Do you ever get the niggling feeling that you need to rename your business?
Think back to when you were starting up. You were probably focused on developing your products and services, researching the market, looking for office space, and the thousands of other details that precede launching a company.
If you’re like many entrepreneurs, you may not have given enough consideration to the name of your company and/or product, its competitive positioning or how the name supports a story that will intrigue and engage customers.
It’s a common mistake, but unfortunately one that has repercussions over the lifetime of your business.
Even after they’ve been operating a while, many business owners make the mistake of continuing to invest in a weak name because they believe it has earned “equity” and they fear the expense of renaming. But when a brand name is costing you customers, it’s better to cut your losses and reinvest in a more effective name.
Take this example: In its rush to get its new voicemail-to-email transcription service launched, a mobile software company christened its brand Simulscribe — a name that severely hampered word-of-mouth sales. But after it changed the name to PhoneTag, sales from customer referrals tripled and daily signups rose 40 percent in six months, according to Inc. magazine.
It’s particularly helpful to have a strong name during a market downturn, when you need every advantage you can get. A clear, compelling name and brand story can add to customers’ perception of value and quality and help lift your company above the competition. Conversely, a weak name and story makes it even tougher to succeed in a down economy by costing you potential customers at a time when every sale counts.
10 Signs That You May Need to Rename Your Business
1. You’re unable to trademark your name. Going to market with an unprotected name is like buying a house without a clear title. Own what’s yours. If your name is too generic to trademark, or worse, if it’s already trademarked by some other company, you need to rename.
2. You’re losing business to lower-priced competitors. Do customers perceive your offering as a commodity? Rebranding would enable you to develop a differentiated, focused positioning supported by a powerful name and brand identity.
3. Your offerings and/or audiences have changed. After you got into business, you discovered other opportunities, perhaps with audiences unlike those than you had originally targeted. Rename your business so it resonates with your most important market.
4. You learn that potential customers have confused your business with another. Oooh, this is bad. Not only are you not getting the business you could be, your marketing dollars may be sending customers to your competitors. Try testing your brand name’s potential for confusion by using it as a search term in Google. Do the top search results show competitors’ sites as well as your own? If so, your brand name is too similar to theirs. Let your competitors pay for their own marketing by making sure your brand name is completely unique in your industry.
5. People have to be exposed to your brand name many times before they remember it. A good brand name sticks after just a couple of repetitions. A powerful brand name earns a place in the memory bank with only one exposure.
6. Your brand name is long, and it’s frequently reduced to initials. Unless your brand has the awareness of an International Business Machines (IBM) or Kentucky Fried Chicken (KFC), its name loses meaning when it gets shortened to a string of letters. When the brevity required by social media and text messaging tempts people (including your own employees) to abbreviate your brand name, consider whether that name is working for you as well as it should. A strong brand name reinforces its brand story with every repetition, but it can’t do that when it gets reduced to initials, especially if the brand is not already big and well-known.
7. You hardly ever hear anyone say, “I like your name.” Remember, no matter what industry you’re in, no matter who your target market is, you’re dealing with human beings, and our first reaction to a brand is emotional, not rational. When your name connects emotionally, you’ll start a conversation with customers that can include your rational reasons why they should buy.
8. When strangers at an industry conference read the name of your company on your badge, they rarely ask you for more information about what you do. A brand name’s primary role is to pique interest and allude to a brand promise or differentiator. It should be short, memorable and attention-getting. Your generic descriptor —i.e., the product you make, the service you offer, etc.—can do the heavy lifting of explaining what you’re selling. And remember that literal, descriptive names can be difficult to trademark, and they’re often similar to competitors’ names.
9. You’d like to launch a new offering in a different category. Don’t fall into the line extension trap. Unless your new product is very closely linked to your current offering, you’re better off developing a new name and brand story than creating a line extension. Protect your current brand perceptions while staking out new territory with a new brand.
10. Your brand name is limiting your business opportunities. New companies are often named after what they do, where they’re located or who they were founded by. This type of name is easy to outgrow. If your brand name no longer reflects your aspirations or desired competitive positioning, you need a new name.
What about timing? When should you rename your business? More in my next post.