26 January 2010

By Ken Schmaltz, Marketing Director, Twist Marketing

You’ve decided that renaming your company is the right thing to do (or your company is new and needs a name). You’ve explained to your employees why you’re doing it, and the objectives behind the name change.

Now’s it’s time to decide what type of name will best help you achieve those objectives.

There are different types of names for you to choose from—descriptive, suggestive, abstract, location-based, acronym—each with their pros and cons. Some are better at achieving short-term objectives, but can hinder future geographic growth or product line expansion. Some require larger budgets than others to effectively get established. Some are appropriate for specific industries, but not others.

Descriptive names
These communicate clearly what you do, but can also sound bland. For example, Joe’s Oilfield Welding tells you that the company is owned by Joe, and he welds things in the oilfield. The name lacks sizzle, but it’s entirely appropriate for his industry and his business, so long as he doesn’t plan to expand to, say, construction or pipeline construction. By contrast, “Jerry's Guide to the World Wide Web,” which said what the company did and who co-founded it, Jerry Yang, was declined in favour of the less descriptive but more evocative “Yahoo!”

Suggestive Names
These are often made-up words that sound good and allude to what the company does or the benefits it provides. Take “Accenture.” It alludes to acceleration and venture, and it sounds good. The risk of suggestive names is that either the allusion is lost on people, or what sounded good in the boardroom sounds dumb to customers. Also, non-descriptive names generally need more explaining, at least initially, and therefore require larger budgets to launch and promote. Accenture had the profile, media coverage, marketing budget, and one-to-one customer contact through its consultants and sales force to pull off the switch from its well-known “Andersen Consulting” moniker.

Abstract Names
These are names that essentially have nothing to do with the company. Examples are Google and the previously discussed Yahoo! These are very difficult to pull off (anyone remember a little software company that called itself “Purple Yogi”?), but when they work, they work well. Like suggestive names, they generally require more explaining and larger marketing budgets to get rolling. One notable exception is Google, which took off through word of mouth before receiving massive media coverage.

Location-Based Names
Unless you have absolutely no aspirations to grow out of your own backyard, don’t name your company after your location. Great Plains Plumbing would be a good name for a plumber in Omaha, Nebraska, but Great Plains Software was a lousy name for a software company selling its products around the globe. After languishing for years as an almost-ran, the company was acquired and its product is now Microsoft Dynamics.

Acronyms
Unless you’re IBM or RBC, don’t do it. Period. They’re not descriptive, they don’t sound good and they don’t mean anything to anybody except your employees, and often they don't even know what the letters stand for.

The Twist: Select the type of name that will best help you achieve your business objectives, while balancing your short- and long-term company visions. And never, ever shorten your name to an acronym. Never ever.