A few dozen times a year we get requests from companies looking for a change. Sometimes it’s to update an identity, which can lead to the question: should we consider changing the name, too? Other times it’s as simple as “we want something fresh and new.” Our questions start with why. Why do you want to change the company name? You might be surprised at how often the answer is a blank stare. For anyone wondering, that’s a bad answer for something as significant as changing the foundation of the company.
In another post I’ll cover what we think makes a good name. But before we get to that part of the discussion it makes sense to pause and consider why change in the first place. Here are some quick guides to help with the consideration.
Why should a company consider a name change?
The current name is tied to a single product or technology and/or the company is limited by the association. This happens all the time with small companies that started off with a brilliant product or technology and now want or need to expand. Think outside your product at launch and you may be able to avoid this one further down the line. But if you’ve painted yourself into a corner, you may have to bite the bullet and change the name to something with legs.
The current name has very little awareness and equity, even after years of marketing efforts to improve the situation. If people can’t remember a bad or boring name after substantial marketing and PR efforts, then it may be time to start fresh. We find this to be especially true in competitive categories where the company name is based on a founder no one knows or cares about, or when the company name essentially describes the category. For example, I personally like the name Smith. It has a familiar ring to it. But naming a company Smith Solutions isn’t going to help many people understand what my company does or remember me at the end of the day. That’s partly because there are somewhere around 2.8 million people named Smith in the U.S. alone. But if you’ve launched your company already and are just now coming to this conclusion, it’s probably best you consider a name change. The good news is that when you rename the company, you likely won’t repeat the same mistakes.
The current name has been fundamentally and irreparably damaged by a scandal, tragic event or crisis. Although the events that blew up around Enron and Arthur Andersen happened after the Andersen Consulting group changed their name to Accenture, the choice was timely. Not long after the change, the Andersen name was forever tarnished by the Enron scandal, but Accenture stood mostly clear of the damage and years later few people connect the two companies.
Sometimes you want a little separation in your portfolio. Phillip Morris is a legacy company known mostly for its tobacco enterprises. For many people, especially those outside the fan base of tobacco products, the Phillip Morris name became synonymous with all that is wrong with corporate America. Oh, and at the time of the rebrand, they owned an 84% stake in Kraft, a decidedly non-tobacco company. Renaming the company to Altria gave the enterprise separation in the corporate conversation from just tobacco when they needed it, yet allowed them to stay connected to Phillip Morris when that worked to their advantage.
(In rare cases) the current name was launched but is now being forced to change due to trademark infringement issues. Every once in a great while we get calls from companies that launched under a name without doing due diligence with the trademark attorneys and now find themselves in the unenviable position of being forced to rename. We tend to have to work pretty quickly on these. In one case the FDA was coming after the company fast and hard, so keeping the old name was not an option. Generally, when the attorneys say it’s time to change the name, it’s time to change the name.
Why not make the change?
You’re just tired of the old name. Boredom is not a good business case for change. Ever. Take a nap, get a hug, go for a walk. You might just need some exercise or sunlight instead of a name change.
It’s expensive. Especially for large organizations, name changes are colossal undertakings. After the name comes a new identity. And while digital interfaces can be changed quickly and seamlessly, physical properties must be accounted for, from signage to fleets, to shipping containers and packaging, to uniforms, business cards and even lapel pens. It all has to change, all over the world. And that costs money and time. Lots of both. Make sure you have budgeted accordingly and understand the timing needed. Otherwise the change can do as much damage as whatever drove you there.
You haven’t fixed the flaws. If the company was fundamentally flawed before and those behaviors haven’t been corrected, people fired or jailed, or offending divisions sold off or closed, the new name will be tarnished even faster than the last one. While consumers generally want good things to happen to most companies, they desperately want to punish the bad ones. As the idiom goes, it’s like putting lipstick on a pig (no offense to pigs).
There isn’t clarity at the top of the organization. The CEO must be aligned to the change strategy, otherwise it’s a wasted effort. Speaking from the branding agency side of things, getting caught in the middle of a CEO and his/her senior leaders on whether the company’s name should change or not is not much fun.
You might not need wholesale change. What may be needed is a name evolution to update the company name in the marketplace. While this can be considered a name change, it’s not as disruptive to legacy users and supporters (think National Biscuit Company >> NABISCO; Government Employee Insurance Company >> GEICO; Federal Express >> FedEx; International House of Pancakes >> IHop). Yes, the change can still be expensive, but you won’t have to educate the world on what you’ve done and why. They’ll just kind of get it. A little strategic PR effort wouldn’t hurt, but you’re not changing from Andersen Consulting to Accenture.