Asking the Right Question Might Change Branding Decisions

I have talked to a number of companies recently that might be candidates for changing their company names to get rid of the baggage of past problems and start anew. The reason these companies give for not changing is that research found that their corporate names had a lot of awareness and they felt it would be difficult to duplicate that awareness with a new name.

Bernie Madoff's name has a lot of awareness, but I would not want to launch the Bernie Madoff School of Management. We need to understand not only awareness, but also the attributes and associations that are imbued in the name that have become so crystalized that we cannot change them.

I lived through an example of bad research that lead to bad branding decisions. Before I arrived at Nortel, the name of the company had been Northern Telecom. Prior to my arrival, the company decided to change its name to Nortel to modernize it and because too many customers around the world thought the company was a telecom service provider rather than an infrastructure developer. The branding firm did research and asked customers whether it was clear to them that Nortel was the same as Northern Telecom (Nortel was the stock market notation for the company). About 50% recognized the connection. The brand firm went on to develop a new name (Nortel) and logo that completely dropped the Northern Telecom name.

When I arrived I started asking questions about the research. Think about it--50% did not recognize the connection, and this was with aided research. That means that a vast majority did not recognize the name Nortel unaided. One would likely only do this if one were trying to distance the company from past problems, which we did not have. It made no sense. The only way to build the brand and its connection to the past was to invest tens of millions in advertising, which we likely could not afford to do. So, I had the logo changed with a lock-up of Northern Telecom written below the Nortel, to bring the past equity to the new logo and name. This was bad brand strategy based upon bad research. We needed the name Northern Telecom during our transition.

Some companies could use a clean break from the past (think Altria, which became the parent name for Philip Morris; or Airtran, which had been Value Jet). These were names that were changed to give the company a new lease on life--not to bury the past, since all things are transparent, but to allow the company to build new attributes and associations and not be saddled with so much baggage its messages cannot break through all the noise. There are many such companies that are living with tremendous baggage (e.g., AIG).

Ask good questions and you will get good answers. Ask bad questions and you might end up making some terrible brand decisions.