Rebranding a company can be a painful business

My parents named me after a television character – Jody, from that late-’60s, single-parent comedy, Family Affair. Remember Jody and Buffy and Mr. French? Well, the kids in my third-grade class sure didn’t. They only remembered that Jody was a girl’s name, a fact I was reminded of every day on the playground. Thus I decided, when I switched schools in the fourth grade, to rebrand under the much more boyish moniker of Joe. I thought the transformation would grant me acceptance into the inner sanctum of popularity.

The process was relatively easy (and equally meaningless) on the playground. But at home, my parents were hurt, and my aunt even refused to call me Joe, so emotionally tied were they to the image of little Jody, their cute blond kid. Rebranding a company can be just as painful. Yet, alongside premature IPOs and budget-busting television ads, corporate trans appellations have become a popular ingredient of New Economy branding strategies in recent years.

Today’s Luminant Worldwide was yesterday’s Clarant Worldwide. Before that, the company, ironically a Web marketing firm, was known as Radiant Worldwide. And before Radiant, the company was known simply as Clarant. Whew. Considering the cost and the hassles – which range from filing complicated forms with the Securities and Exchange Commission if the company is already public, to convincing customers that the company isn’t hiding from litigators – is a name change worth it?

Consider the case of Encoding.com. Most consumers thought the Seattle-based company was about translating one type of video or audio file into another. But no, complained the company, we’re much more. We’re a “streaming media infrastructure provider.” To prove it, the company changed its name to Loudeye Technologies.

“It was painful,” recalls Doug Schulze, Loudeye’s vice president of marketing. “It’s the kind of thing you want to put off because it’s an emotional process, and change of any type is difficult. A lot of people were really tied to the old name. But the change was necessary.”

According to Schulze, the company’s original name was “limiting in scope.” By contrast, he believes Loudeye “emanates our personality of being hip and unconventional and passionate about what we do.” The name also touched on the company’s core business – technologies for ears and eyes – without implying a limit to the company’s model.

Was the change worth the hassle? “Absolutely,” says Schulze. Did it bring new business? “Hard to say,” says Schulze, who admits that the company’s relative obscurity at the time of the change at least made the process easier.

TV commercials vs email

Email has always been a staple of online marketing, but usually as a spoke of an ad campaign, never the hub. But no more. The medium has heated up all year, and it could be the hit of the next ad season. And no wonder. It’s cheap. It’s efficient. It’s effective. And it’s everywhere.

According to eMarketer, a New York company that aggregates and analyzes e-commerce data, an estimated 94 percent of all Internet users have email, and those adults and teenagers who use the medium account for an impressive 75 percent of the total U.S. population. Marketers spent millions on email marketing, and estimates about future spending soar.

A majority dollars were sunk into more than 40 billion permission-style email messages, while another 38.5 billion went into general “spam” email pitches. Response rates for permission-based marketing messages handily beat out banner click-throughs -an 11.5 percent response rate for permission email versus just 0.55 percent for banners – and the costs of the email ads averaged just 25 cents each.

Traditional direct-mail methods – fliers, coupon cards, and the like – average 50 cents to $2 a pop.

That’s why, in belt-tightening times, companies of every stripe are betting on email marketing like never before. “Instead of throwing all that money at indiscriminate branding efforts, such as TV commercials or banner ads, email is becoming a more attractive alternative to marketers, especially when it comes to retaining customers,” says Gary Galati, a director at eMarketer.

“In the interactive environment, where competition is just a click away, you have to forge bonds with your customers. Maintaining a dialogue through email is a promising way to do that. At this point, there’s really nothing better.”