Marry in haste, repent at leisure. So goes the old saying. It’s exactly the same with a business name. Remember that you’ll be stuck with it for a long time, so you want to make sure it’s a good one. You can change your business name, of course, but, just like divorce, it can be expensive if you have to order new stationery and get a new website, not to mention the cost of advertising to build awareness of your new name.
When you first decide to start a business, you spend a lot of time choosing what products to sell, finding a good supplier, then conducting thorough market research. You will then take plenty of time — and possibly shell out a lot of money — on recruiting and training a sales force. And then it’s time to choose a name for your business, a name, remember, that will be with you for much longer than your stationery and most of your staff. So, what do you do? If you are like a lot of people, you will post a message on an online forum saying “Hey guys, what shall I call my sportswear-importing business?” or “Can anyone think of a good name for my cleaning company?”
And what is the result? You will certainly get replies, but some will be facetious and most will be unsuitable. Why? It’s not the fault of the forum users, who are well-meaning and want to help. But you have not given them any information to base their decision on — who your target audience is, your location, your unique selling point, your company values. As a result people suggest names that they like. But the personal preferences of the forum users are irrelevant — unless these people match the profile of your target market.
Why does it matter?
Choosing a business name is at least as important as choosing a supplier, a website designer or a sales team — and probably more so. By all means pick the brains of as many people as possible, but they need to know some basic information about your business and your target market. Are your potential customers men or women? A name that appeals to one sex may not appeal to the other. How old are your customers? You need to address younger and older people differently. What values does your company espouse? Low prices? Eco-friendliness? Tradition? Your name can convey these qualities.
Make your name easy to say
Companies whose names are easy to pronounce make more profit than those with names that are difficult to say. Does that sound a wacky statement? Read on – the name of a company does influence purchasing decisions.
In a study conducted by two Princeton University psychologists in 2006, it was discovered that companies with names that were easier to pronounce performed better on the New York Stock Exchange and the American Exchange in the days immediately following their flotation. Investors were more likely to purchase newly offered stocks of companies with a pronounceable ticker symbol, such as BAL or RAD, than those of companies whose ticker symbol consisted of an unpronounceable sequence of letters, such as BDL or RDA.
The researchers discovered that if you had invested $1,000 in the ten most pronounceable stocks at the start of their first day of trading, you would have made $85.35 more in that one day than if you had invested in unpronounceable ones. The psychologists took account of size of company, country of origin and the industry sector, but the results still held true.
The Princeton researchers are not advising people to pick the stocks and shares they buy based on the company’s ticker symbol. Their results were statistically significant only for the first few days following the initial public offering. However, the study does show that psychological factors play a significant role in purchasing decisions, even ones where large sums of money are at stake and where buyers think they are making a rational decision based on the facts. The psychologists concluded that people prefer to work with information that is easy to process, namely with combinations of letters that are familiar.
What has this got to do with attracting customers to your business? Well, it shows how important the name of your business is. Names that are easier to say are more memorable, and thus more profitable.
Choose a name for your business in haste, and you will certainly repent at leisure. Take your time, do your research and you will have the perfect match.
About the author: Susan Purcell is a professional linguist and writer based near London, UK. Hundreds of entrepreneurs have learned how to create great names for their businesses and products by reading her e-guide, Choosing a Winning Name for Your Business, available from the Winning Names website.
Susan was a teacher for over fifteen years, and has also worked in two large London advertising agencies and for a publishing house. She has written three BBC books on learning French, and is the author of three other language books and a children’s dictionary and thesaurus.