Deciding whether to change your business name isn’t a decision to be taken lightly.
That’s because, like most branding initiatives, business name changes generally fall into three categories: the good, the bad, and the ugly.
A good name is both memorable and differentiating. A bad name can cause more problems than it solves, including everything from confusion to legal hot water. No pressure though.
In what follows, we’ll look at what we mean by a business name change, the risk associated with business name changes, reasons to change your business name, and a few examples of notable business name changes.
- What is a Business Name Change?
- How Risky are Business Name Changes?
- Reasons to do a Business Name Change
- Companies that Changed Their Names
- The Takeaway
Changing your business name is an exciting, rewarding endeavor—when it’s done right. Working with an experienced branding agency will set you up to come out the other side with a set of viable, memorable business names to choose from.
What is a Business Name Change?
A business name change is the process of developing a new name for a business and legally registering the business under the new name.
While there is a technical difference between a business name and a brand name, for the purposes of this article we are using the terms interchangeably.
How Risky are Business Name Changes?
How risky is it to change your company name? In a word: very. There are number of risks you need to keep in mind if you’re considering a name change.
For starters, you risk losing whatever brand equity exists in the business’s existing name. Not unrelated, you sacrifice the brand awareness that exists around the current name, as well as any SEO value you have built under the name.
Other risks include confusion among key stakeholders (including customers, employees, and investors) and/or general backlash from unhappy members of these same groups. We grow accustomed to the brand names in our lives and change can be hard.
Perhaps the biggest risk is trademark infringement. Failing to adequately vet your new company name against possible trademark conflicts is one of the surest ways to find yourself on the wrong end of a lawsuit.
All of this said, however, the considerable risks involved shouldn’t necessarily dissuade you from changing your company name. When done right, the opportunities entailed by a successful business name change far outweigh the risks.
These risks do mean that it’s critical to partner with a branding agency whenever you attempt a business name change. There are plenty of things you can try to do yourself when it comes to your brand, but naming isn’t one of them.
Reasons to do a Business Name Change
So, why change your business’s name? There are plenty of good reasons, some better than others. Below are 8 of the best reasons to do a business name change.
1. You’re Being Legally Forced to Change Your Name
This first one is a no-brainer. If another company has sent you a letter demanding your company change its name, it’s probably a good time to start the renaming process.
It’s also a good time to make sure you don’t end up in the same situation again. When selecting a name, it’s imperative to check all common law usages, social media handles, competitor product names, and URLs to make sure it isn’t already being used.
The US Patent and Trademark Office has a highly searchable database that lets you to do an initial scan on your own.
To keep yourself and your brand safe, it’s always wise to consult an intellectual property attorney before making your final selections. They’ll guide you through the process of filing the necessary paperwork and help you protect your name against future threats.
2. You’ve Outgrown Your Name
Just because your name worked back then doesn’t mean it has withstood all the pivots your company has gone through since.
When Apple originally launched, it was called Apple Computers. In 2007, Steve Jobs announced that “Computers” would be dropped from the brand’s official name.
This simple change meant the brand was no longer tied to a single product. It opened the company to offering a range of consumer electronics. Tesla took a similar approach, dropping “Motors” from its name.
Does your brand’s name still speak to its various offerings? Or is it part of an outdated legacy that no longer reflects who you are today? If the latter, renaming can be an effective way to better encompass everything your brand does—or aspires to do in the future.
3. Your Name Causes Brand Confusion
Is your business often confused with another business with a similar name? Do customers tend to mispronounce your name or have a hard time spelling it? Does your name require a lengthy explanation that only kind of makes sense?
There’s no shortage of ways a business name can cause confusion. Each is like a tiny dagger to the heart of brand equity. When customers are confused, even momentarily, by your business name, it prevents them from making anything but a negative association with your business.
Confusion is one thing you do not want your business to be associated with. Changing your company name is the most effective way to squash these types of confusions before they do lasting damage to your business.
4. Your Name Is Failing to Stand Out
There are many reasons names get lost in the sea of competition. While some are too generic, others are too trendy.
Names that include contemporary buzzwords can feel safe—even cool—at the time, but they run the risk of quickly dating a brand.
Remember when it seemed like every startup in the early 2010s had a name ending with “ly”. For a while this tactic seemed like a good way to grab a clever domain name, but it wasn’t long before the trend felt predictable and cliché.
Avoid such traps by taking a beat to acknowledge your inherent biases. It’s natural to want a name that’s in line with current trends. But it’s always best to ask yourself how timeless the trend will be.
Invite people into your naming process who can think big and unconventionally. Steer clear of the expected and with any luck your brand will outlive the trends themselves.
5. You’re Facing a PR Disaster
In 2014, a new mobile payment company was taking off. They had the backing of AT&T, T-Mobile and Verizon. They even had signs printed out that would go in storefronts: “ISIS Welcome Here!” As it turned out Isis Mobile Wallet was an unfortunate name choice.
Who could have predicted that a company named after an ancient Egyptian goddess would soon share its name with the acronym of the world’s most heinous extremist militant group?
In response to these unforeseen events, the company was compelled to change their name to SoftCard, the very definition of a lackluster name. Not surprisingly, they’ve since been replaced by Google Wallet.
This PR crisis was completely unforeseeable. Isis Mobile Wallet wasn’t the only company to be so unlucky. A San Diego-based brand called ISIS Pharmaceuticals was one of many others forced to change their names.
It just goes to show that sometimes you can do everything right—in naming or any other aspect of business—and the cards still don’t fall your way.
6. You’ve Expanded Beyond Your Geography
Tom’s of Maine, New York Life, Nantucket Nectars, Arizona Tile—there are certain instances where a brand is able to expand beyond its original geography and take the name with it.
Geographical names are imbued with the character and history of their location, after all, and can be integral to a brand’s story.
But, more often than not, names like these limit a brand’s scope and credibility. It’s difficult to create brand positioning as a national or international company if your name suggests that you specialize in regional offerings.
As your company grows, a broader name allows you to connect more deeply with new customers in new markets.
7. Your Business is Named After Its Founder
While there are plenty of large, successful brands named after their founders—Ben & Jerry’s, Martha Stewart, Ralph Lauren, to name a few—the founder naming type is not without its challenges, especially for smaller companies looking to break into the big leagues.
Founder names can often be difficult to pronounce and/or spell. They’re inherently limiting, and sometimes sticky politically, as new partners are brought on to the business.
Perhaps most importantly, there is nothing intrinsic to a founder’s name that is associated with the business or the value it offers its customers.
It takes a lot of marketing spend to turn what was once a run-of-the-mill surname like Ford or Kellogg into the brands they are today.
8. Your Business Name is an Acronym
Ahh, the dreaded acronym. While functional and utilitarian, acronymic naming types are even more lacking in meaning and emotion than founder names.
One can always point to the success of brands like IBM, BP, and UPS to make a case for a series of unrelated uppercase letters as a brand name, but these companies are the exception, not the rule.
Acronyms are notoriously difficult for customers to remember and even harder for attorneys to trademark. For these reasons and more, you would never think to use an acronym as the new name for your company.
The simple fact is, any business with an acronym as a name, is not as engaging, memorable, or differentiated as it could be with an evocative name. That should be reason enough to change a business name.
Companies that Changed Their Names
Most of the brands you know and love we’re at some point called something else. Why do companies change their name? For many of the same reasons we’ve listed above. Whether it’s confusion, lack of differentiation, or geographical expansion, there’s no shortage of reasons to the world’s biggest brands often change their names.
Facebook | Meta
Hot on the heels of a whistleblower document leak that led to fiery congressional hearings, the world’s most ubiquitous social media brand announced they’d be changing the name of their parent brand to Meta.
Whether the shift was in response to the brand’s mounting PR issues or merely, as the company’s leadership claimed, happened to coincide with it, Facebook—err Meta’s—ostensible reason for rebranding was its mission to pioneer the next generation of the internet: the metaverse.
Time will tell as to whether Meta’s rename will be revolutionary or regrettable, but one can be sure the company spent a lot of time and money putting the idea to the test before launching it into the world.
BackRub | Google
Back in 1996, the world’s number one search engine was created under the name “BackRub.” Thankfully, creators Larry Page and Serge Brin had the foresight to rename their business, or we’d all be “backrubbing” directions and recipes.
Google, of course, is a play on the word ‘googol,’ a mathematical term for the number represented by the numeral 1 followed by 100 zeros.
According to Google, the term reflects their mission to organize a seemingly infinite amount of information on the web.
Relentless | Amazon
Rocketman Jeff Bezos’s signature brand wasn’t always called Amazon. One of its early names was Relentless.
To this day, relentless.com still redirects to Amazon. Bezos eventually realized that Relentless was a little too…intense for its brand personality.
As the largest river on earth, Amazon was chosen to reflect the vast scale of the brand’s offerings. It turned out to be fitting, as the global behemoth is still growing larger today.
Sound of Music | Best Buy
Founded in 1966, Sound of Music was an electronics store specializing in high fidelity stereos.
After being hit by a tornado in 1981, the company’s largest store held a four-day sale of damaged and excess stock in its parking lot.
Promising “best buys” on everything in the lot, Sound of Music made more money during the sale than it did in a typical month. The company changed its name two years later.
Tokyo Tsushin Kogyo | Sony
In 1946, a radio repair shop called Tokyo Tsushin Kogyo went on to create Japan’s first transistor radio in 1955 and the first transistor television in the world five years after that.
Amidst its growing success, the founders of Tokyo Tsushin Kogyo wanted to find a name Americans could easily pronounce. They landed on Sony, a combination of the Latin word for sound, sonus, and the American diminutive “sonny.”
Jerry’s Guide to the World Wide Web | Yahoo
Fellow PhD students at Stanford, Jerry Yang and David Filo co-founded a website that would go on to become one of the largest search engines in the world.
Its humble beginnings, however, were accompanied by an equally humble name. Jerry’s Guide to the World Wide Web was eventually changed to Yahoo, which stands for “Yet Another Hierarchical Officious Oracle.”
What’s in a name? Plenty. That’s why embarking on a business name change is no small thing.
There’s no shortage of reasons you should rename your company, some better than others. And if you do decide to change your name, you’ve got an exciting—if sometimes arduous—journey ahead.
It’s well worth the effort, though. When the time is right, and the resources are in place, nothing can reinvigorate a flagging brand quite like a new name. Just remember to keep an open mind and trust the process.
Editor’s Note: This post was originally published in June 2018 and has been updated with additional insights.