There's no telling what entrepreneurs will do when they get bored: rearrange the office furniture, start planning next year's management retreat, or create an entirely new identity for their company.
John Marchica, founder and CEO of FaxWatch, in Scottsdale, Ariz., was growing tired of his company's marketing approach, from its logo to its sales brochures. "I wasn't excited anymore about the things we were saying," he says. "The Web site was dull, and the message in our marketing materials wasn't compelling."
But as Marchica interviewed branding agencies to help him update what he calls the company's "look and feel," it became apparent that the company's very name -- with its focus on just one small segment of what the business did -- was becoming a liability.
FaxWatch had started in 1994 as an information-by-fax service for the pharmaceutical and biotech industries. The company began by faxing trend briefings to customers, but Marchica soon realized that E-mail and the Internet could supplement, and in many cases replace, his company's eponymous delivery mode.
So he added digital delivery to the list of FaxWatch's services. But even among those customers who traded up to E-mail, there remained the perception that FaxWatch was essentially fax based. And as the company expanded into offering such services as developing content for corporate intranets and newsletters, the FaxWatch name began to lose the company some potential revenues. "Customers didn't even think to call us to provide content for intranets because it wasn't part of our name," Marchica says.
In the fall of 2001, Marchica hired Six Degrees, a local brand-development firm, to guide his company through a complete repositioning -- though the process made Marchica as apprehensive as hell. And for good reason. "If you talk to any marketer in biotech, they know our name," he says. "That's a lot of brand equity. But I was terrified we were going to become 'John's Buggy Whip Manufacturer.' I didn't want us to be known as the company that couldn't make the change."
According to Six Degrees' CEO, Frank Schab, Marchica's fears about changing his company's name are not unusual. "John showed the classic pattern of ambivalence," says Schab. "Part of him was excited about the possibilities, and part of him dreaded the process." Schab says that in addition to the very real fear of losing some of the brand equity they've worked so hard to build, entrepreneurs faced with a corporate name change often feel a threat to their very person. "It [the business] is their baby," says Schab, "and it helps them define who they are. In changing the name of their company, you're basically asking them to change themselves."
Marchica decided that he wanted to handle the generation of new name possibilities himself. Finding appellations that hadn't already been taken was more difficult than it might seem: virtually any moniker you could come up with these days has probably already been trademarked and its corresponding Internet URL snatched up.
Marchica began holding staff meetings to solicit ideas. According to FaxWatch vice-president and general manager Steve Nickerson, every employee contributed to the process. "From the writers to senior management, from the early brainstorming to the final selection, at some point everyone was giving input," he says. Marchica also discussed the naming issue with customers while he was on the road making sales calls. He compiled a list of about 1,000 potential names, which he eventually narrowed down to 10. That shortlist went to Marchica's lawyers so they could perform international trademark searches.
Among the names that Marchica came closest to selecting were Triple Helix (a play on the structure of DNA) and Stratamedica (connoting layers of medical information), but both of those had potential trademark-infringement issues. One of Marchica's favorite potential names was the quirky Grape Media. It appealed to him "because it was totally nonsensical," he says, and would thereby give the company greater flexibility to respond to changes in the marketplace.
For Marchica, the name game became an outright obsession. Although the entire process took a good six months, he says, there was a particularly intense period of six to eight weeks when it consumed his every waking moment, both in the office and at home. Finally, as he sat in a hotel room during one of his business trips, surfing the Net for the true meaning of a particular biochemical reaction to learn how that term might encapsulate everything his company did for its customers, he decided it was time to quit. "I realized the absurdity of how far I had gone," he says. "We were trying to force-fit something onto this thing that already had a life of its own."
The more Marchica thought about new corporate monikers, the more he felt that their drawbacks might outweigh the benefits. As he spent time on the road talking to customers and people in the industry, he found an increased prejudice against the unknown. "In times of economic uncertainty, people tend to retreat to the familiar," he says. "The typical comment was 'I have 200 vendors calling on me with every possible iteration of health or med in their names. They all sound alike. But we know you and what you're all about. Why would you want to become someone else?"
Marchica concluded that it was the wrong time to make any drastic changes. So instead, Schab and his staff experimented with design possibilities and ended up with the idea of basing the company's logo around the initials FWI (for "FaxWatch Inc."). Simple though it was, Marchica liked the idea of making a transition from FaxWatch to FWI. So as of May, FaxWatch became FWI FaxWatch Inc. Marchica plans to drop the "FaxWatch Inc." part over the course of the next 18 months.
So much time and effort, only to end up close to where he started? Marchica doesn't see it that way. Sure, he's out some $200,000 in fees to Six Degrees for design work and for overseeing the repositioning process, not to mention $20,000 in legal costs. But, he says, he isn't the least bit disappointed. In fact, he's thrilled. "The process itself, although emotionally draining and certainly distracting, raised the company's consciousness about who we are and what we stand for," he says.
And that's more than just a bunch of branding-speak. In querying people about how they perceived FaxWatch, Marchica and company unearthed a lot of confusion -- both within the company and without -- about what FaxWatch really did. "Some customers saw us as an information provider, but others saw us as more of a provider of brand-building tools," Marchica says.
FaxWatch professes to provide unbiased information about the biotech and pharmaceutical industries, but customers often mistakenly expected FaxWatch to use its publications to push their products. That, in turn, led to a constant battle between the sales and writing staff. Schab counseled Marchica to make sure that people at all levels of the organization, from the receptionist to the sales reps to the senior management, could articulate very quickly what services the company actually did provide and how the new name reflected that. "It's a huge opportunity to gain additional traction with customers," says Schab.
Marchica says he's already seeing the results of that increased traction. Sales for the last quarter of 2001 were up 35% over the same period the previous year, surpassing a projected increase of 20%, which Marchica considers outstanding considering that his sales reps were grounded for weeks after September 11. He attributes the increase to the closer relationships he developed with customers during the inquiry process. In fact, he says that he saw an even bigger return on that $200,000 investment this past summer.
But beyond the monetary considerations, Marchica's renaming ordeal has also proved emotionally cathartic. "I think of this as a renewal for me as well," he says. "I feel totally reenergized. I was coming through the door every day and not getting very excited."
What's more, Marchica feels that the newly minted FWI is a more accurate reflection of everyone in the company. "The new name isn't just something we created," he says. "This really reflects who we are, and I feel great about that."
Christopher Caggiano is a senior associate editor at Inc.
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