Brand equity is built over time, and as a result, it frequently comes up as a reason NOT to re-name a company. While the value of the current name should absolutely be a factor in any re-naming decision, it should not BE the decision.Name changes can be hard. There are the physical implications of a name change - much will need to be updated to make sure that the transition is complete - but there are also emotional challenges. This is worth discussing head-on - because often attachment to a name gets misclassified as a conversation about "brand equity."
As humans, we grow attached to the things we have in our possession. Several interesting studies have shown that we over-value things just because they are ours. This is called the "endowment effect," and it holds true for names, too. People don't often come to re-naming projects of their own accord. Most often, re-naming projects are necessary "evils" - the result of an issue with trademark infringement that was discovered after years in business, or because of a business event like a merger or acquisition.
We commonly hear something like "We want to keep X name - it has brand equity" or "Could we include the old name in the new name? Like "NewName by OldName"?"
We know that we must tread carefully, here. Obviously, as branding professionals, we do believe that brands and names are very important - so OF COURSE we believe in brand equity. We know that it's something that takes a long time to build, and it's a precious asset. But sometimes, a name is actually a limiting factor - it's holding the brand back - and it's up to us to diplomatically convey the following information:
Brand equity IS NOT "we have some customers who know us by this name."
Brand equity IS NOT "we've been using this name for a long time, so it must mean something."
Brand equity IS the impact that a brand has on consumer purchases or perceptions about a product. It's about what THEY think - not about what YOU think.
A name that wasn't great to begin with doesn't get better over time. Sure, maybe there's SOME equity in it... but could you do better? Ask your sales and marketing team - they may feel like they've been pushing a brand boulder up hill for years, now. Ask yourself - if you were starting this company today, would THIS be the name you'd choose?
If the answer is "no, probably not," you owe it to yourself and your company to at least entertain the notion that a new name could be beneficial. Be honest with yourself about the value of your brand - it can be tricky, but there are ways to measure brand equity - and it's not just gut feelings held by an executive team.
While it's never going to be super fun to make the transition if physical products are involved, it has become simpler to execute on a name change in the digital world, at least from an external communications standpoint. You will need to redirect from one domain to another, add a message explaining why you've made the shift, and send out a communication to your customers (and perhaps a press release, if warranted). It's often easiest to craft this messaging if there's a precipitating event, such as a merger or acquisition - but with good planning and a good story to tell about the new name, a change can be executed at any time.
It may feel scary, but sometimes it's necessary to take one step backward in order to move forward in a big way.
*If all of this has you thinking that a naming project might be in your future, here's a pretty comprehensive guide to how you might tackle it, ranging from DIY to hiring a fancy-schmancy naming firm - including the pros, cons, costs, and resources associated with each approach.