What Is In A Name?

It is believed that Shakespeare asked, “What is in a name?”

Indeed, what is in a name? For the entrepreneur and for any other business, a name is valuable. It says something about that business. Whoever hears the name can associate with that business and associate with products, services, and value that are offered by the name. The name of a business can therefore be seen as an organizational mantra. The more the name is being heard by clients or by potential clients, the more the products, services, and value of that business are being reinforced in the psyche of the hearer.

From the principle of name recognition, it is very important for a business not to tamper too much with its name or the name of its ancillary businesses – especially when the ancillaries share a name common to the rest of the organization. As an example, if ABC Corp. has an ancillary named ABC Venues, it is easy for clients to associate with what ABC Venues does. It is also easy for clients to know that they are dealing with part of ABC Corp. The name thus creates a reassurance to the market. It sends signals to the market and the market will, potentially respond to those signals.

Unfortunately, there is a habit under some enterprises to change names more often than politicians may change affiliations. Said name changes are more common amongst the ancillaries of an organization. The pattern is that the parent name remains in tact but that the ancillary keeps on showing strong chameleon behaviours. The advocates of such name changes argue that the name change helps to make the organization help to keep the enterprise and its ancillaries competitive.

Is this true? Can a name change make an enterprise more competitive?

Consider the case of ABC Venues that suddenly decide to change its name to ABC Horizons, whilst is still provides the same products or services they had under the previous name. How will the market respond? Will they still associate with the products and services that are being offered? On the other hand, in the worst possible case, will the market be confused?

Perhaps a few simple principles should be considered.

·        Names should be consistent with products and services offered;

·        Names that have been used in the market for a long time may best be left alone, unless the enterprise rebrands the parent name. In this case, ancillaries should follow a similar change so that it can still be associated with the parent name;

·        Unless the ancillary is being unbundled from the rest of the enterprise, name changes may be inappropriate.

A well-known brand name has renamed one of its ancillaries no fewer than five times in the last eight years. The products and services of that ancillary have remained more or less the same for the past eight years. In addition, each time a restructure, (three in eight years) took place, a name change of that ancillary was a guaranteed outcome. Last, each time such name change took place, it was associated with a promise that the ancillary will become more competitive and that it will create more market share. Each of the arguments sounds noble at face value. Yet, this famous brand’s ancillary found that its market share dropped from 35% to less than 16% over the last eight years.

Of course, the loss of market share is or grave concern for this brand and its ancillary. Many causes have been offered for the decline in market share. Millions have been spent on expensive consultants that write tomes about all they leant in business school. Worse, despite the advice of the army of consultants and all the other restructures and name changes, the market share remains terminal.

Did anyone consider the effect that name changes have in the mind of the market? Enterprises should realise that one of the most important attractors of market share could be found in a simple name.

This is the official blog of Skopus Business Consultants. Visit us at www.skopus.co.za

Promises Made Are Promises Kept!

A few days ago, I visited my favourite little Bistro. They are known for good cheesecake and a pleasant lunch menu. Because it was nearly lunchtime, I ordered the Prego that was on the special menu. What made this Prego special is that the menu announced that it is made with a filet steak instead of the usual tenderised steak or a thin slither of shoe sole that one often encounters at little Bistro’s that offer Prego’s on their menus. At fifty-five Rands, for the Prego, small salad and French fries included, the price sounded reasonable; especially when one considers that the Bistro uses filet steak and nothing else.

Great was the disappointment to discover that the “filet” being used was actually a reasonably cooked tenderised steak. In spite of feeling a bit betrayed, the meal was well presented and flavourful.

However, this is not a restaurant review. I relate this story to highlight a few classic traps that entrepreneurs can avoid if they are alert. In this case, the owner of the Bistro stepped into a long isle of nasty bear traps. In addition, the most unfortunate of this fact, is that the owner do not seem to realise the damage being done to her business.

First, the owner is a restaurateur but does not seem to know a lot about ingredients. Any beef or pork presented as a filet cannot be tongue-shaped when the meat is cut cross-grained. In such as case, filet would rather be medallion-shaped. Second, the owner of this little Bistro told me in a telephone conversation that I was not the first patron who complained about not being served a filet Prego but something else instead. Third, the owner was not on her premises when the incident occurred. She was elsewhere and entrusted the whole restaurant to an inexperienced manager. Fourth, the owner has been using the same butcher for almost five years. This butcher has been selling her tenderised steak at the price of filet for that whole time.

Clearly, there are a few lessons that entrepreneurs can take out of this tale:

·        Know your product;

·        Select your suppliers carefully and make sure you pay what you asked for;

·        Do not hesitate to inspect goods delivered to you by your suppliers. Their dishonesty or incompetence can ruin your reputation;

·        Make sure that you actually sell to your clients what you offered to them. If a filet Prego is on the menu, then the client expects a filet Prego and nothing else;

·        Be at your premises as often and as much as you can. If you need to appoint a manager to take care of your business, make sure that manager is well trained and able to handle dishonest suppliers and irritated clients.

No entrepreneur can afford that your own incompetence ruins your business. It is even more unforgivable if clients complain repeatedly about the same thing and you do not replace that supplier. It is not worth it to let your business suffer to consequences of a dishonest supplier. No matter the level of the good relationship you had with that supplier. Once trust is broken, it is best to walk away in the interest of your own reputation.

This is the official blog of Skopus Business Consultants. Visit us at www.skopus.co.za