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Thursday, 07 May 2015 7:16

Can a Name Change Get a Company Out From Under an Image Crisis?

By - Michael Rader

 A company’s name is often its most valuable asset, reflecting the morals and ethics that customers are looking for. Companies that create a solid and identifiable brand identity are the ones that typically enjoy long-term success. Unfortunately, that brand identity can also become a detriment if a company is rocked by scandal or suffers a public perception catastrophe. Some brand personas can be salvaged, while others are forced to start from scratch. Can a name change get a company out from under an image crisis?

Companies change their name for a variety of reasons. It is a very expensive process and one that shouldn’t be undertaken unless the action is a last resort. Some changes are the result of a merger or the death of one of their founding members. Others, however, have no choice in the matter and change their name in a last ditch effort to salvage their future.

Reports of scandalous or illegal behavior have become quite commonplace in our society. Although many businesses operate within a strict sense of ethics and seemingly always put the customer first, there often appears to be an equal number that are built upon lies and deceit. Inevitably, the reality of these companies is brought to light and even their most loyal customers turn on them. Once skeletons are exposed, it is impossible to put them back in the closet.

It is very difficult to outrun a public scandal. People tend to hold grudges for a very long time, regardless of the company’s efforts to turn things around. When a company name becomes synonymous with deception and immoral behavior, the public notices. A recent example involves the company Blackwater, a security firm working in Iraq in 2009. After members of its team were charged with the heinous murders of several innocent Iraqi citizens, the company changed its name to Xu Services. In 2010, the company was sold to Academi Security, and subsequently adopted its moniker. Although Blackwater is still synonymous with corporate greed and immorality, the name change has allowed them to begin creating a bit of distance from the outrage.

Another example of scandal motivating name changes involves News International, the multi-million news service owned by Rupert Murdoch. After the company’s policy of hacking phones came to light, the name was quickly changed to News UK. Unfortunately, Murdoch and his businesses have been largely unable to outrun the controversy, and they are still playing the price for their illegal and immoral behavior.

Sometimes the public associates particular companies with individuals that have been convicted of illegal acts. After Bernie Madoff was convicted in a $50 billion Ponzi scheme, companies tried to erase any association they may have previously had in an attempt to escape a guilt-by-association type of reaction. Recent professional sports figures have found themselves in similar situations following a public incident. Former Baltimore Ravens running back Ray Rice, for example, was cut by his team after a very public domestic assault incident and has yet to be resigned. Endorsement deals have disappeared as well. It appears as if companies are not willing to take a chance on tarnishing their own public image, regardless of Rice’s attempts at earning redemption.

Occasionally, businesses find themselves embroiled in negative publicity for reasons outside of their control. The NFL’s Washington Redskins are currently surrounded in controversy because of the perceived racism in the “Redskins” name. Protests are common both outside of their home stadium and in cities across the country when the team comes to town. In this case, a name that the current administration had nothing to do with is causing chaos and controversy. As of yet, the organization has refused to change their name. How long they can keep that line drawn in the sand has yet to be determined.

Another example is Phillip Morris, who changed its name to Altria in 2003 in an attempt to disassociate themselves from the controversy surrounding cigarettes. The company’s mode of operation had not changed, but society’s views on cigarettes had. Even though Phillip Morris was virtually the same company it had always been, it’s image took a beating.

In still other incidents, tragedy is the precipitating factor in an image crisis. One of the most recent examples involves the airline company ValuJet, who became AirTran in 1997 after one of their DC-9 planes crashed in the Florida Everglades. Although the crash was a terrible tragedy that was not due to negligence on the part of ValuJet, the company’s image was demolished in the eyes of public perception. In both of these examples, the companies hoped an identity overhaul would salvage their public image. The results have been mixed.

Today’s society is full of crime, corruption, and terrible tragedy. Once a company finds itself in the eye of the storm, it can be difficult to sway public perception. Sometimes a complete name change is the only hope. A new moniker will allow you to break free from the tethers that keep you in the same place and give you a fresh start. It is possible to survive the type of crises mentioned in this article, but you have to be all in first. Digging out of a hole takes time and effort. Changing your name and rebranding can give you a bigger shovel.

Last modified on Monday, 30 November -0001 12:00

Michael Rader

With over ten years in web development and design, Michael Rader has expertise and technical know-how. But more than a skilled technician, he is an entrepreneur and innovator who helps startup’s and new businesses identify and define their future with a unique, brandable business name. Michael Rader is the founder and CEO of Brandroot®, a leading .com domain name marketplace. He currently lives in Kailua-Kona, Hawaii where he operates the business and authors a blog dedicated to naming and brand name establishment.