Many times throughout my career, I’ve been confronted with the task of assisting companies in the mortgage industry with changing their corporate names. Undergoing a name change is a very complex task that requires significant resources and a well thought-out strategy especially when the old or current name has significant brand equity. For that reason, I tend to err on the side of keeping the current name unless the reasons for the change are truly compelling, with no other reasonable option in sight.
The number of name changes among U.S. corporations, according to an Anspach Grossman Enterprise survey, has recently broken long-time records. Of those changing their names, 52% changed because of mergers or acquisitions; about 44% wanted to better define themselves. These are certainly valid reasons for a name change. Here are some others that may warrant a name change
A change of ownership: This may or may not be a good reason, depending on the circumstances of the ownership change. For example, if company X has been floundering, the change may assist in an overall effort to breathe new life into the company. However, maybe an updated logo could suffice to communicate something new about the company.
Eroding market share: In this case, a name change could make sense depending on the reason for the erosion. Conducting a brand assessment study would be recommended in this case prior to considering a name change. Once again, an updated logo could do the trick along with other internal changes in how business is done to make the change relevant, not just some shallow design change for no apparent reason.
A change in the market: Changes in the market can drive a change in your business model and sometimes even a name change could be warranted. However, solid research is still recommended to be sure such a name change would truly be in your favor or even necessary. Ditech is a great example of this. Through extensive research, Ditech's CMO, Rich Smith, discovered that the name still resonated very positively with consumers.
Damaged reputation: There are times when the only way forward is to reinvent the brand altogether. However, through artful damage control, your brand could actually become stronger. Remember the Tylenol tampering case? This case has come to be known as one of the very best and most well-known and studied examples of brand damage control.
Your name is not reflective of the business you’re in: Here's a great example we're all familiar with: Boston Chicken renamed itself Boston Market when it added other meats and various other menu items. If you add or remove services that are directly reflected in your name, then this could be a reason for a change. This is particularly true for industry product and service providers that expand their offerings to drive deeper relationships and greater profits.
The above may be good reasons for a name change, however many times I’ve found the change can be avoided after gaining a thorough understanding of the reasons behind it. If the change is necessary, the corresponding commitment in branding and marketing to drive a new name home in the marketplace requires an intensive, detailed strategy. This is especially true if you’re a retail mortgage lender where the market is saturated with competition and your message can be very easily drowned out.
Here are some reasons to avoid a name change
Established marketing equity: A company can work for many years to build its niche and establish its brand, reinforcing it with brand and marketing strategies. Once you change the name, you’re starting all over again and it will take significant resources to build yourself back up. Of course, with a good communications strategy it is certainly done all the time.
Oftentimes, the unintended consequence can be brand confusion instead of clarity: There’s a process to a name change that goes well beyond unveiling a new name, because you’re asking people to forget one thing and accept another. Working with a firm with branding and brand development expertise is highly recommended. Developing a new brand cannot be accomplished with a marketing or public relations campaign or shallow changes to your messaging. Developing a brand is a separate discipline altogether.
It’s expensive: With a name change comes a new collateral suite along with a robust outreach program fueled by a new brand and brand strategy. If the change is avoidable, then you can focus on re-developing your brand and subsequent brand strategy.
Here are some additional considerations for you when contemplating a name change
Could you solve your problem by simply re-marketing, or redeveloping your brand? If so, then you only need to focus on your brand instead of your name and brand.
Is the name you’ve selected available? You can conduct a cursory search through the United States Patent and Trademark office website. A more comprehensive search will need to be conducted by your attorney.
Does the new name resonate with your target audience? To be sure, you’ll need to consider conducting a focus group study and/or test it rigorously with a select group of people in your target market.
Does the name sound similar to that of a competitor? If so, consider other options especially as online searches, depending on the degree of similarity, may turn up both names. This search snag brings with it another layer of branding challenges to be dealt with.
If you’re considering a name change, you can see the ramifications of such a change are far-reaching. Reacquainting your target audience with something new can be an exciting process, but it’s important to be aware of the complexities. This is especially true for an established brand that’s been years in the making.