Brand Name: Fancy vs Descriptive Name – which leads to success?
Businesses with fanciful, catchy, meaningless, and suggestive business names are generally more successful and performant than the businesses with meaningful and descriptive names.
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Descriptive Brand Names often Lead to Business Failure
Diapers and Soap are highly descriptive business names. It is interesting to note that Amazon worked extremely hard to make the businesses performing for seven years but eventually closed Diapers.com, and Soap.com in 2017 due to lack of profitability. [RD]
Similarly, Pets.com was a US based company but had to shutdown due to failure in becoming profitable.
There are some examples of successful businesses having descriptive names such as Booking.com but cases are very rare. In another perspective, it can be said that Booking.com might have attained more success than Airbnb if the name had not descriptive.
In my opinion, descriptive businesses names consisting of English dictionary can be successful which are primarily based in non-English countries. For example, Trip is a China based multinational company, dealing in tourism services. It is an example of successful business having descriptive name and market cap of around US $14 Billion in 2022.
If we look at market share of DNS (Domain Name System) servers, GoDaddy and Cloudflare have the largest share (27% collectively) for DNS hosting and both names are fanciful and meaningless.
On the hand, generic and descriptive brand names DNS.com, Name.com, One.com, Dealer.com collectively have less than 1% share. [RD]
Most of above examples at least clearly manifest that descriptive business names have no edge over fancy names.
Example of Bed Bed, Bath & Beyond
Bed, Bath & Beyond is a multinational American company. Its name has two major flaws - it is a highly descriptive brand with no uniqueness, secondly the brand name is too long.
Originally the name of the company was Bed 'n Bath. However the company management repeated the mistake when after expansion of products, they renamed the company by adding ‘Beyond’ word - Bed, Bath & Beyond.
The brand name is not easy to speak and easy to remember for the general public because it is too long. Single-worded brand names should always be preferred.
Eventually, on April 23, 2023, Bed, Bath & Beyond filed for bankruptcy according to Bloomberg report. There would be many other factors but in my assessment, wrong choice for the brand name played a main role behind the failure of the company.
Analyzing Names of Notable U.S. Tech Startups Facing Shutdowns
In July 2022, Crunchbase News had published a list of notable companies which have cut jobs or even shut down.
It is a long list, however, if we type the keyword ‘shut down’ in the search box, the sorted list shows following six company names are completely shut down. Please note that in coming months more names may be added to this sorted list.
WanderJaunt – (website URL wanderjaunt.com is not working )
Subspace – (www.subspace.com)
SummerBio – (www.summer.bio)
Fast – (www.fast.co)
Ahead – (www.helloahead.com)
Halcyon Health – (www.halcyonhealth.co)
If we analyze the names of above companies, we find that all brand names consist of either completely descriptive and generic words (fast, ahead) or amalgam of descriptive words. None of the names is fanciful. For example, SummerBio consist of descriptive words of ‘Summer’ and ‘Bio’ whereas WanderJaunt is amalgam of descriptive words wander and jaunt.
Some startups also made other mistakes such as weak domain names, for example, ‘Ahead’ lacks exactly matching domain name.
The list also includes other companies which are not shut down but experienced significant layoffs – including Knock (knock.com) with 46% layoffs, and Better (better.com) with 50% layoffs – both ‘knock’ and ‘better’ are descriptive and generic brand names.
I must reiterate that many other factors contribute to the failure of a startup. However, choosing a wrong (descriptive) name plays significant role in the failure of a business.
Is It Beneficial to Use Descriptive Term in Brand Name for Success?
Including a descriptive or generic word (such as pharmacy, drug, books, cars) in a brand name, provides little (if any) or no benefit in the success of a company.
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My research suggests that a fanciful (meaningless) and invented brand name can be more successful than a generic and descriptive business name.
For example, CVS, Rite Aid, and Walgreens are top American companies related to pharmacy and drugs. However, none of them completely consist of descriptive word in brand name. Please note that Rite Aid is a unique and suggestive name, not descriptive.
If we analyze data, we find that these companies have successfully acquired most other brands which had included the descriptive words such as ‘drug’ or ‘pharmacy’ in brand names. [RD]
CVS, Rite Aid, and Walgreens have acquired many other brands with descriptive names, including Arbor Drugs, Brooks Pharmacy, Big B Drugs, Drug Fair, Lane Drug, USA Drug, Wellby Super Drug.
Above analysis clearly proves my point that companies with fanciful brand names are more successful than those with descriptive brand names.
Analyzing Business Names of Largest and Successful Companies
If we analyze names of largest world companies by revenue, we can conclude that companies with fanciful, catchy, short and unique brand names are financially successful.
The names of top companies consist of only single word – for example, Walmart, Amazon, Apple, Microsoft, Alphabet (In practice Google), McKesson, Costco, Cigna, Kroger, Verizon, Shell, Anthem, Samsung, Trafigura, Honda, Toyota, Allianz, Ford, CVS, Glencore.
However, there are some rare exceptions such as Berkshire Hathaway, Home Depot, General Motors.
Most of companies use unique and fanciful brand names except some rare examples using suggestive or descriptive names such as Apple, Amazon, Home Depot, and General Motors. It is noteworthy that Apple and General Motors use unique and distinctive names for their products such as iPhone, Chevrolet.
This analysis signifies that fanciful, unique and short business names perform better in market dynamics.
More Resources
Meaningful vs Meaningless Brand Names: which are better?
Find out the Importance of Vowel Letters in a Business Name.
Should you use Acronyms or Initials in a Business Name?
Importance of Choosing a Inclusive Name for Rebranding.
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