The Need for Change
I’m currently advising a couple of future-minded companies on changing their names. Both of these organizations have outgrown their original monikers and need new titles to be effective long term.
They operate in completely different service areas, but their current titles suffer from a common flaw – an over emphasis on what they do and where they do it.
What & Where names – titles that state what you do and where you do it - are very common. But putting industry and geographic references into a name give it a very limited shelf life. In fact one of the companies that needs a new title is less than five years old.
A Naming Approach from Decades Past
What & Where names may have been effective in decades past, but not today. Instant global exposure through the Internet renders geographic boundaries irrelevant in many sectors. Technology, industry dynamics and customer expectations change too quickly today for geographic-industry style names to endure for any length of time.
Outgrown Company Names
Companies with What & Where names are invariably destined to outgrow them. American Telephone & Telegraph outgrew its name. So did the Radio Corporation of America, Canadian Tire and countless others.
A Visionary Title for 1901
The Royal Bank of Canada is another example. Introduced as the visionary new title for the Merchants’ Bank of Halifax in 1901, the Royal Bank of Canada name positioned the company as far more substantial, upscale and sophisticated than its more parochial competitors such as the banks of Montreal, Toronto and Nova Scotia.
From Growth Asset to Liability
The Royal Bank of Canada name helped drive the growth of the company, making it the largest bank in the country. But in the 1990s as the Royal Bank cast its gaze southward to the U.S. in search of additional growth opportunities, the name ran out of gas. It was no longer a growth asset. The name became a liability.
Company leaders came to realize there were three problems with the name. The first was Royal. The second was Bank. The third was Canada.
Royal doesn’t play well in the States. More than 230 years after the fact, Americans are still miffed about taxation without representation and the Red Coat occupation. Bank comes across as a rather narrow transaction-focused term, especially in today’s market where the Royal Bank and similar organizations are involved in so many financial fields beyond traditional banking.
And when Americans see the word Canada, they think about hooligan hockey players and Arctic cold fronts sweeping down from the Great White North. There are no connotations of world-class financial institutions linked to the word Canada.
An Abbreviation Retreat
In order to appeal to its primary growth market, the company decided to jettison its century old title. It became an abbreviated shell of its former self, taking on the name RBC Financial Group.
In Canada the new moniker camouflaged the name’s appealing, historic meaning and required customers to reverse engineer an acronym to realize they were still dealing with the Royal Bank of Canada.
In the U.S. the name went from having a bad meaning to having no meaning at all. Coming across as just another random collection of letters that collided in a bowl of alphabet soup, the RBC label failed to plant any appealing or relevant message in the minds of customers.
The RBC name also created a new problem, poor differentiation. It left the company prone to constant confusion with other alphabet soup named entities like RBS (formerly the Royal Bank of Scotland) which is also pursuing a U.S. expansion plan.
When geographic-industry names hit their limitation points, they almost inevitably degrade into a meaningless collection of letters.
Steer Clear of Geographic-Industry Names
Unless you’re planning to play small and stay small in a market segment that is immune from cultural and technological change, avoid What & Where names.
Putting a geographic and industry reference into a name is a guaranteed recipe for future obsolescence.
Beware of What & Where names.