When It Comes to Names, Corporations Just Aren't People

Al Ries Ron Johnson was shocked at what he found when he became CEO of JC Penney & Co. The chain ran 590 separate sales last year, and nearly three-quarters of its merchandise sold at discounts of 50% or more. You have to admire what he did next: Out with nonstop promotions, and in with everyday low prices. That goes against conventional wisdom. Almost every mainstream department store operates on a continual-sale basis, essentially training the consumer not to buy anything until it's on sale. I was then surprised by what Mr. Johnson did with the chain's logotype: a red-bordered white square, with "JCP" in a blue square in the upper left-hand quadrant. JCP? How many consumers call Penney's JCP? No one I know refers to it that way. A recent Associated Press story about Mr. Johnson referred to JC Penney three ways: J.C. Penney Co.(three times), Penney's (three times) and Penney (nine times). JCP, zero. If consumers "own" the brand, then they also own its nickname. And they probably prefer "Penney" or "Penney's" to "JCP." Then why would the company even consider using the initials as its logotype? Having worked with a number of big companies, I've noticed that employees often call them by pet names. I wouldn't be surprised if many JC Penney staffers routinely use "JCP" in emails, reports and other internal documents. JCP, three letters, is easier to write than J.C. Penney . I'm sure that , after years of typing "JCP," many executives think of it as the name of the company they work for. Consumers are different. What companies write about, consumers talk about. Spoken length is what matters. Consumers almost never use a nickname unless it's shorter than the full name of the product or service. "Let's get some stuff at Penney's." Penney's is shorter to say. And consumers will never use "JCP," three syllables, instead of "Penney's," two syllables. Years ago, Western Union was one of our accounts. Early in the relationship, I was mildly surprised to see internal memos about "WUCo": Western Union Corp. Western Union, whose reputation suffered because of the connection with telegrams, was a candidate for a name change. (As Time magazine once reported: "It was on time and had no typographic errors, so we knew it was a fake telegram.") We recommended "Westar Corp." We spent a lot of time and money on presentations and prototype ads but got nowhere with management. We finally threw in the towel. Big mistake. We should have advised the company to change its name to "WUCo." That was the name insiders knew and loved. It probably wouldn't have occurred to Western Union executives that "WUCo" didn't sound very good as a name, because they never spoke it aloud. That's why many naming decisions get it all wrong. Why saddle the largest-selling citrus-beverage brand with the label "Mtn Dew?" A brain has to convert "Mtn" to "Mountain." So using the abbreviation just gives shoppers extra mental work to do. It's highly unlikely that a marketing campaign will change the way consumers refer to a brand. How many people call Dunkin' Donuts "DD?" or Gatorade "G"? Instead of trying to force-feed a nickname to consumers, a company needs to wait for them to popularize one. Coca-Cola, for example, didn't put "Coke" on its bottles until after people began calling the product that . Many companies use initials to distance themselves from the past. For example, the American Association of Retired Persons became AARP, not wanting to present itself as an organization restricted to retirees. And yet, that 's what the initials do. The media isn't too helpful, either. A recent article in the New York Times referred to AARP as "formerly the American Association for Retired Persons" -- 13 years after the switch. (We once suggested that the organization become the American Association for Revitalizing People and call its magazine "Act Two.") When people see initials, they think, "What do those initials stand for?" IRS stands for the Internal Revenue Service. FBI stands for the Federal Bureau of Investigation. Shorter names are better, but not ones that lack meaning. Back to where we started, JC Penney could have used "Penney's," a name that creates a connection. The chain could then have run a campaign with the theme, "Save dollars at Penney's every day of the week." ABOUT THE AUTHOR Al Ries is chairman of Ries & Ries, an Atlanta-based consulting firm he runs with his daughter and partner Laura.

When It Comes to Names, Corporations Just Aren't People

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