What's In A Name?

Names are currently a big topic in the business pages, highlighted by the amount of press space and negative criticism given to the recent rebranding of The Post Office Group to Consignia and PwC Consulting to Monday. My own company did not develop either name, but as creators of Egg and Nectar, we feel well qualified to comment on the furore surrounding names and to give our views on the value of rebranding, the risks and benefits, and some tips on how to ensure the successful adoption of a new name.

Names play a central role in our understanding of each other and of the world. Brand names matter because they help cut through complexity, setting up preconceptions of what we can expect from a business or offer, and helping to make sense of the myriad choices that surround us. Naming is thus a potent marketing tool for positioning (or repositioning) your brand: it sets up expectations, which must be reflected in what the brand delivers.

Brands are often the most valuable equities that a company owns, frequently accounted for on the balance sheet to enhance corporate wealth. For example, the Marlboro brand is estimated at £27bn. A strong brand name is the one element you hope never to change, since it is ultimately how consumers identify a particular brand promise. However, as corporate brands and their business strategies evolve, the suitability of an established brand name to signal these longer term ambitions may be called into question. But serious consideration must be paid at the outset of any rebranding programme as to whether a new name is really required, and to ensure that it will enhance the overall corporate brand without alienating existing consumers and stakeholders.

Positive factors
There are a number of good reasons for developing a new name. The most compelling are:

A new stand-alone offer when a new stand-alone product or company is created, which will not rely on an existing mother brand to define its offer. For example, when CardioTech Ltd, the UK vascular graft manufacturer, bought itself out from its US parent of the same name, it changed its name to Credent. The new name reflects the serious nature of its business, suggesting a company with principles, whose products have credibility with patients and surgeons alike. The name also provides the brand with space to expand its offer from a specific product supplier to a wider specialist medical service organisation.

An organisational step change when a company expands into new market sectors or geographical territories, it may require a name which represents much more than just one part of its product portfolio. For example, Diageo was created to encompass a diverse portfolio including the Guinness, United Distillers, Burger King and Haagan-Dazs brands; One2One, the UK mobile network, was recently relaunched under the T-Mobile brand as part Deutsche Telekom’s efforts to market its mobile operations under one name, thereby increasing its international profile.

Likewise, as the marketplace evolves, some established brands may struggle to remain fresh and relevant to their target audiences. A brand name change can signal a new approach. For example, the high street fashion brand Chelsea Girl successfully rebranded itself as River Island as part of a modernisation programme in the late 1980s.

A new type of offer when an established brand launches a new type of offer which reflects a very different brand personality, attitude and core values from those of the parent. For example, when Prudential looked to launch an internet bank, it recognised the need for a distinctive, consumer friendly name that would signal a new breed of bank to all potential customers. Egg had qualities of preciousness and accessibility, as well as being so different from other bank names that it begged attention. Its success heralded a new era in financial brand naming with the launch of other evocative brand names such as Smile, Goldfish and Cahoots.

Corporate mergers (or demergers) when an organisation has been formed out of a merger of two or more companies and there are powerful market-focused reasons to show how different the new organisation is from both its parents. For example, when the two Irish dairy companies Avonmore and Waterford merged to form Europe’s fourth largest dairy business, a name was required that would be applicable internationally, but that would have domestic resonance. Glanbia was the result – easy to pronounce in all key market languages, but abstract in meaning in all but the domestic market – in Irish Gaelic glan means pure, bia means food.

Likewise, demergers signal the need for a new name to establish autonomy from the parent company and create an independent identity for the new corporate offer. Both Accenture (formerly the consulting arm of Arthur Andersen) and Monday are good examples of this rationale.

To create publicity As the furore surrounding Consignia and Monday has shown, everyone has an opinion on names. Names polarise audiences into strong advocates and derisive opponents.

The desire to create press noise may well be part of a company’s launch or relaunch strategy and, if managed well, can provide valuable advertising. At their launch, revolutionary names such as Egg and Orange brought both derision and praise, but both have now been accepted. However, those responsible for a new ‘revolutionary’ brand name must appreciate what they are letting themselves in for and have both a sound rationale for, and commitment to, the new name to ensure its success.

The downsideJust as there are good reasons to create a new name, there are good reasons not to. Before embarking on a rebranding programme, brand owners should consider whether any of the following apply.

When a new offer is not really new An organisation that wishes to distance itself from previous bad press or poor performance by adopting a new brand name will fail to convince, unless the rebranding is accompanied by other measures to address the reasons for its unpopularity. Two recent examples come to mind. Ondigital changed its name to ITV Digital and created a popular advertising campaign with Johnny Vegas and the knitted monkey, but failed to save the business. Likewise, just weeks after Camelot’s £70m rebranding of The National Lottery to Lotto, sales hit an all-time low. Although it is too early to assess the full impact of the name change, it is unlikely that changing the name of the brand without changing the nature of the game will encourage either new or lapsed consumers to retrial the offer.

Internal reasons alone New names can be a powerful unifying tool for an organisation which has undergone significant organisational change (see above), but external perceptions should take precedence in the naming decision. A new name should signal a new corporate identity, not just the packaging in which it is wrapped. Internal perceptions in themselves are not usually a powerful enough reason to go through the risks and costs involved in a corporate name change.

The reverse can also be true. The vilification of the Post Office Group for the adoption of Consignia might have been avoided if internal and external audiences had been more fully consulted, and the genuinely positive reasons for change (to allow internal divisions to expand their offers and to compete in overseas markets), had been communicated.

Ironically, the public outcry over the perceived loss of the Royal Mail and Post Office brands was misplaced, because the company always intended to retain these names for its UK mail and retail services. The subsequent decision to drop Consignia in favour of Royal Mail Group demonstrates the importance of getting it right first time, and the significant costs involved in not doing so.

Insufficient funds Rebranding is extremely costly and cannot be done half-heartedly. The cost of creating and registering a new name is a relatively small part of the required budget: it is in the communication and implementation of the new name that millions of pounds may be spent.

Developing a successful name Assuming that you have considered these scenarios and decided that your company does need a new name, how do you develop the right name and ensure its success?

First, you need to define the the role the name must play in helping achieve your strategic objectives. Be clear about what the name needs to do, the benefits and values of the brand, and who it needs to engage. This will direct the type of name that you require, in terms of how it intrinsically communicates the corporate offer. The table above illustrates the spectrum, from descriptive to abstract, with examples taken from the business to consumer UK financial sector:

The more descriptive a name is, the easier it is to understand; also, typically, the more difficult it is to register. An evocative name has obvious roots; an abstract name will be a coined word or else a word whose original meaning bears no relevance to the sector. The reasons for choosing a particular type of word will be determined by:

• the level of investment available for brand building: in other words, how much resource can be used to pour meaning into the brand and its name
• the number of trademark classes and national markets in which the name must be registered. The higher the number, the more difficult it is to protect your new corporate name. This is the main reason why names such as Consignia and Diageo are made up names
• the decision whether to conform to, or break, market norms. How similar or different do you want your brand to look and feel from its competitors? Monday may well be currently greeted with easy jibes of ‘that Monday feeling’ and ‘I’m having a meeting with Monday on Thursday’, but in time it may well be seen by both its staff and its customers as it is intended: to denote fresh thinking and new beginnings, rather than the unwelcome start of the working week after two days of freedom.

 

Second, keep the name team small. Naming is a subjective business and the fewer expressions of likes and dislikes the better. Be confident that if your name meets your brief, it can be infused with new associations and attributes through design, communication and customer delivery.

Once you have decided on your new name, the rationale for why it is required and why it has specifically been chosen must be clearly demonstrated. Its success will require the demonstrable conviction of senior management and its consistent communication and application throughout the organisation. Once a company has changed its name, it should not change its mind. The long term effects of the Consignia debacle are as yet unknown, but it is likely to have increased both internal and external concerns that the organisation lacks a clear business strategy on how to evolve into a forward-looking, self confident international company.

Believe in the name that you are launching. Everyone will have an opinion about your new name. Few people will like it initially. But, over time, if you follow these simple rules, your name could become as successful as Egg or Orange, two names that were unthinkable as brand names at the time they were launched.

Jane Wall is head of naming, Corporate Edge, Tel: 020 7855 5775, E-mail: j.wall@corporate-edge.com