Twice in the past two months, public companies in Minnesota have renamed themselves.
They were not exactly household names. But big or small, a company’s name becomes part of its corporate currency. So no corporate name change is undertaken lightly.
“It’s the most important strategic asset a company has,” said Twin Cities-based branding expert Mollie Young. Competitors can hire away salespeople, copy business practices or imitate marketing, but a name is protected and can’t be copied or stolen. “It’s the one thing that can’t be replicated,” Young said.
Sometimes companies come to the conclusion that their business has changed so profoundly that a new name is warranted. That was the case with Rimage Corp. and HickoryTech, both relatively small companies in the technology sector.
On Sept. 16, Rimage Corp. officially became Qumu Corp. and on Oct. 7 Mankato-based HickoryTech, which traces its roots back more than 100 years, proposed a name change to Enventis.
Edina-based Rimage provides secure delivery of digital content. As Qumu (“cue-moo’’), it will focus more on the faster-growing corporate video communications market.
“Our new corporate identity and website are designed to help us capitalize on our success to date and drive further awareness of Qumu,” Sherman Black, CEO of Qumu, said in a statement. The company ticker symbol also was changed from “RIMG’’ to “QUMU.’’ Investors can’t complain so far. Qumu’s shares are up 28.9 percent to $14.10 since the name change.
HickoryTech was founded in 1898 as Mankato Citizen’s Telephone Co. and changed to HickoryTech Corp. in 1985. It has since morphed from a local telephone company into a provider of broadband services connecting business and residential customers across the Upper Midwest.
“We have transformed from a local telephone company into a regional communications provider,” HickoryTech President and CEO John Finke told shareholders in a statement explaining the change. “The timing is right.’’
Yet the name change has been years in the making. HickoryTech acquired Enventis Telecom in 2006. Enventis spokesperson Jennifer Spaude said the companies have been operating under dual brands since then. As the company has grown, the Enventis and HickoryTech markets have converged.
“Our boundaries were bumping up against each other,” Spaude said in an interview. An extensive brand perception survey involving customers, employees, shareholders and even perspective customers began in January. The conclusion?
The Enventis name “most clearly articulates who we are,” Spaude said. But what does Enventis mean? “The meaning of Enventis has evolved,” she added. “Enventis today means business and broadband solutions provider.”
Young, a founding principal of Edina-based Nametag International, was not involved in the Enventis name change. But she agrees with the strategy.
“By unifying under a single brand of Enventis, it gives them the opportunity to really create a powerful, focused message of a single entity that has a lot of reach.”
The company officially launched the brand-name switch this month, but the corporate name change and a new stock symbol — from HTCO to ENVE — will become official with shareholder approval at the company’s annual meeting in May 2014.
Young says there are three main reasons a company would change its name:
• A change in the strategic direction of the organization, or the organization simply outgrows its name. (Rimage changing its name to Qumu is an example.)
• The company goes through a joint venture or an acquisition and needs to choose a unified name for the marketplace. (HickoryTech to Enventis).
• Legal reasons or trademark issues that compel the company to change its name, or the brand or company has been tainted by singular events. (General Motors Acceptance Corp., or GMAC, changed its name to Ally Bank in 2009 after GM filed for bankruptcy. )
In the past year, two more Minnesota-based companies have changed names. In August 2012 Xata Corp. changed its name to XRS Corp., which stands for Xata Road Science. While the change was more subtle than Enventis or Qumu, it also marked a strategic shift for the Eden Prairie-based supplier of fleet-management software for the trucking industry.
Along with its new name, the company introduced a new all-mobile platform designed to help operators capture the data they need to keep drivers and fleets compliant and to cut costs.
“Our new name honors Xata’s proud history while reflecting our breakthrough new mobile technology,” XRS Chief Executive Jay Coughlan told shareholders.
Sometimes a name change is just the beginning. In November 2012, Navarre Corp., a New Hope-based e-commerce company, acquired Texas-based Speed FC, a provider of e-commerce services to online retailers and marketers. Less than a year later the company changed its name to Speed Commerce and its ticker symbol from NAVR to SPDC. This was after the company announced in June that it would move its headquarters to Texas.
The most notable of corporate name changes in Minnesota occurred in January of 2000 when Dayton Hudson Corp. officially changed its name to Target Corp.
To this day, some Dayton’s loyalists resent the change. But by 2000, the company’s Target division, which started in 1962, accounted for 80 percent of the company’s sales and the Target brand was the more recognized nationally.