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Guest post by: Mark Levit Become an Author

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Selecting a name for a new product or company can be time consuming, subjective, and difficult. The best names stand out from competitors’ and enjoy strong recall. These days, the most effective names are “made up words,” such as Verizon and Accenture. Acronyms and initials, however, remain ever popular, as well. But with growing competition, acronyms and initials may not be the optimal solution for recall and brand differentiation.
Although initials and abbreviations may seem like a good idea, in most cases, they are not. Al Ries and Jack Trout, authors of Position: The Battle for your Mind, argue that lesser known companies tend to loose their identities when using initials. Customers are unclear about the types of businesses in which these companies are engaged. Thus, establishment of a brand identity is seldom achieved.
Many managers make the mistake of getting caught up in what marketing professionals refer to as the “alphabet approach.” In his article, Avoid the 10 Great Naming Blunders, Tom O’Neill emphasizes the major categories into which naming mistakes fall. The “alphabet approach” is high on the list. Acronyms may be short, but they often cause confusion between unrelated companies using acronyms or initials.
Not all organizations that use abbreviations are unsuccessful, however a substantial budget to support those brands is required. IBM, GE, GM, AT&T, and HP are already well known brands. By investing in their equity, complete name references become unnecessary. Nonetheless, some of these companies didn’t officially change their names. For example, IBM’s full name is International Business Machines. Its name clearly identified the company and its products before morphing into the IBM brand over the years. Executives initially referred to the company as IBM, as did journalists. Yet read about the company in the Wall Street Journal, and you’ll notice the company is referenced by its full name before the reporter moves on to refer to its abbreviation. The same applies for General Electric, General Motors, and Hewlett Packard. The development of strong brands has enabled them to refer to themselves by their initials, yet still be recognized by their stakeholders.
Companies that have officially changed their names to initials include AT&T, and J.W.T, previously J. Walter Thompson. Like IBM, these are well-established brands. American Telephone & Telegraph (AT&T) provided service to over 90% of the U.S. population. Following a decision to move into overseas markets, “American” Telephone & Telegraph was no longer applicable. The name change was based on the need to be appropriate in its foreign markets.
J. Walter Thompson is one of the world’s most formidable advertising agencies. After 127 years as a major force in the advertising business, J. Walter Thompson is a brand. In a decision to change the firm’s focus, chief executive Bob Jeffrey felt the company’s name should lead the change. In a Wall Street Journal article Mr. Jeffrey said, “We are radically changing the direction of the company, and the change in identity is a clear signal of that change.”
There have been many companies that have reversed their names from initials to more descriptive monikers. One example is PCW Products Co., Inc. PCW Products is a manufacturer of foam cushion insoles, callous removers and other foot relief products. However, “PWC,” the initials of its founders, didn’t sound like a company capable of manufacturing and delivering based on high volume retailers’ requirements. The company’s growth stalled. After hypothesizing the effect of its corporate name, PWC’s management officially changed to Premier Brands of America. Following the change, sales and profits soared.
Business success depends on brand perception, among other factors. A strong company or product name can be a powerful tool in molding brand perception.
In the absence of heavy advertising and promotion, a descriptive product or company name becomes vital. Product and company names should ideally be memorable and descriptive, eventually linking the brand to emotional attributes. To avoid confusion with other companies, acronyms and initials are generally poor choices as representative names. It’s differentiation, uniqueness and descriptiveness that will lead to brand recognition and recall over time.
Discover the advantages of Partners & Levit’s proprietary naming process. Call our managing partner Mark Levit at 212.696.1200 now for complete information.

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