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What’s in a Name, Part II

February 4, 2010

MATT BROWNELL, Editor

Here’s a fun one: the Boston Globe reports that companies with simple or easy-to-pronounce names outperform companies whose names are more of a mouthful. It might seem crazy to go picking up a company’s stock based on their name, but the basic concept makes sense: if people can’t say or understand your name at first glance, that’s already a strike against you. It’s a bit like having a shabby storefront – like it or not, people judge a book by its cover.

Then again, there are plenty of wildly successful companies with troublesome names. Take Ruth’s Chris Steak House. “Ruth’s” is already tough to pronounce, with the ‘th’ followed immediately by the apostrophe ‘s.’ The addition of “Chris” – apparently the founder, Ruth Fertel, bought the existing Chris Steakhouse in 1965 – renders the name borderline nonsensical to those unfamiliar with the company’s history. Who or what is Chris? Does he/it belong to Ruth? What does any of it have to do with steak? While the mystery presented by the name might get a few curious people in the door, I’d imagine that even more potential customers have been put off by the peculiar and difficult-to-pronounce name. And yet the company has thrived, with over a hundred locations across the US. Having eaten there, it’s not hard to see why – for all the problems with their name, their product is clearly top-notch.

Another example is the financial services company TIAA-CREF, which its own CEO concedes is a “clunky name.” It’s one of those dreaded acronym names: it tells you exactly what they were when the company was founded (“The Teachers Insurance and Annuity Association of America-College Retirement Equities Fund”), but isn’t exactly easy to say. While acronyms can sometimes result in a decent name (take GEICO, The Government Employees Insurance Company), TIAA-CREF sounds more like an obscure government agency than a financial services firm. Yet TIAA-CREF has likewise prospered, becoming one of the largest financial services companies in the country. Still, it’s hard not to wonder how much more successful they would be with a simple name like “Fidelity.”

I suppose the lesson here is that even the worst name isn’t enough to sink a truly great company. But why would you put yourself at that disadvantage? The good news is that with no mergers or complicated acronyms in our past, Ictus has been free to formulate a simple, easy-to-pronounce name. As such, we’ve always had a simple and inviting “storefront” – and as our rebranding proceeds, it’s only going to get nicer.

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