9 Company Naming Principles

The biggest mistake that an organization can make when changing their company name is to leave their target market out of the equation. It is the target market that should drive the company name change decision-not the executive committee, the CEO or even the Board of Directors.

The YMCA provides one of the most dramatic examples of effectively listening to the target audience. In August 2010, they undertook a namectomy, which is Strategic Name Development's term for shortening a name. The change to simply The Y worked because it's the term the target market uses to describe the brand.

Hi, I'm Diane Prange and we've just covered the first of nine principles for company name changes. In Parts I and II of this short video series, we will cover both successful and unsuccessful applications of these nine principles.

So now that we've covered the first principle, ensuring your name is target market driven, let's move on to principle number two.

2. Vision. It's not where you've been, but where you are going. The new company name should reflect the journey ahead.

In August 2009, Radio Shack announced a name change to "The Shack." Dropping the word "radio" helped the company reposition itself as a hub for all electronic devices. The company not only enhanced is reputation, but likely contributed to tripling its stock value in the 12 months following the rebranding.

3. Compatibility. The new name should relate to the company's products and service offering.

Harrah's acquired and renamed its rival, Caesars Entertainment in 2005, but by 2010 the name Harrah's changed to Caesar's Entertainment. The Caesar's name, not Harrah's, is perceived as the world's number one casino brand.

4. Sensitivity. Names are personal and can often evoke strong feelings. Consumer's attachment to the company's heritage and existing name should be considered when developing a new name.

To take advantage of Crayola's 99% brand recognition in the U.S., the company changed its parent company name from the obscure Binney & Smith to the playful, creative Crayola in 2007. This is a good example of being sensitive to the target market.

5. Employee Buy-In. Your employees know the business and its customers better than anyone. They are the company's ambassadors and buy-in is critical.

In 2001, Anderson Consulting adopted its current name, Accenture - accent on the future. Employee buy-in was employed as the new name was submitted by a Danish employee from the company's Oslo, Norway office.

Welcome back for part two of 9 Principles for Company Name Changes. To recap, we covered the following five principles in Part I:

6. Less Is More. In today's vernacular, less is more as attention spans are shorter-likely influenced by Twitter and text messaging.

National Public Radio opted for a short, three letter acronym - NPR. Likewise, The Yellow Pages reduced their name to simply YP. Unfortunately, their target market doesn't refer to the company as YP. To make matters worse, it sounds more like a personal hygiene question than a brand...why pee?

7. Visibility. Secure a spot on the web by making sure the company name is available as a '.com' domain.

In the wake of adverse publicity, Blackwater president Gary Jackson announced a name change to the highly provocative and contemporary Xe. What's surprising, is that the multi-billion dollar corporation did not secure the URL for Xe, which is currently owned by a currency trade exchange.

8. Think Globally. The corporate world is littered with companies that have stubbed their toe in translation. Check the proposed company name globally for any offensive association culturally or linguistically.

In March 2009, The Sci Fi Channel announced an orthographic name change to SyFy in hopes to distinguish itself from its cable competitors and become less 'geeky'. This name change was not accepted very well. More importantly, "syfy" is slang for syphilis in Polish and often perceived as that in English as well.

9. Persistence. Don't expect the first, second or third name candidate to be available. It's not uncommon to develop 1,000 names to find that fewer than 100 are trademarkable and only a handful of those fit strategically.