What?s in a name?

In recent weeks, there has been a flurry of corporate name changes in the U.S. ARM industry and more are on their way.  Why all the fuss? Why now?

A name change is not typically a knee-jerk reaction.  A name is a large part of a corporation’s identity and even the smallest business brands its products and services through its name.

The process of a name change is costly and time consuming for sure.  After a decision is made to change the name and one is finally chosen, diligence is conducted to make sure some version of the name does not already exist.  Focus groups are sometimes formed to see if the name will strike a chord. From there, the effort and cost involved in letting the world know about it is not insignificant.  The hard costs in overhauling marketing materials, redoing corporate websites and stationery alone could be in the thousands. Then there’s the distribution of press releases and making sure the name is optimized online through search engines and social media.  This is not an exhaustive list. Professionals get paid a lot of money to market a brand.  My point is that getting the word out and explaining a name change to a market is expensive and time consuming. Nothing is taken lightly.  

Executive teams spend their time, go through painstaking effort, and incur substantial expense to change their corporate identity for myriad reasons.  For example, it might be an effort to stand out. Corporations sometimes change their name brand when they merge or buy another business.  Sometimes an owner wants to reposition the company before a sale.  Other times a name change is prompted because of bad press (the crash in the Everglades prompted Valuejet to become AirTran).  More typically, a name change is the result of an expansion effort being made into a new market segment where the old name may not hold the same value or to give meaning around a new product launch.

So why have many ARM executives recently chosen to rebrand their companies?  Although the specific reasons vary, it’s more than likely that a name change indicates other significant changes underway at the company.  Pay attention to the changes you’re hearing about.  Ask questions. Find out why. Name changes happen for a reason and they don’t come cheap.  You might learn some things that you were unaware of.