep it simple. One caveat: Avoid initials. One study revealed that words — whether real or made up — were 40% easier to remember than all-initial names. (And, no, those famous corporate initials that leap to mind — IBM, GE, TWA, UPS — don’t qualify as exceptions. Remember: They all started out as highly descriptive phrases — International Business Machines, Trans World Airlines, United Parcel Service — that evolved into household initials with time and heavy marketing.)
Not sure whether recall or recognition would serve you best? Consider the purchasing process.
Meaning. Think about what you want the name to signal. Caution: Owners often presume customers know more about the business than they actually do, which results in clever names that aren’t always crystal clear. For example, Calyx & Corolla may not scream "florist" — unless you’re a botanical buff who knows that the words are part of a flower.
Make sure that customers "get it." This isn’t like naming a rock band; you don’t want an obscure reference that requires considerable involvement with your company before customers understand the relevance of your name.
Some names are easy to build relevance around. Take Agilent Technologies, Hewlett-Packard’s diversified technology company launched last summer. HP engineered the spin-off’s name from "agile" (nimble, well coordinated, mentally quick) to reflect its mission: delivering cutting-edge products and services with speed.
Look at the Big Picture
Your business strategy will also have an impact on company nomenclature.
Consider your competition. What other names are already in the marketplace? Are you trying to steal market share or stimulate primary demand?
If you’re trying to enter a category that’s already crowded, you may want a name that’s similar to competitors — this may cause customers to fall your way by mistake. But if you’re creating a new category, it might be wiser to go with a more distinctive identity to separate your business from followers.
Consider your future. Selecting a name can be easier for an entrepreneur, who typically operates a single line of business. But it’s still important to think about longevity and select an identity that can grow with you.
Here’s one that might run into problems: Tricon Global Restaurants (a former PepsiCo. subsidiary) is the holding company for Pizza Hut, KFC and Taco Bell. But if Tricon wanted to spin off Taco Bell, then its name is no longer accurate. Of course, "tri" might also refer to three values the company considers important. Be careful about words and long-term business goals.
Geographic names are often limiting. Founded in 1863, the Harlem Savings Bank ran into identity problems when "Harlem" developed negative connotations as a destination spot, and the bank expanded to other New York boroughs. In 1983, the bank changed its name to the Apple Bank for Savings. Today Apple has more than 40 branches and ranks No. 5 among savings banks in New York state.
Don’t be afraid of coming up with something bigger than you are now. Names can be aspirational and help promote your vision.
Auditory impact. A name is heard before it’s seen in type, and some words simply sound better or are easier to say. What’s more, research has shown that sound imprints are more indelible than visual imprints.
Avoid fads. What sounds trendy today may become quickly antiquated. Example: Many companies have integrated "Web or net" into their nomenclature, something that experts say will sound dated as Internet commerce becomes commonplace.
Use your name with care. Adopting the founder’s name is usually not the best way to go. There’s something old-fashioned about eponyms, which can be detrimental if you’re trying to appear cutting edge. In addition, it can put undue pressure on the principal. If anything goes wrong, customers want to talk to the founder, which makes it difficult to leverage other personalities in the firm.
Yet there are exceptions to this rule. Some service sectors, such as architecture, accounting and law, have a historic precedent for eponyms. In fact, it’s such the norm that going against the grain might be a mistake.
So if it’s important that your business be perceived as a traditional player, naming the company after yourself might make sense.
Switching Signals: When And How to Make a Change
Of course, nothing says you’re tied to a particular name for life.
Companies change their names for a variety of reasons, including:
- A merger where management wants to take advantage of the brand equity at both companies.
- Recovery from a negative experience. ValuJet became AirTran Airlines after a crash in 1996 that killed 110 people.
- A change of focus. Perhaps you started manufacturing air conditioners, and now you’re selling software. The old name is limiting or incorrect in some way.
Federal Express changed its name to the snappier FedEx in 1994 — officially embracing what consumers had been calling them for years. Besides sounding more modern, the new nomenclature resolved other potential problems: "Federal" suggested government ties that didn’t exist. And by suggesting geographic limits, it also might have been baggage as the company extended its global presence.
Assess name changes carefully; altering your identity takes time and money.
How hard it is depends on who you are and how long you’ve held your current name. Younger companies have an advantage because there is less brand equity and "unlearning" to do. But if you’re AT&T, it’s a different story.
Whether or not you hire a consultant to help with the naming process, you can’t avoid some expenses, such as changing all business documents (lease agreements, insurance policies, contracts) to acknowledge the new name. There are external communications to prospects, customers and suppliers. Then there’s stationery, invoices, business cards — indeed, the paper chase can turn into quite a marathon.
Though it’s impossible to pinpoint expenditures, one expert offers a very basic rule of thumb: Plan on spending 1% of your annual revenues on the new identity.
Besides the time invested in an old alias, company structure also affects any switch. An Internet company with no physical facilities is going to have an easier time, whereas traditional brick-and-mortar companies face signage, equipment, trucks, warehouses and uniforms that must be altered.
A name change can be implemented gradually — as you run out of business cards, they’re replaced with new ones — or it can be revolutionary. Of course, costs will hit you harder when a change is executed in one fell swoop.
Tip: Every company has some external touchstone that customers understand most: Perhaps it’s the way you answer the phone or the uniforms that employees wear, such as UPS. If you choose to implement a name change in stages, make sure that area is covered first.
Costs aside, there can be considerable benefits in a name change, beginning with its newsworthiness. Americans are very curious about what’s new, and a name change gives you an opportunity to be in the limelight. It gives you a reason to contact the media or customers and explain the change: "Our new name is not just a word, but a symbol of how this organization has progressed."
Invest in communications. Be sure to announce the name change to employees and customers before making it public. Have one-on-one conversations with your best customers, and carefully orchestrate internal communications.
Get Employees on Board First
A name change can be quite disruptive for employees, who often have more attachment to their corporate name than do founders or investors. For your staff to be passionate and articulate advocates of the new name, they must understand the identity shift. Be sure to sell them first.
Don’t just send out an e-mail or put a note on the bulletin board. Tell employees face to face. Host a town meeting to explain the switch. Employees hear plenty about the "what" and the "when" but rarely get enough of "why." Why are we merging? Why are we spinning off? That’s what they want to hear.
Handled correctly, a name change can be very positive. It brings excitement. And, for a company that’s taking a new direction, a new name becomes a memory aid. Often a company’s transformation occurs gradually; a name change gives employees a way to link the change. It makes things tangible that were intangible.
Just ask Mary Alice Lawless. Lawless launched Impact Communications in 1983. But in the early ’90s, the Morristown, N.J.-based firm began to shift gears: What was once a traditional marketing and communications company began to create and manage online sales/marketing resource centers.
The metamorphosis was tough for veteran employees. Last year Lawless decided to change the name to ClickUpdate. "It was magic," says Lawless. "Not only have customers related to us in a whole new way, but the name change helped with our internal organization."
Writer: TJ Becker