You’ve probably heard the advice before: come up with a business name that is short, memorable, and reflects what your business does.
This helps you stand out to potential customers who are just glancing over an alphabet soup of company names. It reduces spelling errors when people try to find you online. And it has another advantage as well.
A number of companies have realized- over many years- that they are better off not using the formal name of their business at all, but instead giving it a nickname or alternate brand name.
Think about Apple Computers . Fewer people know the company by its full legal name (Apple Inc.) than by its product line’s nickname among consumers- “i” products like iPhones, iPads, iPods, and iMacs. Calling your business by a nickname is not always the right choice, but it has an important advantage that every entrepreneur should know about.
Here are four reasons why you should give your business a nickname
It’s easier to remember
Many people have difficulty remembering names and spelling them correctly when they’re just trying to find you online or in the phone book.
A strong, memorable nickname for your business can serve as an easy-to-remember substitute for its full legal name. That makes your business more accessible and profitable.
Examples of this include Staples , which does $25 billion per year in revenue under its full legal name (Staples Inc.), but whose customers probably think of it interchangeably as simply “Staples” or the more abstract “the office superstore.”
It’s easier to say
The most common way that people find out about new businesses is through word of mouth. Peer-to-peer conversations are often one-sided, with an entrepreneur starting off by making a personal introduction and using their business’s legal name in conversation.
A customer who wants to refer your company to a friend might use your nickname instead because it takes less effort for them to remember.
Many companies have thrived on this dynamic with little if any additional marketing dollars spent at all, simply because they gave their business a recognizable nickname early on. Freshbooks , Mint , Xero , QuickBooks , and so many others have benefitted from this effect.
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It’s easier to share
A nickname can even make it easier for customers to share your business with others, which is the basis of all word-of-mouth marketing. People often want to tell their friends about a small business they like, but struggle to find the words; “It’s like Uber , except you just pay per ride” might be the perfect way to describe Lyft or Sidecar , but it will never happen if that brand name isn’t memorable enough in the first place.
Giving your business a name that people can reproduce in conversation makes it easy for them to spread awareness of what you’re doing.
It makes you look more familiar
Customers are more likely to trust you if they feel like they already know you. That sense of familiarity is increased by giving your business a nickname, because it makes the company more accessible and approachable. That means more people will want to do business with you, and it helps more people find you when they’re searching for a small business like yours.
Your nickname is your company’s face to the world- put some work into making it look trustworthy and approachable.
These four reasons illustrate why many companies opt to give their business a nickname rather than using its full legal name; after all, we’ve seen entire multi-billion dollar industries built around names like “iTunes” and “Xero.” But this strategy is not always effective; businesses need to be thoughtful about their choices.
It only takes a few bad examples to make customers wary of buying from any company that uses a nickname instead of its formal name (e.g., Kodak Photo Center ). Not every company needs a nickname, but every business has the opportunity to give itself one.