Steve Kaplan's Blog

November 16, 2011

What’s in a Name?

Filed under: Steve Insight — stevekaplan @ 3:22 pm

A lot.

We’re all familiar with company name changes. No matter the size, the industry… this happens often. In 2007, publishing giant Warner Nooks changed its name to Grand Central Publishing. In 1991, Kentucky Fried Chicken changed its name to KFC in an attempt to divert attention away from the “fried.” Who could forget about when AT&T got rid of Cingular? A lot of people. That name-change transitioned gracefully.

The fact of the matter is, there is always a reason why company changes its name, and it always has to do with branding. However- it is a gamble. Sometimes it works and sometimes it doesn’t.

Often times, consumers are attached to the original name, and can’t seem to let it go.

This month, after a short-lived rebranding to “O.co,” Overstock.com announced that it would once again be known as Overstock.com.

The company’s experiment started in July, and quickly ended this month.  “We have been listening to our customers and have learned that they we’ve moved too quickly in the transition,” Jonathan Johnson, Overstock’s president, tells Mashable. One of the reasons?

Customers continued to call the company “Overstock.com” even after the transition.  They were already attached to the brand name the company had already created.

Overstock isn’t the only company who saw that consumers got attached to their devoted names. When Netflix renamed their DVD service to Owikster, it quickly changed the name back after a mere few weeks due to the consumers’ response. Pizza Hut and Radio Shack tried to rebrand their names into abbreviated “The Hut” and “The Shack.” They too learned an important lesson about branding when their consumers’ reactions caused them to change back to their original names.

But it’s not just the attachment to the name that made this re-branding flop. Although the company aired an aggressive run of TV commercials that explained, “Overstock.com is now O.co,” consumers were confused.

And while attachment is a huge problem with rebranding a company name, consumer confusion is just as troubling.

An abundance of customers went to “O.com” instead of O.co.  This rebranding a.k.a confusion contributed to a major decline in revenues. “We were going too fast and people were confused, which told us we didn’t do a good job,” Overstock president Jonathan Johnson told Ad Age.

Overstock.com will still use the O.com one letter domain so consumers to use the shortened name as a short cut to reach its website.

What do you think of this name change mistake?

 

 

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