Comcast’s rebranding of its cable, telephone, and Internet services (now Xfinity in 11 markets), prompted an interesting article in Time regarding the value of a name change. “Here’s one thing we do know,” 
says Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management. “Comcast is going to spend a huge 
amount of money to get that brand to mean what it wants it to mean.” Here’s another thing we know: Shareholders should be asking, “Why?”
Was this name change a smart move? 25 years ago, my father and his colleagues at Manning, Selvage and Lee surveyed the financial community about what kind of corporate names attracted investors and whether a name affected people’s decisions to buy or sell stocks. Nearly two-thirds of the securities analysts, portfolio managers and investment advisors surveyed said that a corporation’s name had a direct effect on whether a customer buys a stock. In fact, brokers and analysts shared that they had even turned down the recommendations of their own research departments when they did not like a name! Takeaways from the survey include:
- Be wary of a name change and be prepared for a name change to take time (years and even decades) before it achieves the previous level of familiarity. At the time of the survey (1985), respondents derided the decision made by Tampa Electric to change to TECO Energy. While the new name did eventually take hold, it took years to build up the level of recognition Tampa Electric once had. While companies often change their names as a result of acquisitions and divestitures, because the focus of the business has changed, or to create an association with a trend, the survey indicated that many companies would be well served to think twice.
- A name should be easy to pronounce and remember. “Keep it simple and short,” my dad advised and pointed to the frustration of one investment advisor whose suggestion of “Harnischfeger” rarely resulted in more than a puzzled look.
- Good names are recognizable, easily understood, highly identifiable, and give a clear impression of the business. Although names like Exxon and Google can certainly work, give serious consideration to a name that describes your companies business. Personal and brand names are popular for these reasons. Survey participants responded well to names like National Semiconductor or Staples. Likewise, start ups should avoid using initials. While initials are fine for a well established company as IBM, potential investors are more likely to be attracted to a product they can easily recognize.
While there are a variety of other factors to consider when determining a name today (e.g. optimizaiton of the name in search engines, the availability of the website domain and/or username availability for social networking and bookmarking sites, among others), many of the insights from 25 years ago remain compelling.
How important do you think a name is to the success of a brand? What do you think of Xfinity? Please share your thoughts with me and the readers of BurrellesLuce Fresh Ideas.
