Out of the Box

When is it Time to Change Your Name?

By Menachem Lubinsky on June 08 2007

Name Change? That’s what a large manufacturer of linens, pillows and quilts was contemplating. The reason was that ABC Pillow, the name his grandfather chose more than 60 years ago, no longer accurately represented what the company manufactures today. It has long since broadened its line to respond to a changed retail environment that now included such chains as Bed Bath and Beyond where bedding sets became increasingly popular. Retailers were looking for single source suppliers of branded products. The company manufactures complete sets of linens that also included quilts, sheets, pillows and other bedding accessories. Larry, the 28-year old grandson of the founder, considered the name change essential in today’s competitive environment.

Oscar, Larry’s father, who has been with the company for 43 years ever since he joined his father law at 24, disagrees. He claims that despite Larry’s argument, the company name is part of its identity and that any name change would lead to confusion in the marketplace, a chance that he was not willing to take. He was further opposed to Larry’s suggestion to search for a modern name that offered “more pizzazz”. Oscar felt that a complete new identity would be a terrible setback for the company to which Larry retorted that with the proper packaging and marketing, the name change could be turned into a huge advantage.

Another manufacturer and distributor of doors had the name Firedoor next to its name. This part of the name was appropriate when fire and safety laws were changing the requirement for construction and fire doors stood out. But the company had long since expanded to all kind of doors and hardware, which it felt necessitated replacing Firedoor with Door and Hardware.

Marketers tend to agree that the best names are those that quickly define what a company does. It saves the company time and effort to define itself. Nothing can be worse than having to say “Our name is X but we really manufacture Y” or a name that prompts the question “what do you do (sell, manufacture etc.)?”

Name changes of corporations and brands are not uncommon but they are usually associated with mergers and acquisitions or in the aftermath of a bankruptcy where a new name becomes necessary as part of the company’s efforts to limit liability on a previous corporate debt. Every one of us can probably come up with a few names that just passed into the night. Esso? New York Telephone? First National City Bank? Brooklyn Union Gas Company? These are just a few names some old timers may remember.

Larry was right in that many name changes actually represents an opportunity. It is a time to speak directly to customers, to define the company, and to showcase a new and modern look. Many corporations spend huge sums of money for strategic marketing plans to introduce a name change. They recognize that they have to get it right lest they contribute to confusion in the marketplace. Some companies actually explain a name change to herald in a new era of growth, particularly in the aftermath of a merger. Airlines are notorious for being in such situations, such as when Continental absorbed the defunct Eastern and American took on the old TWA customers.

Contemplating a name change has to be a step taken with the utmost caution. One misstep could cost the company market share and sales. One common misstep is not to connect the dots for the consumer. That is why you will notice the phrase next to a name change “formerly” The objective is to assure continuity and brand loyalty to the extent that they exist.

Name change can also become necessary if a company endures a cataclysmic event. There have been name changes after product quality failures. Airlines with a string of catastrophes have also resorted to name change in the 80’s. It is simply a situation where the company feels that it cannot hope to regain consumer confidence unless it somehow makes the customer forget the ill-fated name.

There are frequently what I call “painless name changes”. A firm that merges and adds a name is a good example of such a name change. In all likelihood, the name recognition does not suffer and if it is associated with a merger is actually a positive.

Some companies that should change their name because of an outdated image tend to avoid the step because of the expense involved. For a company that has to deal with products and its labels and boxes, this can be an expensive proposition. This is perhaps why it is not more common. For one New Jersey toy manufacturer, a name change cost well over $2 million, primarily because of the labeling changes as well as the significant amount of labels that had to be discarded.

A new modern trend in name changes is to either change to the initials (i.e. Washington Mutual Savings Bank is increasingly using MU) or to select an acronym that somehow includes some reference to the old name.

Back to Larry, who ultimately convinced dad to make the investment. A marketing consultant advised that the company prepare an integrated marketing campaign that actually traces the heritage of the company and illustrates just how it has grown. Larry’s father was finally convinced that he would not loose his existing customers and thus the move would only help attract new business. The proof came when after a slight drop in sales during the first quarter of the name change, sales increased by a whopping 30%, something that Oscar had not seen in years. Oscar joked: “Name changes work. Perhaps I should contemplate a name change to get younger!”

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.