5 Reasons to Change Your Company Name—and 5 Reasons Not To
At LPK, we get a lot of requests from companies looking for a change. Often, it starts with a desire for a new identity, which can lead to the question: should we consider changing the name, too? It’s a good question, and one that can’t be answered without serious consideration. So, before you take such a significant action as renaming your business, consider these five reasons to make the change—and five reasons not to.
CONSIDER A CHANGE IF …
- The current name is tied to a single product or technology, and 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 down the road. 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. 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.
- You want a little separation in your portfolio. Philip Morris is a legacy company known mostly for its tobacco enterprises. For many people, especially those outside the fan base of tobacco products, the Philip 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 from tobacco in the corporate conversation when they needed it, yet allowed them to stay connected to Philip Morris when that worked to their advantage.
- You’re being forced to, 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 have now found themselves in the unenviable position of being forced to rename. We tend to have to work pretty quickly on these. Generally, when the attorneys say it’s time to change the name, it’s time to change the name.
AVOID THE URGE IF …
- You’re just tired of the old name. Boredom is not a good business case for change. Ever.
- You don’t have the funds. Name changes are colossal undertakings, especially for large organizations. After the name comes a new identity. And while digital interfaces can be changed quickly and seamlessly, physical properties must be accounted for—signage, fleets, shipping containers, packaging, uniforms, business cards, even lapel pins. 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.
- 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 or not a company’s name should change is not much fun.
- You don’t 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.
So, as you can see, a rebrand doesn’t always call for a rename. But if the timing seems right for your company, be sure to watch for my next post, where I’ll do a deep dive into the naming process.
This article is an edited version of the original LinkedIn post: Is It Time to Rename Your Company? Careful What You Wish For.
LPK Vice President, Managing Creative Director Kelly Smith works across LPK’s portfolio, transforming organizations and building B2B and B2C brands—from small family-owned businesses to Fortune 50 companies. When Kelly’s not immersed in organizational change issues, you’ll find him buried in a business book, playing his guitar or chasing a triathlon personal record.