Why Is A Good Name Important to a Company?

Names are one of the most important assets of a business because they are a container of its value as it grows – its brand equity.

Take the time to learn more about what’s involved when you’re creating an identity for your business because names play a central role to your business protection too. 

The first element of your brand identity to focus on is the name. While a logo is also an important component of your brand identity, you should separate the two steps. That’s because the help you need when you’re picking a name is quite different to the help you need when you’re having a logo designed for your business. For example, checking that you may lay claim to a name is something a trade mark lawyer who ‘gets’ branding is most suited to helping with.

Then once you have a good name and have worked out what you’re aiming to achieve with your business, you’ll be ready to get a designer to help you to create a fantastic visual identity.

Names you pick for your business go to the very root of your identity and ability to be known for your brand promise. So, choose a name with extra care, and be very mindful of the legalities around them.

The right to use a name does not come from domain or company registration but from trade marks.

Basic Principles

The basic principle when naming a brand is to signify something about who you are or what you do without blatantly describing it. What is your business idea and vision? Start there before brainstorming name ideas.  There’s a great book on naming: Brand New Name which is being released in October. I highly recommend it if you’re looking for a book to guide you.

This piece is designed to give some general explanations about names to those in the very early stages of a business, or new product. You may possibly be at proof of concept stage.

For start-ups and early stage businesses I’d suggest going with a temporary name while you work on the final name you will eventually use once the concept is proved. As trade mark clearance and registration adds to your start up costs, save yourself the money and just hold back the real name you ultimately intend to use till the concept is proven. 

Planning your Project

The starting point for coming up with a good name is to be clear about your business idea.

• What is the business aiming to do? What does success look like? In other words, what is the business strategy for achieving success? This is big picture thinking not a tactical plan or even a set of goals.

Then think of your customers’ needs

·       What do they really need? What would make their lives better? When Steve Jobs conceived the first iPod, for example, he appreciated that people would benefit from having an ultra-portable device that could carry someone’s entire music library.

Then define the problem

• It helps if you can define exactly what the name needs to achieve or do. This is a challenge for a lot of businesses.  Framing is therefore important (that is, the mental window through which you will view the problem). Being able to write a concise and compelling problem statement really helps here.

Generate ideas

• Now comes the fun part! Once you’ve defined the requirements from the naming exercise you can begin to generate creative ideas about ways to solve it. Whatever technique you select for doing this, it’s important to try and generate as many ideas as possible and to defer judgement of what would work and what wouldn’t.

Design and test

• Once you’ve selected a number of names, done some initial checks on the names, and have a final shortlist of 3-6 names, then test out the names on end users and sort your list in priority order. Then send that list to your trade mark lawyer to research.

Create a brand story

• Once you have a name that’s cleared for use, craft a human story to inspire others about your business idea and the problems you solve. You could show how people’s lives have been made better if you have any case studies to draw from.

In the digital economy any name you choose will be used online, so it’s doubly important to pick one that does not already belong to someone else, and that helps your business to stand out and be unique in the crowded global environment of the internet. 

Descriptive names

Descriptive words are those that ‘say what your business does or is, rather than naming it. For example, if you were naming a dog and called it ‘dog’ that’s not a name, it’s a description. On the other hand, Jasper or Charlie are names. That’s at its most simplistic.

There is a place for descriptive names, and in my view that’s when you’re simply testing the concept in the market.

What you don’t want to do, is to test the market with a name that could infringe on somebody’s rights or use a name that you love and have painstakingly identified. If you haven’t yet protected it then hold that name back for later. Instead choosing a descriptive name keeps you out of trouble during proof of concept stage and reduces the start up costs involved in trialling the concept.

Identifying Non-Descriptive names

So, how do you choose a non-descriptive, good name for your business once you’re ready to use and protect your desired name?

Apart from proper names like Dell, Disney, and so on, there are names that are suggestive, such as Toys’R’Us without being blatantly descriptive and those are excellent, and desirable business names. It’s just not easy to come up with good names. Invented names like Google are excellent choices, as are names like Amazon or Apple which don’t describe the business but perhaps communicate something about the aspirations of the business or what it stands for.

Legal Availability and Protectability

When it comes to brand names your name can’t be the same as any of your competitors’ names. Consumers must be able to find the products and services they want to buy without being confused by similar named brands.

Therefore, to have a unique identity involves finding a name rather than a description, and one that nobody in your industry is already using. If you pick something similar to what some other businesses in your space are using, then there is a likelihood of confusion, and trade mark problems.

It’s essential to have a name that is available, unique and capable of being protected with a trade mark.

The law will not help anyone to monopolise a descriptive, generic term. So, steer clear of anything blatantly descriptive. For example, if you are a brand strategy expert don’t expect to give yourself a name like ‘brand strategy guru’ and be uniquely identified by such a name. Other brand strategy experts may legitimately also call themselves a guru to describe or advertise their services.  There will be confusion but because the law won’t allow you to monopolise a descriptive name there is nothing you can realistically do to stop them

We live in an economy that encourages competition and therefore no single business may reserve a descriptive term for itself. That is why trade marks are designed to enable businesses to uniquely identify themselves with a name that only they may use. 

Choosing descriptive names is setting yourself up for confusion with competitors. As it’s not possible to stop competitors using the same descriptive names, choosing a descriptive business name inevitably means loss of potential customers and revenues.

Descriptive names are poor vehicles for capturing goodwill or brand value.  Yet many internet businesses choose such names because there is a tradition of descriptive names on the web.

The Internet Tradition of Descriptive Keywords

When the internet was new, and there were few sites up and running, a common, generic name was considered an advantage. If you wanted to look for a site selling toys, you typed in “toys.com”. The internet was like an old-fashioned grocery store. Whatever you wanted you looked for by its name. So, a common, descriptive name was the most direct way to communicate what the site was all about. However, any advantages these descriptive names had, immediately disappeared once the numbers of websites grew.

From a branding point of view those businesses were misguided in calling themselves names such as Wines.com, Pets.com, Mortgage.com, Books.com.

Built for success

The name is a key determinant of every business’s potential success. You do far better in the long run with a distinctive business name.

A bricks and mortar business with a descriptive name might just manage to get by and be memorable offline because, a shop called ‘Books’ say, will stand out to someone driving past. They may notice the bookshop for reasons other than its name. The shop may stand out and therefore be noticeable due to its striking window dressing, or by virtue of its signage, or location.

However, on the internet, there are no shop signs or geographic areas to attract passing traffic. When your business uses a name like Books4Less.com or Business.com you get lost among a sea of similar names.

Many of the early internet businesses using the common types of domain name failed despite enjoying serious venture capital backing. They secured millions in funding and yet they’ve mostly faded into oblivion. This isn’t surprising to anyone who understands the need for distinctive names to build brand equity and stand out.

All those businesses left behind are valuable domain names that may have changed hands several times by now and are principally valuable for search purposes. For example, books.com redirects to Noble & Barnes bringing extra traffic to that site.

Don’t confuse search engine visibility with business naming. You can get visibility in the search engines without needing to use a descriptive name.

Conclusion

In conclusion, in the short term when you’re starting out a descriptive name will help you to communicate what your business is all about. For example, if you are called Books4Less, people will immediately know something about your aims. So, such terms are great for a temporary period while you’re testing your proof of concept. But change to a proper brand name as soon as you know that the business is viable.