The 2 Most Common Mistake In Naming a New Company or New ProductMost of the time, business owners and organizational marketers look for a new company name or new product name that seems to get the job done. That's unwise because they don't take the time to think about possible shortcomings of the name they settle on. Instead, those shortcomings emerge over time, costing them dearly in sales and opportunities. Sometimes the name problems require an expensive rebranding overhaul.
It's far more cost-effective to name your product or service properly in the first go. Use this checklist to identify hidden pitfalls of some names so they don't blindside you.
1. Are you using meaning elements that are obscure or unknown to your target market? For example, an Australian company hired my firm to rename their business communication product when they were expanding to the U.S. because the name they'd chosen wasn't familiar to American office workers. Words that are everyday terms in Great Britain and Australia but not in the U.S. include "whinge" (for whining) "redundant" (for unemployed) and "turnover" (for annual sales).
An unfortunate mismatch between meaning and market can also rear its head because business owners misjudge the level of sophistication of potential customers. A software company, for instance, was taken aback to learn that small businesses didn't generally know that the initials "CRM" in their product name stood for "customer relationship management." Likewise, a wine shop named Terroir to Taste, using a French term that wine aficionados know, didn't attract casual wine shoppers because they mistook "terroir" for "terror."
2. Is a name or part of it difficult to pronounce? In my childhood, I discovered that my last name, Yudkin, was hard to say for some people, but as an adult, I'm unendingly surprised how often my first name, Marcia, causes people to hesitate or stumble. According to HowManyOfMe.com, "Marcia" is the 433rd most popular first name in the United States, with 138,091 American residents having it. This shows that a word or name you believe is familiar to people may not be.
According to studies by researchers at the University of Michigan, when people have trouble pronouncing a product name or business name, they consider it to be risky. Researchers at Princeton University discovered that companies with hard-to-pronounce names even performed less well in the stock market than those that sat easily on the tongue. So try out your proposed new company or product name on a broad cross-section of people to make certain most can pronounce it easily.
3. Can your name pass the telephone test? By that I mean, if you answer the phone saying your company name, would a caller who didn't already know the name be able to hear it correctly? Some company names are so baffling out of context that people can't sort out the sounds into something that makes sense to them. Someone once told me that when I reeled off the name of my publicity book, they heard it as 6 Debts to Free Publicity instead of 6 Steps. I learned to pause an extra millisecond after "six" to get the name across, but many company names are not salvageable in that way.
Don't let your excitement about a new company or product name carry the day. Consider it from a variety of angles and get feedback from folks in your target audience before committing yourself to a name you're going to promote like crazy in the marketplace.