13 January 2010

By Ken Schmaltz, Marketing Director, Twist Marketing

“What’s in a name?” Juliet asked of why everyone was so hung up on the fact that she was a Capulet and Romeo was a Montague.

Similarly, many of our clients ask, “We’re thinking of changing our name. Should we? What should the new name be?”

The answer is both simple and complex. Should a company change its name? If it makes good business sense, yes. Simple, right? What should it be? Everything. That’s the complex part. Encapsulating your entire company in one or two words may be tough, but getting it right is crucial. Whether you’re naming a new company or changing your current name, it will be the first thing that comes to mind when a customer thinks of your company. It represents your entire brand: all of your products and services, your employees…everything.

First, let’s start with when to change your name. Often, a company will outgrow its name, either through product innovation or geographic expansion. For example, Computing Tabulating Recording Corporation adopted the name of its Canadian and South American subsidiaries, International Business Machines, to reflect its growth into a global powerhouse. After the Second World War, the company nicknamed itself IBM to accommodate its transition from punched-card tabulating machines to modern computers.

Then there are mergers and acquisitions. In the case of mergers, is it a merger of equals, or is one partner more equal than the other? Does one company have more brand equity than the other? Take Time Warner, which was formed by merger of Warner Communications and Time Inc in 1990. Both companies brought different businesses to the table (entertainment and media) along with considerable brand equity, so it made sense to preserve each brand in the name. Another approach would have been to brand the newly merged entities with a completely new name. This approach is particularly suited to the merger of two lesser companies that come together to form a much larger and stronger business.

In the case of an acquisition, ask yourself: is there enough brand equity in the acquired company’s name to keep it around? If so, does retaining the acquired name fit in with the overall corporate brand strategy? An example of an acquisition in which the answer to both of these questions was “yes” is Google’s purchase of YouTube. The name has great brand equity, and Google tends to allow acquired companies to operate independently, so keeping the name fit its brand strategy.

Or, maybe your company is just starting out. The name you pick will be one of the most important marketing decisions you make. In part 2 of this article, we’ll look at the four steps involved in selecting a company name—regardless of whether you’re established or a start up.

The Twist: A company’s name should encapsulate its entire brand. If your business has outgrown your name, change it. If you buy a company, consider how much of the purchase price was for its brand equity before you rename it. When you merge with another company, base the decision on the realities of the deal, not the internal politics.