How to Change Your Business Name Successfully
Remember when Nissan
was called Datsun?
Nevertheless, companies do change their names for various reasons—sometimes successfully, as with Nissan and Datsun, and sometimes not so successfully. In this tutorial, we’ll look at some of the reasons why you might want to change the name of your business, and go through the steps you need to take to ensure the switch is a success.
You’ll see examples of real-life business name changes and their rationales, learn the legal and regulatory steps you need to take when changing a name, get advice on communicating the change to your customers, and see how to launch the new brand. By the end, you’ll be clear on whether you need to change your business’s name, and how to do it well.
Step 1: When to Change Your Name
Rebranding is a big step, and not something to be done lightly. But there are some specific circumstances in which a name change makes perfect sense. We’re going to look at some famous examples, but the principles apply to small firms as well as large ones.
Change of Ownership
Mergers and acquisitions are very common reasons for corporate name changes. When two companies merge, the managers of the new firm have to decide which name to use. A frequent choice is to combine the two previous names into a new one.
Consulting firm PwC, for example, got its name from the 1998 merger between Price Waterhouse and Coopers & Lybrand. The new firm was called PricewaterhouseCoopers, or PwC for short.
Changes can also occur when companies split. PwC’s competitor Accenture used to be known as Andersen Consulting until it split from accounting firm Arthur Andersen in 2001. The two separate companies couldn’t both use the name Andersen, so the consulting firm rebranded itself as Accenture, a made-up name derived from “accent on the future.”
If your company pivots in a new direction, it makes sense to have the name change too. The Haloid Company had been in business for more than half a century, but was known mostly for selling photographic paper. Then in 1959, it hit on a new invention, the Xerox photocopier, which proved so popular that it soon accounted for the majority of the company’s revenue. It made sense for Haloid to change its name to reflect the new direction of its business, and so Xerox Corporation was born in 1961. More recently, Research In Motion also took the name of its most popular product, BlackBerry.
We recently interviewed Layla Foord, General Manager of Envato Studio, about the decision to change their name from Microlancer. She said it was driven by a new direction for the business, and she didn’t want the company’s growth potential to be limited by a name that didn’t quite fit any more.
Sometimes companies change their names to escape from negative associations that their old name has acquired.
Private security firm Blackwater got a lot of unwanted attention over a 2007 shooting that left 17 unarmed Iraqi civilians dead, and two years later changed its name to the more innocuous-sounding Xe. Then in 2011, it was rebranded again, as Academi.
Cigarette firm Phillip Morris changed the name of its parent company to Altria in 2001, with executives saying the point was “to reduce the drag on the company's reputation that association with the world's most famous cigarette maker has caused.”
In some cases, there’s nothing wrong with the old name, but you might just feel that it needs freshening up or modernizing. Accenture, with its “accent on the future,” is a good example. A more recent one is consulting firm Booz & Co being renamed “Strategy&” after being bought by PwC.
This can be a good tactic, but it doesn’t always work out. PwC Consulting was briefly renamed “Monday” in 2002. The company thought Monday symbolized optimism and fresh thinking, but it turned out that Monday had different associations for many people, and the name only survived a few months.
Step 2: Practical Steps
So if you’ve got a good reason for changing your name, and have followed all the steps in the other tutorials in this series to ensure that the new name is as strong as it can be, how do you actually go about making the change?
A few things need to happen. These are the steps to follow for US companies; in other countries, some of the steps will apply, but others will be different.
Update Your Articles of Incorporation
If you’re a sole proprietor, you can skip this step, but if you’ve formed a partnership, corporation or other legal structure, you’ll need to notify your local Secretary of State to change the name on your articles of incorporation. You can usually do this online.
File a New “Doing Business As” Name
Sometimes the official name of your company is different from the name you plan to use on a day-to-day basis. If that’s the case, you’ll need to file a “Doing Business As” Name with your local government. You can read more about this at the Small Business Administration website.
Update Your Bank Account
Your business bank account needs to reflect your new name, so contact your bank to find out the steps involved. The same applies to business credit cards and any other financial accounts.
Update Business Licenses and Permits
When you set up your business, you probably needed certain business licenses and permits from your local state, county or city government. You’ll need to get all those permits updated with the new name.
Tell the Tax Authorities
The IRS has a helpful page telling you which forms you need to fill out to notify them of a change of business name (they’re different forms, depending on your legal structure). Don’t forget to update your state and local tax authorities too.
We’re not just talking about the letterhead. You’ll need to go back over your important contracts, loan agreements and so on, updating them to reflect your new name.
We’ll talk more about communicating the change in the next step, but on a practical level you’ll need to update all your marketing brochures, your website, business cards and other marketing collateral to reflect the new brand. Timing is important here, as we’ll see.
All the Little Things
You’d be surprised just how many things have your business name on them. You’ll need to be completely consistent, so make sure everything is updated, from the checks you write to the novelty pens you give out to clients. Here’s a useful checklist put together by the Center for Productivity based on its own experience of two name changes.
Step 3: Communicating the Change
How you communicate the name change can make the difference between a smooth transition and a disaster. In this step, we’ll look at how you can make things as smooth as possible.
Start with Employees
If your business has employees, it’s important to talk to them as soon as possible and make sure they fully accept the new name. After all, many of them are going to be talking to customers, and you want them to be enthusiastic about the new name, not apathetic or, worse, embarrassed.
Ideally, get your employees involved even at the stage of choosing the new name. You could have a contest where people suggest new names, giving the double benefit of coming up with more ideas and making your employees feel involved in the change.
If you’ve already picked the new name yourself, you’ll need to go a lot further than just sending out an email announcing it. Hold meetings, talk face to face, and really explain the rationale behind the change. People need to understand where it’s coming from, and why it’s important. Give them a chance to ask questions and get comfortable with the new name.
Have a Plan
Just after you’ve spoken with your employees, you’ll want to announce the name change publicly. This should be well in advance of the actual switchover, to give customers a chance to get used to the new name, and to allow word to spread before the change takes place.
Draw up a clear communication plan, and use as many channels as possible. Write to existing customers if you have their contact details and permission, use social media, take out advertisements, send press releases to local newspapers, and so on. The more you can get the new name out there, the better. As with employees, explain the rationale, but in this case you’ll need to do it in a quick, snappy way. Think slogan rather than essay.
One of the biggest mistakes in rebranding is not communicating enough. The UK’s postal service, Royal Mail, spent millions on a disastrous rebranding in 2001, changing its name to Consignia before abandoning the name just a year later amid customer confusion and union boycotts. Part of the problem with the new name was a failure to communicate the reason behind the new brand.
“We thought ‘what would be the point of advertising if all you would be saying is this name change is happening which is not going to affect you?’” branding consultant Keith Wells told BBC News.
So even if you think the name change won’t affect anyone, be sure to communicate it very clearly. You may spend a lot on advertising, but it will have publicity benefits beyond the name change itself.
Step 4: Launching the New Brand
The new brand launch, if handled right, can be a chance to make a splash. News outlets may pick up on the change, and you can consider holding special events for customers to mark the launch, all of which will both bring your company publicity and cement the new name in people’s minds.
As you’ve seen, there’s a lot involved in changing a business name. But all that work should be done completely behind the scenes. Get all your marketing materials and documentation prepared in advance, get your website redesigned to reflect the new brand, get everything ready to go, but don’t release any of it until launch day.
Try to minimize any impact on your customers. If you’re moving to a new website, make sure everything redirects from old to new—not just the front page, but also the individual pages within the site that people may be accustomed to using. You should be able to rename most social media accounts and continue using your existing email list, but if you need customers to take any action, tell them a long way in advance, and send reminders.
There should be a single day where everything happens at once. No crossover, no period of confusion and inconsistency where people are seeing different brands in different places. Just pick a date, and switch everything over on that day. Make sure employees are fully briefed, too, so that they are ready to use the new name when they’re writing emails, answering the phone or talking to clients.
This doesn’t mean you can’t mention the old name at all. It’s fine to have a transition period where you tell clients “We used to be called X, but now we’re called Y.” The point is to give a consistent message in all your communications, and avoid any confusion over which name people should be using. If you’ve done it right, and planned carefully, the transition should be seamless for both employees and customers.
Step 5: Putting it Together
You’re now in a good position to change your business’s name. You’ve seen some good reasons for making the change, and some examples of successful corporate rebranding (and, in a couple of cases, not so successful). You’ve learned the practical steps you need to take, from updating your bank account to notifying your Secretary of State. You’ve learned how to communicate the change both internally and externally, and how to launch the new brand.
A big factor in the success of a name change, of course, is picking a good name to switch to. And when you’ve picked a good name business name, you’ll need to decide whether to protect it with a trademark. So if you haven’t already read them, be sure to check out the first two tutorials in this series on naming a business.