My name is…
Last month, a near 100-year-old US brand, RadioShack, filed for bankruptcy. In a fast-moving retail landscape, it was brought to its knees following 11 successive quarterly losses. Analysts called the electronics retailer outdated in a market where consumers increasingly head online to shop. But this AdAge article laid the blame squarely at its name.
A radio? What’s that?
The piece argues that consumers didn’t relate to the company’s name and many had no idea what RadioShack actually sold. But management failed to make the decision to change the company’s moniker in the 1990s when the radio began its journey on the road to extinction.
A brand’s name is an attribute of its identity that typically remains untouched throughout its lifetime. Logos, colour schemes and brand philosophies might change, but names seldom do.
This month, vehicle listings website AutoTrader announced a brand refresh and name change to reflect its evolving business model. Sure, the company changed its logo, but the “name change” consisted of dropping a “.com” at the end of the name that few ever realised was there. Brands are reticent to take drastic action when it comes to their name.
Some brand name changes have made headlines throughout history, however, and many were a result of the brand’s reputation being damaged in some way. Accenture, one of the world’s largest consulting firms, for example, started out as Andersen Consulting, an arm of global accounting behemoth Arthur Andersen. It changed its name in 2002 following its parent company’s involvement in one of the biggest accounting scandals of all time. Arthur Andersen, once one of the strongest brand names in the world, could no longer trade under that name – the brand was tarnished. The switch to Accenture was the only viable option available to Andersen Consulting at that time – and the cost of the rebrand came in at $100 million.
Vehicle manufacturer Datsun is another example. You might know the brand better as Nissan, but in the 1970s and 1980s, Datsun was the name used by the firm in Western markets. The problem was, the cheap and cheerful portfolio of cars wasn’t well designed for the various climates of Europe and the US – they would rust out extremely quickly. The damage to the brand was severe. Nissan launched a $500 million campaign to use the Nissan brand globally – though the firm never admitted the move was a result of the damage to the Datsun brand. Nissan brought the Datsun name back in 2013 as a subsidiary targeted at emerging markets, but it’s unlikely to ever reclaim its former popularity.
Brands must protect their assets and not let them fall into disrepute. Both companies continue to operate under new names, but there’s an argument that their previous brands were stronger globally. If a brand is failing to perform, all its attributes must be examined including its name.
The most common changes to brand names come in the form of small, incremental changes. These days, brands are on a mission to obtain simplicity. They do this over many years by establishing themselves and their products and services. Their identities evolve – and sometimes that means refining their name. Apple Computer Company becomes Apple, International Business Machines becomes IBM, American Telephone and Telegraph becomes AT&T.
Increasingly, large brands are beginning to trade under acronyms – Ernst & Young is the latest example. These companies are preparing for the future. While their full names hold that sense of prestige and history, millennials won’t identify with them. We’re in the era of 140 characters and brands are future-proofing their names for the next generation of customers.
Which brands as we know them will change in the future? Will the recent financial scandals surrounding Commerzbank and HSBC escalate to the point that forces them to shed their names? It’s not always the brand’s fault. Following a tumultuous 2014, Malaysia Airlines is reported to be mulling a new name to obtain a clean slate. Others like JP Morgan Chase or Exxon Mobil may move to position their brands for future customers by trading under initials, placing their history to one side.
What does your brand name mean to you? Would a disaster prompt you to change it, or would you take the step to avert one?
It’s clear that brands see their names as the most important elements of their identity. But when a name has been dragged through the mud, it seems brands find it easier to drop it and start again than work to repair the damage to their reputation. Changing a brand attribute is much easier when you have positive momentum – doing so when you are in free-fall might already be too late. But if RadioShack’s management had decided to make a change in order to avoid catastrophe, then perhaps the company would have avoided the clutches of its creditors.
Drew no longer works at The Frameworks
- Brand names
- Brand identity