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Should you choose an abbreviated name like IBM, HP or BMW?

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When we look at big successful companies such IBM, HP, BMW, KFC or HTC we are tempted to believe that one of the keys of their success is the short abbreviated name. So, when we want to launch a new brand, we copy these companies in terms of naming.

Almost every time we work on a new project we deal with this opinion and we hear the following: ‘I want a very short name, easy to memorize, like IBM or HP’.

The reason why many people believe this is the holy grail of success in business, is that they never ask the question: ‘Does an abbreviated name help my business to grow?’

Well, the answer is disappointing for most of them: NO, an abbreviated name does not help you, especially when you are at the beginning of your journey.

So maybe you are wondering why big companies use names like these, though.

Let’s go deeper to see what disadvantages come with acronyms and how these companies came to choose these names.

Disadvantages of using an acronym as a name for your brand:

1. An acronym means nothing

When you launch a new brand or you are rebranding an existing one, usually it is hard to associate values and a positioning to that new name from the beginning. It takes time for people to get used with the mission statement, the promise and the values of the new brand. Imagine that this is something hard to achieve even for metaphorical or evocative names.

How do you think you can make your audience to feel something when they hear ACI, LMS, ADPR or SM?

Abbreviated names means nothing for your clients!

2. Your Google presence will be hard to find

When you choose an acronym as a name, you can have a lot of issues regarding your online presence. Type AMA in Google, for example. You will see dozens of companies named AMA.

You may say that SEO shouldn't be an important criteria, but it is, when online presence is mandatory, nowadays.

3. It is hard to register as trademark

In this century, when the market is overcrowded, not even a small boutique should exist without having its own name registered as a trademark. If so many companies use acronyms as a name, what are the chances to register a new acronym nowadays? Very small.

4. It is (almost) impossible to find a free domain name

If you are thinking to get a free .com, forget it, especially if you choose a name with three letters. Even if you opt for another web extension, it is hard to impossible to find a free web domain for a name with three letters.

5. It needs a huge budget and a long time to become a brand

Usually, an abbreviated name needs millions of dollars and decades to become a brand. Ask yourself if you are willing to use your resources like this. Of course, any new company needs financial investments and time to become a brand, but when its name is an acronym, the efforts to educate and gain the audience will be significantly higher.

So let’s go back to the big companies like IBM and HP ant their success.

IBM has its roots in the 1880s, as Computing-Tabulating-Recording Company. In 1924 it became International Business Machines Corporation and the IBM abbreviation shortly followed. As you can see, it's been almost a century since IBM name was used. Not to mention it was chosen in a market not so crowded.

HP, another corporation with an abbreviated name was founded in 1947 getting the name of its founders Hewlett-Packard. The name was abbreviated in the logo since the foundation. Again, we are talking about decades of existence.

Beside their age, both companies spent hundreds of millions of dollars in marketing and they did this for such a long time. They created a valuable heritage that would be lost in a renaming decision. Today, these brands worth billions of dollars. And this is the case for many other corporations, such BMW.

So if you are launching a new business, our advice for you is to stay away from abbreviations, if you do not have huge financial resources to invest in marketing. If you have them, use it for something else, because you will need decades to grow, anyway.

If you have a naming project and you need professional assistance, write us and we will help you.

You can follow us on Linkedin and Instagram to see the most recent updates from our work and our wonderful business trips! 

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Marcela and Andra                                      Marcela and Andra

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