Let's play a game. You've probably done this before. I'll say a company name, you tell me what that company stands for. IBM. Microsoft. BMW. Coca-Cola. Verizon?
Got you on that last one, didn't I?
If you haven't already heard about this - the press release came out Monday April 3 - you may be surprised to hear ‘Verizon' was selected from among 8,500 candidates in a lengthy and expensive process. In addition, more than $300 million will be spent on marketing to support the new name.
Verizon, pronounced ‘vurr-EYE-zon', is derived from the clever combination of ‘veritas', which means truth in Latin, and ‘horizon'. SONY has a similar heritage, being derived from the latin word ‘sonus' back in the days when everything that company did dealt with sound.
Does this imply that Verizon deals with truth? Of course not. It's the phone company, or at least a phone company. More specifically, Verizon is what you have after Bell Atlantic buys GTE. I know what Bell Atlantic and GTE are. I understand the logic behind Arch Communications, Lucent, Nextel, Nortel, Teligent, Omnipoint, Qualcomm and Sprint. Even Wildfire makes sense in its own way.
But what's a Verizon? Other than to evade geography and escape the Ma Bell connection, what is the added value? If those, admittedly good reasons, were all, why didn't the decision-makers simply stick with GTE, the more inclusive name of the company being acquired? AlliedSignal morphing into the new Honeywell, Norwest into Wells Fargo, and NationsBank into Bank of America all went that route, taking advantage of the brand equity we must assume was part of the purchase price.
These questions are especially important because Verizon must reach out and connect with the masses, not simply a select group which essentially guides the masses as is the case with the merger-happy drug companies. This means that when Vodafone Airtouch merges its wireless operations with that of the combined Bell Atlantic / GTE, the newly named Verizon Wireless will go head-to-head with AT&T Wireless, Sprint PCS, Nextel Communications and Voicestream, as well as the wireless combination of SBC and BellSouth announced April 5.
Let's start with the fundamentals and imagine why names matter. Why does your name matter? Well, your name represents who you are for people that know you, or at least know of you. As people get to know you, or hear about you, they associate certain emotions and images with the collection of phonetic sounds that make up your name. That's why your name could mean different things to different people - and probably does. Your name is also one of the first things you tell strangers if you have any interest in interacting with them.
Moreover, because how we think is so influenced by the norms of the society we live in, how our names sound, even how they look written, carry with them a certain feeling before we, the people our names are supposed to represent, even enter the picture. Yes, this means we are often pre-judged by the associations our names conjure up even before someone has met us.
Companies are also pre-judged. Think back to the first moment you heard the name ‘Verizon'. Did you think about it at all? If so, what was your immediate thought? You don't know what the company looks like. You don't know who the company hangs out with. All you have to go on is the company name, those three syllables chosen for greatness out of 8,500 groupings of sounds.
Companies are inherently different from people in three crucial ways that impact the naming process.
1) Companies, or at least the good ones, tend to be based on certain core compentences which essentially carve out their market positions. Their names either capture their positions from early on, think IBM, or come to represent their positions, think Toyota.
2) Companies, unlike the vast majority of people, usually have marketing budgets in order to cultivate their brand names and thus reinforce these positions. Think Coke and Ford. People know these companies and their products, yet the marketing continues.
3) It is generally assumed that being able to hold on to this position, or deftly move to a new, more profitable one, will improve the company's long-term financial prospects. Think AT&T. It owned the phone company position; now it wants to be the infrastructure, if not the content provider, for all your communication and entertainment needs.
Back to Verizon and why should we care. Ultimately, when you have a company that large, willing to spend that much money, a name with almost any backstory probably won't doom the company.
On the other hand, I feel in my gut that the people in charge are missing a strategic opportunity. Companies such as Ford, Toyota, and Wells Fargo could grow into their names because they were named in the early moments of their industries.
Leaders at the companies that became IBM and WorldCom took another approach. They chose aspirational names. They looked into the future and asked, ‘Who do we want to be?' and then they went for it.
Bell Atlantic should have used this naming process as a chance to stake out the area they aspire to dominate, as well as how they plan to do it, meaning their positioning. Verizon, ‘truth in the horizon', doesn't do it for me, doesn't establish who they are and what they do.
It reminds me of Diageo.