What's in a name? The former North Jersey Community Bancorp will soon find out.
The Englewood Cliffs company recently became ConnectOne Bancorp, and next month it plans to change the name of its bank to ConnectOne.
The new handle reflects a "customer-first philosophy," Frank Sorrentino 3rd, the company's chief executive, said in a brief press release. A spokeswoman said Sorrentino was unavailable to discuss the name change further.
Rebranding can have its pitfalls. Marketing experts say it can expose companies to criticism from clients who are resistant to change. It can also bring derision if the new moniker seems inauthentic or confusing.
To avoid these problems banks must carefully consider the message they want to convey and how a new name will affect daily operations.
"Every brand is empty until you fill it with an idea," says Vince Carducci, the dean of undergraduate studies at the College for Creative Studies in Detroit. "A good brand should last a long time. Coke has been Coke for 100 years."
Name changes are often unpopular, says Jeffry Pilcher, who publishes The Financial Brand, an online publication.
Rebranding can also be expensive. Consulting with a marketing firm to devise a new brand can cost up to $250,000, Pilcher says. Once a new name is chosen, it can cost up to $1 million to make the switch, including legal fees and new signs.
Banks must also realize that the name they want may already be taken. That was an issue for Talmer Bancorp in Troy, Mich., says David Provost, chairman and chief executive of its Talmer Bank and Trust unit.
Talmer, formerly First Michigan Bank, spent six months looking for a new name after Michigan First Credit Union filed a lawsuit in 2010 alleging trademark infringement.
The $2.2 billion-asset company hired a marketing firm to help with new names. It became "very excited" about one possibility, only to find that another financial institution less than a mile away had already claimed it, Provost says.
He says the name Talmer came to him "in the middle of the night." It combines Talmage, his grandfather's last name, with Merzon, the last name of the chairman's grandfather. "The name resonated with us," Provost says.
Provost says Talmer kept its rebranding costs below $250,000 by changing its name before putting up permanent signs at the failed bank branches it had bought.
Banks must make sure a name change "is indicative of a shift within the company" and "that you are trying to become something greater than you have been in the past," says Jeff Stephens, the chief executive of Creative Brand Communications.
A company's management team must do more than swap out signs and stationery, experts says. They must make sure that employees also embody the idea of connecting with clients.
For that reason, marketing experts urge banks to involve employees in the renaming process. Experts say it is vital to figure out the company's essence and its message to customers before selecting a name.
The new brand "should signal a change within the organization where they really begin to improve and develop a greater vision," Stephens says. "It should inspire an improved culture and a stronger engagement with customers."
New names should not confuse customers, either. When Talmer changed its name it received questions like "What is a Talmer?" Provost says. "It was almost like we needed to put a mascot with it."
ConnectOne conjures images of connecting with customers, using more technology and being more modern, marketing experts say. The name is also shorter, sounds less bureaucratic and could be viewed as more personal, Carducci says.
North Jersey Community Bancorp's new brand has detractors. Many banks use the words "one" or "first," creating a name that sounds financial "because so many have adopted that naming convention," Pilcher says. "The only meaningful part of the name is 'connect,' The word 'one' is a throwaway."
Removing a reference to the former North Jersey's geographic location could signal an interest to expand beyond New Jersey, experts say. All of the $883 million-asset company's branches are in the state, according to June 30 data from the Federal Deposit Insurance Corp.
Banking companies such as First Horizon (FHN) in Memphis, Tenn., and Seacoast Banking Corp. of Florida (SCBF) in Stuart changed their names when they wanted to expand geographically. Talmer said its rebranding has prepared it for expansion outside of Michigan.
"Banks that have geographically constrained names are beginning more and more to think about alternatives," says Robert Kafafian, the chief executive of the Kafafian Group. "With technology today you have the ability to bank anyone anywhere. [Banks] don't want to be constrained by a name."