Don’t rebrand your company
… unless you have to.
Company names by themselves are not as important as you might think.
Of course there are some important considerations to choosing a name like: it's important they are easy to say, easy to spell, are protectable, are supported with good domain name availability, and can grow with the business, but on its own, the name doesn’t mean much. Every new company starts as an empty vessel, where the name only derives value from the combined actions of a company and its people. A brand is built and shaped over time. So don’t get hung up on a name. Don’t take it from me, take it from Gary.
Or maybe more trustworthy on the topic: Joachim ter Haar. He says:
“It is never about the name. A name is just a word. Making it into a brand is up to you.”
It is the combined value or trust that others have in your name that creates your signature for future investments and engagements.
Renaming your company or product comes with significant costs, loss of brand value and work you could do without. This is to be avoided whenever possible. So rule #1 is: don’t rename unless there is a more important (read: valuable) reason to go against rule #1.
Therefore, the rule of thumb is: Only rename when ‘the cost of doing nothing’ is (much) higher than the renaming investment, loss of brand equity and the time it takes to go through the motions.
There are, however, plenty of good reasons to rebrand, some of which I have provided below.
1. Outgrown
If you have a descriptive name that no longer describes what you do and limits you in attracting the right customers, a new name is needed for growth. This often happens to companies with names that said exactly what the company wanted to do when they started. Descriptive names are great for early stage startups because it creates a short-cut in describing what it is you do. It helps your elevator pitch. Until it doesn't anymore. When you outgrow the name, it immediately limits your growth. There are bigger and smaller examples of this that you may have heard of. This is the most common reason for renaming that we come across in B2B tech; where companies launch with a part of the problem, the tech or the solution in the name. As the business grows, this often dates quickly.
Apple changed its name from Apple Computers in 2007 to reflect its diverse product offering where among the Mac, iPod, Apple TV and iPhone, only one is a computer. A small but important change that maintained a connection to the name that had value already. An example of a complete name change is Best Buy which started off as Sound of Music. The reference to music alone was clearly too narrow for the ambitions of the company.
2. Going international
When starting out with an audience that is close to you and at the time seems like your only audience, choosing a local language name is understandable. But when the product has the opportunity to serve a much bigger audience, the name can become a show stopper.
The local name tells an international audience ‘this is not for you’.
A famous brand that was renamed for that reason is Sony. They first came to market as Tokyo Tsushin Kogyo - which tied them closely to Japan and was not easy to remember or pronounce for the larger part of the world population.
3. Legal problems
When organizations are faced with legal challenges in the area of trademarks they are sometimes forced to change their name or pay off the opposing company. Microsoft did that with a guy named Mike Rowe. Mike Rowe, registered a domain name "MikeRoweSoft.com" for his web design business. Microsoft was concerned about trademark infringement and, sent a cease-and-desist letter, leading to negotiations and eventual payment to the student agreeing to proceed with the domain name: "MikeRoweSoft.ca"
This is a costly exercise that often could have been prevented if the trademarking had been done well to start with. (This is why we make a big deal of that in all naming processes).
Another example is Apple Inc. disputing The Beatles' music company, Apple Corps Ltd. For years they wrangled on whether Apple Inc. could use the "Apple" name for its digital music products and services, which they obviously did. This ended expensively for Apple Inc. but never stopped them. For smaller organizations, this could stop everything because it’s simply unaffordable.
4. Scandals
Scandals stick to anything and brands in particular. Therefore rebranding can be a smart strategy to distance oneself from a scandal or big tragedy.
I often remind people of the Anderson Consulting (hi)story of Accenture. Young people have never heard of Anderson Consulting while they were huge and an employer (brand) of choice for many when I started my career.
That is a renaming well done and much needed on the back of the Enron scandal.
5. Strategy Pivot
We have seen it recently that a famous brand sometimes changes their name knowingly, discarding massive brand equity loss, for the sake of making a change in strategy and making it very clear. Prince did it too with his renaming to T.A.F.K.A.P. in a way. The renaming becomes a loud and public way of announcing the Pivot.
Think of Twitter becoming X. Musk is not trying to make it subtle or bridging old and new, as rebranding is typically done - he does it boldly. This is clearly a very specific example that worked in many ways thanks to Musk’s and Twitter’s celebrity status. I can not think of such a huge, public, and radical renaming done the same way. Let me know if you’re aware of another example in this category.
In conclusion: don’t change your name - it is costly. But of course rename if the Cost of Doing Nothing (CoDN) exceeds the investment massively.
Then perhaps needless to say… if you are going to rename, or merge names following acquisitions, timing is of the essence and the longer you wait, the larger the brand equity that gets lost or needs to be ‘lifted and shifted’.
There is also a huge opportunity to create momentum by renaming when it is done for sound reasons and done well. More about that later…
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