Name Change 101

They were called Aquadots.

Last holiday season, cable television networks with my kids’ ear started advertising a new product. The concept seemed pretty simple: The young “artist” used what amounted to an oversized syringe to squirt colored gel dots onto a special “canvas.” Think of a gooey “Light Bright” (remember those?).

Well, just like Light Bright, kiddos swallowed a fair number of the squishy blobs, confusing them with a delicious M&Ms treat.

For most incidents like this, unless there is a risk for bowel obstruction, the problem—uh—passes all on its own within a couple of days.

No permanent harm done.

But these little blobs were different. Apparently, no one at Aquadots HQ thought little kids would eat bite-sized candy-mimicking morsels, or bothered to test the product for toxicity. As it turns out, they did, and they were.

Scientists in Australia found that the chemical coating on the beads, when swallowed, metabolizes into gamma hydroxy butyrate—the “date rape” drug. Yikes.

The ensuing recall spooked parents already jittery over lead-based contamination from China. It took little time for moms to blacklist the product and ruin the product image forever.

I, like most dads only casually aware of the outrage, put it out of my mind. That is, until my wife saw an ad on the Cartoon Network for “Pixos.” Almost immediately, she yelled across to my home office: “Hey, they renamed Aquadots! They’re back! How could they do that? Don’t they think we’d remember?”

After hearing my wife’s comments and hitting the online bulletin boards, I quickly learned that the similarity was no accident: Aquadots were re-engineered (into non-toxic candy-mimicking blobs) and christened “Pixos” just ahead of the holiday rush.

The marketer in me can see their point: Sales numbers told them people took to the idea, but a supply chain oversight sank their chances in ’07. The hope was that people would remember the product positively, and not associate it with its negative erstwhile name.

A classic case of “the idea is good, but the packaging was bad.”

This sentiment was echoed by the official company line (from the Pixos.com Web site). To paraphrase, the company is going to great lengths to assure customers that the “great play experience” will remain the same, and that the product has been rigorously tested by real-life scientists!

Before I humbly render a verdict, let me share a couple of scenarios in which the name change of a product is called for, and even beneficial, and conversely when it is not, or could be considered deceitful.

Scenario 1: The company (or product) has fundamentally changed. It is no longer what the original founder or invented created, and the name no longer represents the new reality in the eyes of its customers. In that case, a new name makes good business sense. From a branding perspective, the name is the focal point of all communication efforts—it must accurately reflect the true nature of the company or product.

Scenario 2: The company (or product) has changed hands, or merged with, another line—whether competitive or complementary. That makes sense as well. The new business relationship may not be in sync with the new brand, and a reintroduction is in order. It is a chance for the new entity to stake out a new, and more reflective, value proposition.

But the Aquadots-to-Pixos transition doesn’t pass the smell test.

As much as I can understand the want to put the past behind them, and launch what they feel to be a solid product that got caught in an unfortunate turn of events, it is hard to not feel as though the move is a bit deceptive.

Moms have a long collective memory. Do something that puts kids at risk, and you risk their collective pocketbook wrath.

A better choice? Do what the politicians do. It might seem an odd juxtaposition, but think about it for a second: When politicians really screws up—I mean really screws up—what choice do they have? They can’t change their name. They need to reinvent themselves.

And that’s exactly what Aquadots needed to do. They needed to come clean with American parents. To tell them they understood what happened and have taken specific steps to ensure it would not happen again.

Then you might have a chance. Albeit slim. But at least you won’t come off as trying to hoodwink parents.

Simply flashing a “safety tested” banner across your Pixos ad when word leaked is not good enough.

As it stands, the analytics are likely to paint a scattered picture. Retail sales across the board are trending much lower, and it will be hard for the folks at Pixos to know what effect, if any, their naming scheme had on sales, or if the whole thing backfired. In other words, they might look at bad numbers this year, and conclude this fiasco had nothing to do with it.

Maybe.

All I know is that seeding distrust—however unintentional—is not a welcome holiday treat.

Kinko’s. 1970-2008. R.I.P.

As someone who loves good corporate names, this is a sad day.

The folks at FedEx, who purchased the ubiquitous Kinko’s chain in 2004 for $2.4 billion, saw no further use for the “FedEx Kinko’s” combination. The new name, FedEx Office, officially wipes Kinko’s off the corporate landscape.

Founded in 1970 with one location in the college neighborhood of Isla Vista in Santa Barbara, California, “kinko” apparently was the nickname of curly haired founder Paul Orfalea. The catchy “Kinko’s Copies” literally invented the “mobile office” business concept; the funny name (in no small part) helping burn the idea into the minds of millions of office wonks.

From its humble roots, the first store sported a single copy machine on the sidewalk and a storefront stocked with extra notebooks and paper borrowed from friends, the Kinko’s chain pioneered several firsts:

Kinko’s was the first chain to popularize “rental” computers for college and business use away from the home or office. For many of us, it’s hard to remember a day without computers in every room of the home, but in the 1980s, that was hardly the case.

Kinko’s was the first chain to publicly encounter the wrath of the publishing industry. Similar to the pickle Napster found itself in years later, textbook companies went after Kinko’s—who made copying easy and cheap for millions of destitute college students—for enabling copyright infringement.

Kinko’s was the first chain to see the potential of the burgeoning mobile office culture in the 1990s, reworking its business model in the process. (My own college Kinko’s in Eau Claire, Wisconsin moved its location off Water Street near campus to a location in the business district.)

And that last business innovation is where it caught the eye of a hungry FedEx.

Given the strong history and recognition for the Kinko’s brand, it might seem a bit silly at best or egotistical at worst, to ditch the catchy name in favor of a dry corporate extension. But FedEx has a plan, and it is a good one. Exploring the strategy and rationale behind the change gives us an insight into a rapidly expanding mobile office market.

Step One: Give FedEx a storefront presence. Although businesspeople certainly knew of FedEx, they saw the company as a shipping provider, and certainly not in the “retail” sense. Simply remaking all Kinko’s locations “FedEx” stores in the early takeover days of 2004 would have been disastrous. No one saw FedEx in that way, and the transition would have been rough.

Step Two: The retail brand transition. In other words, we’ve all seen “half-and-half” corporate name or logo transitions. For months and sometimes years, old letterhead, old forms, and old signs prevail. Customers end up with a mixed message of who the company is at best, or give customers a reason to lose faith in the brand at worst.

FedEx was not about to flush $2.4 billion down the toilet.

Back in ’04, in the early days of the transition to FedEx Kinko’s, I paid a visit to my local Kinko’s location on Robert Street in West St. Paul. The staff there certainly drank the “change” Kool-Aid. They spent those early days rooting out any sign of the old Kinko’s—the old funny typeface, the kitschy slogans, and the innumerable in-store signs. If the corporate folks saw evidence of the old Kinko’s, employees knew they were in deep trouble.

It wasn’t that FedEx wanted to be an overbearing corporate parent, but they knew the successful transition would help the company establish its new found entry into the mobile office market.

During the “FedEx Kinko’s” days, from a visual perspective, the company leveraged only the name. And that was the perfect transition requirement. The completely revised visual and in-store presentation teamed with a renewed emphasis on office supply sales to compete with big box chains Office Max and Staples, and used the name as the one lifeline from one brand to the next.

Step Three: The end game—purge Kinko’s altogether. Although employees at my local Kinko’s (I guess “FedEx Office” now) don’t have that same fear of the corporate god they did four years ago, the transition is well underway right now. The single brand, at this point, makes sense: It focuses attention solely on the FedEx name.

What’s the result?

In less than four years, FedEx completely transformed its brand. From a brand known best as a provider of overnight shipping, the company’s 2,000 storefront locations transformed it into a retail business icon. FedEx recognized the growing need of the mobile workforce to have a “support base” to create, print, and deliver documents and presentations. Put simply, shipping alone just was not going to be enough.

And if imitation is the highest form of flattery, copycat strategies abound.

UPS tried buying Mailboxes Etc., but the chain was too small to impact brand perception or real bottom line results in any meaningful way. Office Max and Staples tried adding shipping, copy, and print functions to their big box retail locations, but they are having trouble creating the “service environment” versus a “buy this” big box retail environment that will draw in the new mobile professional.

FedEx Office is the business professional’s destination, perfectly positioned for the new mode of work life.

A very, very smart move. Well planned. And well executed.

But, alas, I still miss Kinko’s.

From Strangely Unique (Gluek’s) to Positively Ordinary (Cold Spring)

Being in the brewery business today is not easy.

The competition for the U.S. alcoholic beverage market remains intense. Beer is a core product, followed closely by wine and other spirits.  It all depends on who you are, where you live, how much you make, and in which circles you socialize.  Suffice to say, big beverage has you pretty well pegged.

Older consumers are bombarded with advertising from massive beverage conglomerates.  Tastes and habits tend to be pretty well entrenched by the mid-thirties, and getting people to switch after that age is difficult.  (It is not just the difference between "wine drinkers" and "beer drinkers." Think much narrower:  A Bud Light drinker is not a Miller Lite drinker, etc.)  Given that reality, large beverage marketers (Diageo, Anheuser-Busch, etc.) can and do pour billions into developing new product extensions, infiltrating the bar/restaurant business channel, and providing direct incentives - all to move a few percentage clicks into someone else's market share.

Brutal.

The younger consumer market is no easier.  While their tastes may not be as well defined, they trend much more fickle.  If Guinness is "in" for the youth set, its sales are up.  If Guinness is "out," its sales are down.  Simple, and unpredictable.  To make matters more complex, the traditional "beer, wine, and spirits" options - while popular - are no longer an exhaustive set of choices.  Hard ciders and lemonades got their start here.  Coffee mixers are on their way.  And alcoholic energy drinks are a huge niche market (e.g. Red Bull and Vodka, etc.).

So what is a small competitor to do?

Little Gluek's Brewing Company, a Minnesota-based brewery (one of the only ones left), is making a good show of it.

As a small competitor (not small by "ultra-microbrew" standards, but a speck on the eye of Anheuser-Busch), Gluek's ran with the only viable strategy available: Niche marketing.

Banking on the micro/local-brew strategy as a wedge issue in its regional market, Gluek's has the product lines people in this area want: Pale Ales, an Ebony Wheat, Honey Almond, Pilsners, Lights, Ices, and Lagers.

Add to that a line of Pub Pints and Hard Lemonades, and Gluek's has an answer to these sustaining trends in the industry.  Better yet, from a product management perspective, the company has staked out a solid position in the energy drink market.  In fact, if you play with the math a bit, Gluek's maintains almost a dominant position in this sub-market.  Clearly, Gluek's is no Red Bull, but they have a good answer to a popular trend.

Any way you look at it, Gluek's offers a very complete line.  It gives its distribution partners ample ammunition to sell within both major and niche retailers, bars and restaurants, and specialty resellers.  In the Minnesota regional market, both older and younger consumers can find something they like.  And they know it.  Gluek's, astutely, plays its local card to maximum advantage.  The company is well positioned to capitalize on the "buy local" trend made popular, in part, by organic foods and farmer's markets.

You could make an argument Gluek's makes all the right decisions.

Save one.

Changing its brand name.

In 2008, after over 150 years, Gluek's Brewing Company changed its name to Cold Spring Brewery.

The company's stated reasons were pretty clear, and on their surface, sensible.

A proud and grateful corporate resident of pretty Cold Spring, Minnesota, the company wished to forge a deeper tie with the town.  What better way than to name itself after its host?  Seems reasonable.  Additionally, the name "Cold Spring" highlights the purity of the water source, and by association, the quality of the beer itself.  Again, a reasonable assumption.

A phonetics expert could even make a solid case against the name "Gluek's."  It is hard to say correctly unless you have heard it before.  And besides, most naming experts would advise against building a brand name containing embedded negative words ("lick," "ick," "eck," or "ook," depending on your pronunciation).  Finally, Gluek's sounds too "Northwoods," effectively limiting its overall market potential.

Besides, new management had just saved the family of brands from a slow, painful death at the hands of their disinterested corporate owner (G. Heileman Brewing Company of LaCrosse, Wisconsin).  The new owners wanted to make some changes.  Infuse some fresh energy.

It all sounds very sensible.

And all faulty.

First, dispensing with over 150 years of history should not be done lightly.  The name and the tradition are a source of pride and uniqueness is a sea of bland corporate shells.  Gluek's has character built in.  Cold Spring does not.

Second, phonetics rules are made to be broken.  It is the Northwoods character that made Gluek's unique.  Yes, it may limit its overall market potential, but the Gluek's name is not responsible for that.  The answer in niche marketing is not to try to copy the number one and number two in the industry, but rather to make yourself stand out.  Gluek's stands out.  Cold Spring does not.

Third, in order to reach into the youth market, especially with an aggressive push into the energy drink sub-market, you need something special.  Something that will make people feel unique when they are drinking it.  Without a multi-million dollar advertising budget, word-of-mouth is your best friend.  And word-of-mouth requires a memorable catch phrase.  Gluek's, you remember.  Cold Spring, you forget.

The underlying theme is simple: The cardinal sin in branding is not pronunciation trouble, or campy regional flare, or a patchy corporate history.  It is being forgotten.

Naming is actually pretty simple.  There is only one rule: Never be confused with anything else. Cold Spring? Bottled water or beer?  Without knowing better, my money would be on the water bottler.

Cold Spring, as a name, was the safe choice.  It sounded nice.  It made people feel good.  But it was not good branding.

And that's too bad.  If we don't want our every beverage option to come from our friends at Anheuser-Busch, I wish Cold Spring good luck.

A Plum Worth More Than Gold

There was a time when having a Gold card meant something.

To obtain one (a Gold VISA or Gold MasterCard) meant you had achieved a certain point in life.  A certain level of income.  A certain net worth. The Gold card symbolized elite status in a world where not everyone had a credit card, and there were not that many ways to get one.

Then sometime in early 1990s, the Gold card started to lose its luster (we never really had a "silver" or a "bronze" phase; I am not sure they would have taken off anyway). When even entry-level employees (and, sadly, too many college students) had credit cards, and mid-level managers had Gold cards, the financial elite needed something more to emotionally separate themselves from the rest of us.

Enter the Platinum card.

Never mind the actual value of platinum on the world market. That didn't matter. It just sounded better.  (As an interesting aside, the rise of the "Platinum" card has marked an increase in popularity of everything Platinum. There was a very limited market for platinum jewelry in the 1980s. Not so today.)

But, of course, you know how the story ends. Platinum hasn't seemed good enough either. Now we have "Diamond" cards. They are even better, one supposes. But any child can see the logical end quickly approaching. A "Moon Rock" card seems pretty nonsensical, but then again, I have been surprised before.

What really has developed is a market full of a dizzying array of options—each trying to paint an emotional or financial wedge. Airline miles. Cash rewards. Hotel bonuses. Cheaper gas. Big box retailers. Your favorite mall store. Your local grocer. And those are just some of the common ones; other options focus solely on affinity; nearly all major colleges offer credit cards, as do many charities. You can even get a card with your favorite zoo animal.

Into this crazy, mixed-up market, American Express has launched the "Plum" card.

A tongue in check reference to a "plum" deal, the company has scheduled only 10,000 cards in its initial release (seemingly a large number, but it has nonetheless inspired a certain amount of scarcity marketing jealously—very nice). Of course, the card is "plum" colored, somewhat unique among credit cards on the market today.

The color, in and of itself, is not what makes the idea work. Colors are a limited and quickly exhausted source of ideas (who wants a "Brown" card?).

Also comparatively unimportant are the unique terms: Deferred payment and early pay discounts. These are easily copied.

More to the point, however, is how American Express is working to prove the Plum card's unique value proposition. Company advertising focuses not on the card itself, but on the companies receiving them, of course focusing on the unique businesses that play well in television and internet advertising campaigns. 

As credit card options have become increasing difficult to understand, many people simply have given up. They assume most credit card offers and terms are essentially the same. That any rewards offered will prove largely phantom. That the penalties will be brutal.

American Express takes advantage of our collective skepticism of specifics, calling attention instead to the people and companies getting the card and what they are doing with it.  It makes for more interesting television ("What's in your wallet?" ads were entertaining only the first couple of times) and creates a stronger emotional connection.

What's more, the strategy falls neatly in line with American Express strategy since the 1980s: Membership has its privileges. Back in the day where the iconic green American Express card meant no pre-set spending limit (along with a hefty annual fee), cardholders felt a real emotional attachment to it. And although that card still exists, American Express got sucked into revolving debt credit cards and affinity gimmicks like all the others, with the effect of diminishing their brand position and relegating their former "elite brand" to also-ran status, well behind top-players Citi and Bank of America.

In other words, American Express went back to well for some of their old positioning genius. They managed to make everyone else seem generic by comparison by focusing on an emotional connection—the people with the card— and not the card itself.

For their sake, I hope we are not all too jaded by credit card junk mail to be impressed.