How important is the name of your business? The very first
impression of your business will be derived from its name. The name is the quintessential
element in your identity and image. If your business' name is cumbersome, self-serving,
too lengthy, or confusing, you cannot achieve recall in your audience. Without recall, you
will have no business. Need I say more?
Starting in 1960, the New York Stock Exchange began keeping records of corporate name
changes. Through the 1990s, it recorded well over 1,100 name changes among its common
stock listings. (And THAT was pre-Internet days.) Clearly, naming a company is a strategic
process requiring careful consideration. You should select a name that will continue to
serve your business well as it changes through the years.
Here are 10 lessons other companies have learned the hard way:
1. Keep it brief.
According to my research, almost two-thirds of corporate name changes through history have
involved shortening the name; for example, dropping descriptors like
"manufacturing." This is not surprising, since many companies start by choosing
a descriptive name, which in the short term saves communications dollars, but then proves
too wordy as companies diversify and become established. A short name may have less
communication content, but it has more communication impact since it will be easier to say
and easier to remember. Besides, consumers tend to shorten long company names anyway, so
why not provide the shorter version in the first place?
2. Avoid description; especially product description.
Many people want to say what it is so that people hearing it will know what the company
does. But, the chief purpose of a name is to designate, not describe. Including your
company's product in its name can constrain your company's image as it grows. Just ask
Bausch and Lomb Optical who undertook a massively expensive name change to Bausch and
Lomb, or U.S. Steel Corporation who became USX. Now, of course, there are exceptions: If
you operate a coffee bar, for example, and never plan to diversify into other realms, then
a descriptive but clever name like "Rhythm & Brews" or "Grounds for
Thought" would score high in my book.
3. Drop geographic location.
You will find a geographic name very limiting when you grow beyond your original location.
That's why Eckerd Drugs of Florida became Eckerd Corp., and why Pittsburgh Plate &
Glass became PPG Industries. Thanks to the Internet, the use of geographics descriptors in
corporate names has decreased drastically as companies think globally as early as
start-up.
4. Be distinctive.
Fortunately, as high-tech companies have multiplied, their knack for forming names from
parts of other words they stuck together, has almost faded away. Now, I have to wonder if
the earlier companies who jumped on the fad wish they had given more thought to a name
before they identified themselves as Comtech, Infotech, Newtech, Teletech, Teleco, Comtel
and Computel. Compare these computer-oriented names with the distinctive Gateway Inc.
Which are you more familiar with? Need I say more?
5. Drop general references.
Overly general monikers like American, General, United, National, Federal, and U.S. are
too commonplace and add no distinction or value to your name.
When I was writing "Outsmarting Goliath: How to Achieve Equal Footing with Companies
that are Bigger, Richer, Older and Better Known," (www.OutsmartingGoliath.com), I researched the
Seattle phone book for general references. I chose Seattle since it was geographically
distant to Washington D.C. where general references abound. In Seattle alone, there were
more than 110 General, 150 National, and 250 American entries in the yellow pages.
6. D.U.A.A.P. (Don't use abbreviations and acronyms, please.)
They are currently a naming fad; thus, all the more reason to avoid them. Not only will
these businesses lose customers in a few years as they go through an expensive name
change, they're losing them now because even reasonably intelligent people have a hard
time finding abbreviated companies in yellow pages. (Quick: Is J.C. Penney listed under
J.C.? or Penney? Who will take the time to find out if they can call Sears or BonTon
instead?)
7. Think internationally.
Unless you provide a service that will never go across borders (you run a styling salon or
an auto repair shop), think internationally right from the start. It used to be that when
someone started a new business, people would laugh at the entrepreneur's affirmation that
she would be doing business internationally. Now, with the ease of doing business around
the world, an entrepreneur should be laughed at for not thinking globally right from the
start. But test your name for global appeal. Chevrolet wished they had before introducing
their Nova car in Mexico. In Spanish, Nova means "doesn't go."
8. Know when (and when not) to use your own name.
If you're well known in your field already and are going to open your own consulting firm,
you may want to bank on the reputation you've already established by using your own name.
If, however, you're opening a new business to sell products or provide a service in which
you haven't yet established an expertise, then, in general, using your name is not a good
idea.
9. Avoid "& Associates" and articles.
The "& Associates" distinction doesn't fool anyone these days. Most
prospective clients know that the company can be as small as one person, and that the
"& Associates" could mean "& No Employees." If that's
acceptable in your profession, then you might be ok. Likewise, if you have a small firm
made up of consultants or part-time associates, and your clients are comfortable with
that, then the name might work for you. Drop the use of articles like "the."
Customers will drop them anyway so you may as well do it for them.
10. Incorporate your company.
An "Inc." distinction makes your company look bigger and more official.
Likewise, an LLC distinction makes your company look more official, although not
necessarily bigger.
Bonus: Best names I've ever heard? Humana (very warm and suggestive of humanity over its
original name of Extendicare); Gymboree (there's no doubt this has something to do with
kids, yet it's not limited to any one aspect of childhood); and Blockbuster Video (sure it
has the descriptor "video" but the term blockbuster could apply to the videos OR
the stores themselves).
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