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April 17, 2017

BRANDING | The Curse of the Three Initial Company Name | Part Three

But aha! you say, there are successful Three Letter companies: IBM, ABC, PPG, CDW, and so on. True enough, but all of those examples were famous companies with meaningful names before changing to initials. They were, and remain, household names because of that momentum. Contrast that with these companies, who are also among the largest 500 companies in America. What do they do, and how memorable are they: PPL, CNF, CMS, BB&T, TJX? If you’re an investor, you might have a better shot at these, since they may coincide with the stock ticker symbol … but you do see the point, don’t you? Why doom yourself to a forgettable name from the start?

By the way, CDW’s change to initials was a serious mistake. Many (older) customers will still say to themselves “CDW? Oh, yeah, Computer Discount Warehouse,” but many more either never knew, or forgot, or will soon forget. A new generation is always coming along who never knew the mnemonic predecessor name. It’s a false step CDW will have to correct once they realize it, maybe 5 years from now. Set your watch; we can wait.

Time out to discuss China.

In China the Chinese, frankly, don’t yet understand branding. They are, temporarily, content to be the world’s manufacturer, and are only beginning to see that the $6 item purchased in the US delivers to them far less than it delivers to the brand holders, about one dollar out of the six. But they will learn, and the impact on Chinese profits and their GNP will be profound.

Yes, Lenovo is a solid and growing Chinese brand, but it’s the exception. Consider three large manufacturers who hope to gain a foothold in American markets: TCL, ZTE, and BYD. (Notice a pattern?) If I were to ask you what they make, more than likely you’d draw a blank. If I told you they make televisions, cell phones, and hybrid cars, respectively – and then asked you again tomorrow – you’d probably go blank again.

Combine a Three Initial Mistake with a hackneyed logo to be sure nobody will ever remember or even notice it. For the Microsoft consultants, an orbiting swoosh mark*; for the financial planners, three initials in a “dignified, traditional” font, reversed out of a rectangle. Add to this muddle a web address that in desperation uses a .net or .biz or .us suffix to confuse prospects, and the firm is walking in soft cement.