In the post “Choosing a naming strategy for an acquired brand and business” (Sept. 1, 2012) I wrote about the naming strategy that the Bank of Nova Scotia should employ for its acquisition of ING Bank of Canada. My advice was based on its decision to operate this entity as a standalone business unit to retain its customer base and deposits.
It is now four months after the acquisition and a name has still not been announced. What I find odd is that the Bank of Nova Scotia hadn’t decided on a name for its new acquisition beforehand and announced it in its press release at the time of acquisition. The free publicity from this would have been immensely valuable to the corporation and would have aided in helping it achieve their above-noted goals.
It seems that we will have to wait until 2013 before the Bank of Nova Scotia goes public with the new name. I wonder how much executive time and effort is being spent on internal debates related to this decision. Do they even have a brand-naming policy to guide their deliberations?
Brand building requires sophisticated managerial tools
Brand management requires sophisticated managerial tools to guide the process of building strong and coherent brands in the marketplace. I’ve talked about the importance of a Brand Platform in “Mike’s challenge for building a strong brand and business” (June 5, 2012) and “Brands need a platform–but which one is best?” (July 5, 2012). Almost as important, but less well known and therefore generally under-utilized, is a Brand Naming Policy.
A Brand Naming Policy is an internal document that guides managerial decision-making for naming new business units, products, or services. It formalizes the rules that determine the brand naming options and architecture within a brand portfolio. Functionally, the job of a Brand Naming Policy is to aid in decision-making. Strategically, it helps to create a strong and coherent brand portfolio that optimally leverages the corporation’s brand assets.
Even though the Bank of Nova Scotia has depended on an acquisition strategy for much of its growth during the past ten years, my guess is that it doesn’t have a formal Brand Naming Policy. If that is true, this is likely the reason a new name has still not been announced. Perhaps it’s time for the C-Level executives to strike a small cross-functional task force to create such a policy for the bank.
A useful example of a brand naming policy
In “Brand Strategy For Business Markets” (Anderson, James C., and Carpenter, Gregory S.), just one of many excellent chapters in Kellogg on Branding the authors describe the proprietary GE Acquired-Affiliate Naming Scheme conceived by General Electric to aid naming decisions by the corporation’s executives for the 200 companies acquired in both 2000 and 2001. They assert that, “the objective of this five-level naming scheme was two-fold: to protect [and grow] the equity of the GE brand and to leverage the brand equity of the acquired company, where appropriate.” Although the naming rules allow for some level of subjectivity in executive decision making, even a brief review of the two charts below demonstrates the value of this tool in aiding executive naming decisions for newly acquired companies.
The first chart depicts the 5-level naming options available to executives in naming decisions. Level 1 is used to ensure the highest level of identification with the GE name and in Level 5 the GE name is invisible, as no benefit is perceived in associating the GE name with the acquired company
The next chart illustrates the naming rules used by executives to determine the most beneficial naming option for both GE and the acquired company. The goal is always to protect and grow the equity of the GE brand and leverage the equity of the acquired company where appropriate.
You need your own brand naming policy
While the GE Acquired-Affiliate Naming Scheme has been a valuable tool for aiding executive decision making for newly acquired companies at GE, your company will benefit from the development and use of its own tailored naming policy. This will ensure the vitality of your company’s brand portfolio based on the reality of your competitive environment and your specific business goals and strategies.
Start this process by helping your colleagues recognize the time and effort already spent debating options and arriving on naming decisions for previous acquisitions. Then get them to imagine the R.O.M.T.A.E. (Return on Management Time and Effort) that will accrue once a tailored Brand Naming Policy is in place. Then, simply get going. Create a small cross-functional task force of a few highly regarded colleagues to expedite the development of this important managerial tool for improving the stewardship of your brand.
Why should you do this? Because a Brand Naming Policy is integral to a strong brand and business.