Some firms change their names to signal a change in their company and brand, while others change their names as a response to a crisis situation. The latter is the case with SAC Capital, which announced on Tuesday that as of April 7th 2014, it will be known as Point72.
After being in a very public spotlight for several years, SAC Capital and the founder, Steven A. Cohen, clearly want to distance themselves from the scandal. In this instance, the hedge fund decided to change its name in an attempt to restore its own reputation. But sometimes crises are caused by forces outside a firm’s control: Intel, says CNN Money, is changing the name of “its top security product, McAfee, after years of having its name dragged through the mud thanks to the misadventures of its founder, John McAfee,” who left the company twenty years ago. And we’re currently working with a financial services firm whose name has also recently come into the public lexicon for reasons that have nothing to do with the firm. Our client was hesitant, though, to change its name, and for good reason: (to name just a few obstacles) between getting internal and external buy-in, obtaining legal approval, updating contracts and licenses, changing signage and collateral, the endeavor is costly, drawn-out, exhausting, and for many companies, hurts them more than it helps.
Not that it’s always a bad idea. Howard Breindel weighed in on the challenges and opportunities a name change represents: “There are right reasons to change your name, and there are wrong ones. A company that wants to rebrand with a new name should do so to embrace a positive change within the firm, and not to run away from something.” For example, in 1996, USAir changed its name to US Airways in order to present itself as a major airline. According to the New York Times reporting at the time, “USAir sounds like too many small carriers . . . rather than all the major players that use ‘airlines’ or ‘airways’ in their names.” This name change signaled their entrance into the big leagues.
Names also change if there is a change of ownership, merger, or acquisition: first there was Coopers & Lybrand and Price Waterhouse, then there was PricewaterhouseCoopers (and now there’s just PwC). Sometimes, there’s more equity in a product brand than in its corporate parent (in 2005, Matsushita adopted its most popular brand’s name as its corporate name: Panasonic). Others change their name in order to encompass a growing service or product line (Computing Tabulating Recording Corporation became International Business Machines – better known as IBM – in 1924).
No company ever takes the decision to change its name lightly, no matter the reason: names are often the first touch point that prospects encounter, the first chance at making a striking impression. Companies must first carefully consider the reasoning behind a potential name change, and make sure the benefits outweigh the potential costs associated with the change. Either way, to be effective, a company’s name must align with its brand, reflecting both its purpose and its values.
A few months ago, we asked “What’s in a name change?” SAC Capital, hoping to distance itself from scandal, had just become Point72, prompting discussion of what circumstances make a name change advisable. So when we noticed the revival of a familiar-sounding Andersen Tax, we were immediately intrigued. You may remember the name…
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