Getting The Wrong Company Name
There was a great article on the BBC recently that looked at how an established and proven company name can suddenly become bad for business. Normally this is for an external reason that could not have been foreseen.
The question is whether changing the name is worthwhile, whether it will increase sales or cause a sudden dip.
I write this post because we recently helped finance a company re-brand. The lender had concerns over whether the re-brand would have a positive impact on sales as was projected, or whether some value was going to be lost which could see income fall. It was a close call and one which, like many things in life, could only really be proven by actually doing it and seeing what happens.
Bad Press, Change of Hang in There
Back in 2013 there was an attack on an oil refinery in Algeria, it was a terrorist incident that was carried out by members of the Tuareg tribe. On the face of it the incident was another terrorist event, however for VW it presented a problem.
One of VW’s best selling models was the Tuareg. A very nice car as it happens, however it presented a problem with the word ‘Tuareg’ being associated with atrocities rather than being associated with a quality SUV crossover vehicle. In the end VW stayed with the name as they believed the press coverage would subside and the public would not connect the two. It was probably the right thing for VW who were keen to protect their brand.
Ironic, that it was VW’s own actions that had the biggest impact on their brand, however another story for another day.
What makes the Tuareg story interesting in terms of company names is that there are a number of companies and institutions called ISIS. I know a few companies who use the name and have done so for many, many years. Notwithstanding that it is also a river in Oxford (that becomes the Thames), is closely associated with Oxford University and is an Egyptian goddess, the name carries a slightly different inflection these days.
The question is, when do you change and when do you stick?
If you think of airlines, there are very few names that survive a crash or where negligence was proven. It doesn’t take much to think of the airlines you have flown with that no longer exist, their airplanes are still flying but under a different company or different banner. That said, Malaysia Airlines made the decision to stick with the same name and logo despite losing a couple of planes very quickly, nothing has been proven as to the causes, but it still impacts on perception.
Just Getting It Wrong
Strangely, the more you look into company names the more interesting things get. Whilst avoiding connections to atrocities or terrorist groups is pretty obvious, sometimes the name just doesn’t work any more.
Take a look at these companies and what they are known by these days;
- Auction Web – Ebay
- Backrub – Google
- Tokyo Tsushin Kogyo – Sony
- Blue Ribbon Sports – Nike
- Confinity – Paypal
Could you imagine seeing ‘Tokyo Tsushin Kogyo’ at the bottom of your TV? Or maybe slipping on a pair of Air Jordans from Blue Ribbon Sports? No, me neither.
The purpose of this post is not to answer what should or should not happen, it came from financing a company re-brand. I spent some time with the business owner looking at how we best justify the change to the lender. In the end there was a real benefit to better explaining what the business did, also the company had moved with the times and the old name did still leave them appearing to be out of touch.
If you are considering a name change please get some advice, it will help future finance raising as much as marketing.
By Dave Farmer
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