In brief: If your company is going through a rebranding effort and you’re thinking of changing your brand name, read this first. Not only is a brand name change quite costly, it could actually do your brand more harm than good. Oftentimes, rebranding under an existing name is a much better option.
If you’re thinking about changing your company’s brand name, read on…
Because as exciting as the thought of a new company brand name, logo and brand identity may be, a name change will require a significant undertaking. You’ll need to endure some potentially significant setbacks and expenses to (re)build your brand awareness and explain the reason for the change to your employees, customers and stakeholders (More on that in a bit.).
So, let’s start with a few questions:
What specifically is the problem with your current brand name? How do you know it to be true?
Do you have concrete evidence or specific feedback that your current brand name is an issue or a liability? Or is it more of a gut feeling?
One more question: Have you recently (in the past twelve months) done a formal brand assessment among your customers, channel partners and employees to identify how your company brand name is perceived?
If not, strongly consider a brand assessment before moving forward on doing something that may not be as necessary as you think.
When a brand name change is necessary
[Brand – a unique set of distinctions your company owns that make a positive and noteworthy difference in the lives of customers, channel partners and employees]
Yes, there are times when creating a new name, logo and identity is absolutely necessary, and at times, unavoidable. Below are some of the more common scenarios that would require your company to create a new name:
- Your name is too similar to another, causing customers to confuse the two while potentially compromising online search. And, If the other company has a poor brand reputation, you’re only winning move may be to adopt a new identity.
- You discovered your brand name means or represents something distasteful or offensive in another country or culture. (This is more common with product names than corporate names.)
- You’re going through a merger or acquisition and your current name no longer fits or represents the full scope of what you do or how your company has changed. (The most common situation.)
- Your brand name is no longer accurate or is limiting. In other words, you’ve expanded your business and your current brand name is impeding your ability to grow and serve different customers. For example, if ABC Fluid Film Bearings wants to expand into magnetic bearings, a name change, or modification would be necessary.
- Your company name is also the name of the founder who is no longer a part of the company, and the name is consequently devaluing or eclipsing the personal brands of other key people in the organization.
A case for rebranding without a name change
If your situation doesn’t align with any of the scenarios described above, rebranding under your current name will most likely be your winning move, even in the cases listed below:
You’ve reinvented your business to provide improved products and/or services. Some may think this would be an ideal time to change the company name. Not so fast! Unless you are significantly changing the focus of your business to target different buyers, you’re much better off keeping your current name and updating your brand. Why? You’ll avoid the unnecessary costs of changing your brand name (research, marketing, creative, rollout, losing position in search, confusing the market, etc.)
In this scenario, your better option would be to update your company’s brand statements, marketing messages and tagline to reflect the updated essence of your new brand.
Your brand name suffered reputational damage. There are plenty of companies thriving today that successfully navigated their way out of a bad reputation or crisis. Remember Tylenol? VW? United Airlines? Ford? (It will be interesting to see how Southwest Airlines finds its way out of the problems it suffered in December of 2022.)
Changing your brand name post-crisis has the high potential of backfiring because some may believe you’re trying to run away from an, at times, self-inflicted horrible event or situation. Such a move would be viewed as deceptive, because it is. There is an old saying that how a person or company reacts to a crisis is more important than the crisis itself.
The only winning move here is to face the music, admit guilt, issue a sincere apology (not the standard cut-and-paste kind you’ve heard and read so many times) and work to regain trust through your actions. A new brand emphasizing renewed company values will also help quite a bit. (This would also be an opportunity to launch your comeback brand!)
Your name has a geographical tie. Proceed with caution on this one because a brand name change in most cases will result in unnecessary costs and stress to the company and brand. Think of it this way – most brand names associated with a region, city or state in the U.S. contributes to a strong value proposition of being American-made, which does indeed have appeal in other countries. Compare to the brand value and brand perception of items adorned with a “Made in China” tattoo. There are many companies doing very well with geographically based brand names.
So, unless you have evidence that it is holding you back from growing, reconsider your belief that a name change is necessary.
If you feel you have a unique situation that falls outside of the scope of this article and would like to discuss whether to keep, change or modify your brand name, fill out the form below, and let’s talk.