Changing Your Company Name: The Good, The Bad and The Unnecessary

Most of the time, companies that come to my naming company frantic to find a new name for their firm or for a product do so because of legal problems. They've received a case-and-desist letter, and it's cheaper and wiser to switch than to fight.

Even those who follow corporate name games probably don't realize that Kentucky Fried Chicken falls into this category. In 1991, the company told the public that they were changing their name to KFC because health-conscious consumers were shying away from the word "fried." Since the name change coincided with the introduction of several purportedly healthier menu items, this seemed plausible.

In fact, however, in 1990 the state of Kentucky had trademarked its name and created the requirement that any business using the word Kentucky for business purposes would have to obtain permission and pay licensing fees. Kentucky Fried Chicken took umbrage at the idea of paying for a name they'd used since 1952. Their negotiations with the state broke down, and they adopted KFC as their new name.

The second most common impetus for an organizational name change is a word in the name that's gone out of favor with the industry or with the general public. For instance, the Massachusetts State House is considering legislation to rename the Department of Mental Retardation the Department of Developmental Disabilities, in keeping with altered notions of appropriate labeling.

The same goes for company names that sound old-fashioned and out of date. In 2009, a shop called Fotos and Film raises the issue of whether or not they're in step with today's digital photography.

The third good reason for changing your company name is that the name no longer fits the services you perform and the goods you sell. If you launched as Westfield Wire and now you make mainly cables, renaming is indeed in order.

Likewise, geographical growth or relocations can render a business name obsolete. If Gerard County Savings Bank expands beyond Gerard County, it should put itself in line for a name change.

Got a name that people just can't remember or that they confuse with your competitor? One company came to us for renaming because even people who'd previously bought from them couldn't remember whether they were, let's say, MyGrandPhotos.com (correct) or YourGrandPhotos.com (the competitor). Renaming makes sense for that situation, too.

If you're just plain tired of your name, however, forget about a name change. It involves a lot of expense and effort to convince the public to get on board with the new name. Don't go there for frivolous, unnecessary reasons.

The final situation, mergers and acquisitions, which often prompt renaming, depends on the situation. Restaurants that take over from a disreputable or failing establishment do well to signal their fresh start with both a name change and redecoration. However, a company that was humming along fine before the change of ownership should usually continue with the name they had before. In business, longevity and consistency inspire confidence.

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Marcia Yudkin is Head Stork of Named At Last, a company that brainstorms creative business names, product names and tag lines for clients. For a systematic process of coming up with an appealing and effective name or tag line, download a free copy of "19 Steps to the Perfect Company Name, Product Name or Tag Line" at www.namedatlast.com/19steps.htm