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Companies bet big on name game

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What’s in a name? About $35 million if you’re BearingPoint Inc., which spent that much to change its name from KPMG Consulting last month. For Deloitte Consulting, which will officially change its name to Braxton Consulting in January, the process will cost an estimated $70 million. And these companies are spending less than the reported $170 million the former Andersen Consulting spent in changing its name to Accenture in 2001.

It’s clear that corporate name changes—and the marketing communications efforts they demand—are a high-stakes game. Even though the number of name changes in the first six months of this year declined about 30% from the first half 2001, they are still occurring with staggering frequency. From January through June of this year, nearly 1,400 U.S. companies were renamed, according to branding consultancy Enterprise IG Inc.

Corporate name changes have slowed since the economic bubble burst in 2000, observed Robert Kahn, exec VP for Enterprise IG. “What [companies] are doing is taking what they have and making it work harder,” he said.

For some companies, though, change is unavoidable. David Redhill, director-global brand strategy for Deloitte Consulting, who is overseeing the company’s name change and is a former employee of branding consultancy Landor Associates, said he expects corporate name changes to accelerate again soon.

“New waves of technology and the speed with which they enter the marketplace and things like Enron can color perceptions of a whole industry and the reputations of clients almost overnight,” he said. “This means that corporations have to be a lot more responsive and open to change.”

Changing a corporate name can be a complicated task. The process requires an exhaustive trademark search, an examination of how a new name will play overseas and decisions about marketing the new moniker.

The Enron effect For economic and regulatory reasons accelerated by the Enron and Arthur Andersen scandals, the Big Five accounting firms have moved to sever ties with their consulting units.

KPMG Consulting was spun off from KPMG Inc. and went public in 2001. The Securities and Exchange Commission required the new entity to change its name by 2005. The company announced on Oct. 2 that it was changing its name to BearingPoint immediately.

The renaming process, which was headed by Linda Rebrovik, BearingPoint’s chief marketing officer, took slightly less than a year. As a global company, the firm needed a name that would work overseas.

“You have to make sure there’s no Chevy Nova,” said Julie Cottineau, naming director at branding consultancy Interbrand, New York, referring to the infamous branding of a car model, which in Spanish translated as “no go.”

KPMG Consulting had to find a name that fit its brand and was available. “It literally gets more difficult every day to develop a globally available trademark,” said Anthony Shore, senior director of naming at branding consultancy Landor Associates, San Francisco.

After considering more than 500 names, the former KPMG Consulting chose BearingPoint. The nautical term is intended to reflect how the company helps clients set directions and reach goals. The name change is currently being promoted with TV spots showing professional golfer Phil Mickelson exchanging a KPMG visor for a BearingPoint visor. The spots were created by Arnold Worldwide, Washington, D.C.

The new name has received mixed reviews. “I think it’s O.K.,” said Jim Gregory, CEO of branding consultancy CoreBrand L.L.C., Stamford, Conn. “It’s not horrible. … I understand what they’re trying to do.”

Others have not been so kind. “It’s the worst bloody thing I’ve ever seen,” said Enterprise IG’s Kahn, who complained that ads for BearingPoint say the company has done more than change its name but then don’t back up that statement.

It’s important to note, however, that many observers criticized Accenture when it first appeared. “Now, it’s pointed to as a poster child for doing it right,” Gregory said.

Unlike BearingPoint, which launched its new name with a big bang on a single day, Deloitte Consulting has chosen an unusual, staggered process to launch Braxton. Even though the company won’t formally change its name until January, it announced the new name in July. “We wanted to avoid leaks,” Redhill said.

Braxton was a name to which Deloitte already had the trademark rights, since it had acquired Braxton Associates in 1984. For Redhill, the use of a name the company already owned is important, because it reinforces a core principle of the company’s brand: “Pragmatism,” he said.

The official Braxton kickoff in January will include TV advertising created by DDB Worldwide, San Francisco.

Consulting firms not alone Consulting firms aren’t the only companies engaging in corporate name changes.

ITWorld.com, an International Data Group company that runs a Web site for IT professionals and offers Webcasts for marketers, is changing its name to Accela Communications.

ITWorld, which was created in 1999, had outgrown its name, said Bill Reinstein, the company’s CEO. The problem: the Webcast platform proved so attractive that non-information technology companies wanted to use it. “You’d be meeting with big publishers outside the IT space, you’d take out your business card, and you’d cringe a little bit,” Reinstein said.

So Jennifer Devine, the company’s marketing communications manager, went to work. The company considered lots of names, including ForeCast and Brandwidth, before arriving at Accela Communications, which is meant to emphasize the company’s desire to accelerate lead-generation for its customers. The process, including a trademark search and development of a new logo, was completed in about 90 days and cost about $20,000, Devine said. That figure includes new logo treatments and communications (e-mail blasts and public relations), but doesn’t include costs for staff time.

Outgrowing a corporate name It often takes time to see how a name change has performed. Universal Foods Corp., Milwaukee, also believed it had outgrown its name. Through acquisitions and growth, it had morphed from a food ingredient manufacturer to a company that also made computer printer ink and ingredients for pharmaceuticals. But because Wall Street was still assigning food industry analysts to follow the company, Universal Foods didn’t believe its share price was receiving its full valuation.

So it hired CoreBrand to find a new name. Noting that the company developed ingredients that helped foods and other products taste, smell and look better, CoreBrand suggested the name Sensient Technologies. The word Sensient, which was available for trademark and as a URL, seemed to underscore the idea that the company’s ingredients made products more palatable to the senses.

The new name was announced in November 2000. Two days after the announcement, the company’s adjusted share price stood at $20.69. On Nov. 5 of this year, the shares closed at $24.65, a 19% boost in a bear market.

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