Good Practice for Choosing a Company Name

Naming a company used to be so simple. Financial firms, department stores, and publishing houses featured the names of their founders; Guinness, Bloomingdale's, McGraw-Hill, Goldman Sachs, J C Penney etc.

Companies that manufactured products took the words that best described their business: International Business Machines, National Cash Register, General Electric, Minnesota Mining & Manufacturing.

Some industries had both: General Foods and General Mills vs. Kellogg's and Kraft. General Motors vs. Ford and Chrysler.

Then came the 1990s. The internet and its impact, both in the proliferation of new companies as well as the expansion of information and global awareness, have contributed to an explosion of names that frequently sound unrelated to a company's business and often use manufactured words: Yahoo!, Proxicom, Avaya, Priceline, Blackberry.

While the internet is not the only contributor to this trend, it has had a huge influence. The internet's lack of boundaries and wealth of information has made users comfortable exploring places and topics they were never aware of before. As a result, acceptance of words from other cultures and the exposure to the unknown and the unusual have made people less judgmental regarding new names.

Meaningful words

While this trend has accelerated recently, it is certainly not new. In 1888, George Eastman created the word Kodak because he liked the letter 'K'. "It seems a strong incisive sort of letter" he said. "It became a question of trying out a great number of combinations of letters that made words that start and end in 'K'." His new word was even taken further in the early '20s, when General George Squier merged 'music' with his favourite 'high-tech' company, Kodak, and created the name Muzak.

Then there's Xerox, known as the Haloid Company until 1961, when they chose a name based on the word xerography. And xerography? While it's a derivative of the Greek words for 'dry' and 'writing', the word was coined by an Ohio State classical language professor to describe what was then called electrophotography - now known as photocopying.

In recent years, the growing trend toward unusual names is a result of buyers being much more receptive to new words, says Lexicon Naming, whose creations include Intel's Pentium, Apple's Powerbook and Procter & Gamble's Swiffer. "Twenty years ago nobody would have looked at a magazine called 'Wallpaper' unless they were interested in wallpaper", says Placek. "Now consumers will stop and look because names signal an edge".

Consequently, naming has become much more strategic. Names give companies a competitive advantage that cannot be taken away. A name should be the foundation of marketing efforts.

The recent spate of new company names seems to reflect this approach. Accenture, Andersen Consulting's spin-off, claims that their new word puts an accent or emphasis on the future, just as the firm focuses on helping its clients create their future. According to the company, Accenture is a youthful and dynamic expression of the firm's new marketplace positioning as a bridge-builder between the traditional and new economies. Aperian, formerly Micromedia Solutions Inc., derived its new name from the Latin word 'aperi', meaning a passage inside, an opening or portal. Avolent, based on the French verb 'to fly or soar', changed its name from Just In Time Solutions to symbolize the company's higher aspirations to provide enabling technology. Cingular, the joint venture between the wireless units of SBC Communications (originally Southwestern Bell Corporation) and BellSouth, says their new name shows the importance of the individual customer as well as the unity of this joint venture.

Obvious names with not-so-obvious drawbacks

Conversely, the internet has also resulted in a trend toward generic names, such as Garden.com, Furniture.com, and Pets.com. In Ireland names with .com, .net, .ie, etc. are no longer accepted for registration within the title of a company name by the Registrar of Companies. Registration of such name are recorded with the Domain Registry. In the long run, however, these names, while simple and easy to remember, have their drawbacks. It's tempting to use a common name. But no one can own that space. The more competition there is, the more having a generic name, with no personality attached to it, will eventually hurt you. A brand is only a brand when people have expectations and beliefs about it. This is built over time, through advertising, use, and word of mouth.

With a common name, prospective customers can't differentiate between a site name and the category name. Consumers are unable to associate a specific attribute with a generic name because the name stands for the entire category, not just a particular site. Not surprisingly, when Sof-ware.com and Phone.com joined forces, they christened their new company Openwave.com.

Identifying a winner

With so much to consider, developing a new name really is an art. "We use science and linguistics to help us," says Placek. "But ultimately, it's not something a computer can do. You have to look at the competition and the marketplace. None of our great names have come from a computer." Brainstorming, using morphemes (the smallest, semantic element of a word), and market research all contribute to the process.

As for the future, one area that Lexicon Branding is researching is three-word solutions and how they affect the success of a name. "In upcoming years, I think we're going to question the validity of short names really being better than long ones," says Placek. "Right now, most clients want no more than seven letters."

In the long run, however, whether it's a short word, long word, two words, or six, the values and personality that people ascribe to that name will ultimately dictate which companies in this slew of new businesses take their place next to Microsoft, Coca-Cola, and McDonalds.