We live in an era of constant change. Especially when it comes to the names of companies we love and thought we knew. And most of us don't seem to like it when our favorite companies change their names.

Last year, Verizon created Oath, a division to house its two high-profile subsidiaries, AOL and Yahoo. (I was completely confused when confronted with Oath's new privacy policy--for a moment I thought the company had been bought by a faith-based organization.)

This year we've seen Jo-Ann Fabrics rename itself Joann, Weight Watchers rename itself WW, and Dunkin' Donuts become just Dunkin'. And then there have been temporary--and usually silly--name changes, such as when IHOP briefly rebranded itself as IHOB or when the town of Mayo, Florida briefly renamed itself Miracle Whip for an advertising campaign with Kraft Heinz.

All these temporary and permanent name changes have one thing in common--most people don't like them. They may just not think much of them either way, as seems to have happened with the Dunkin' rebrand, or they may be seriously hostile, as with WW. But absolutely no one is saying, "Yippy! This brand I've known for years has a whole new name! That'll make my life so much better."

It turns out there's a reason for that, according to Jake McKenzie, CEO of Intermark Group, an ad agency that bases its work on psychology. He says we react negatively to new names for long-established brands because those new names force our brains to work extra hard. "Our brain really dislikes changing anything stored in long-term memory," he explains. "Simply adding something new in long-term memory is already a cognitive chore. Changing an established memory, like a brand name, is dramatically more difficult."

Too much of a load.

Part of the problem is "cognitive load"--the amount of work our brains have to do every day, even with no name changes from familiar brands. Our brains are constantly looking for ways to cut down on the load, and one way we do that is to ignore information that seems to conflict with what we already know. That helps explain confirmation bias, the tendency to disregard information that conflicts with information we already think we know.

It also explains why, once we learn the name of something or someone, we tend to keep using it even after a name change, sometimes for a very long time. The best example of this I know is the avenue that runs between 5th and 7th Avenues in Manhattan. In 1945, it was officially renamed "Avenue of the Americas." The signs that said "6th Avenue" were taken down and replaced with the new name. That happened years before I was born, but like most New Yorkers, I grew up calling it "6th Avenue" all the same. As you can imagine, this caused a lot of confusion for visitors from out of town. Sometime in the 1990s, New York City gave up the fight and put up signs that say "6th Avenue" along with the ones that say "Avenue of the Americas." Even after 50 years, the original name still superseded the new one.

Consumers resent change.

To make matters worse, when our brains are forced to adapt to a new name, for example because our email company changed its name, we tend to resent the company that made us do it, McKenzie says. "We do so begrudgingly, often generating negative feelings about the entity that is asking us to make the change," he says. "It's one of the major reasons that after a brand names a venue, such as an amphitheater or stadium, the value for naming rights drop for that venue up to 75 percent for any subsequent names. Consumers and their brains simply don't want to learn a new name." Living near what I still call the ​Xfinity Arena, even though the sign over the door now says "Angel of the Winds Arena," I take his point. 

Changing your organization's name can cost you a lot of revenues, at least if you're a nonprofit. Jeff Brooks, fundraising professional, author, and blogger writes that he's often seen revenues decrease 25 to 50 percent after a name change. He notes that changing a nonprofit's name has the worst impact on revenues, followed by changing its cause identification (usually widening it and making it more vague, say from "feeding the hungry" to "providing hope"). That can lower revenues 20 to 30 percent. Changing things like color schemes and fonts might have a small negative impact, and changing a logo will usually have no impact at all, he writes.

Interestingly, he notes, from his experience you can only hurt your revenues by making these changes, not help them.

"You may have noticed that the best outcome here is revenue-neutral, and it goes downhill from there. Given that the whole point of rebranding is to improve revenue (at least it should be), I have to conclude one thing: The branding discipline doesn't work for nonprofits. At least the way it is commonly practiced."

But maybe it doesn't work for any company. Because on top of whatever negative effect companies create by changing their names, doing so isn't really necessary. Most often, companies change their names, as the former Dunkin' Donuts and the former Weight Watchers did, to avoid association with a single product when they want to offer much more. But as we become familiar with company names and store them in our long-term memory, we stop thinking about their literal meanings, McKenzie explains. Coca-Cola is so named because its original recipe combined cocaine and kola nuts. Today, although the Coke recipe is a closely guarded secret, you can be fairly certain that there are neither kola nuts nor cocaine in it, yet the company has never felt the need to change its name or that of its signature beverage. Nobody cares. It remains a powerful and instantly recognizable brand. 

But if you absolutely must change the name of your company, McKenzie has this advice: Keep the most recognizable part of your original name. Changing from Starbucks Coffee to simply Starbucks doesn't seem to have generated much negative feeling. Neither did changing from Apple Computer to Apple. And no one seems all that upset about Dunkin' Donuts becoming just Dunkin'. So that's probably smart advice.

Published on: Sep 29, 2018
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