SYLVAN LEARNING Systems Inc. has something many companies can only dream of -- a brand name so well known that most consumers recognize it.
Tomorrow, the Baltimore company starts from scratch.
It will announce that it's now calling itself Laureate Education Inc., a switch made necessary a year ago when officials sold their familiar tutoring centers and other kindergarten-to-12th-grade businesses to focus on running foreign and online universities. New York-based investment fund Apollo Management LP, the buyer of the tutoring business, got the Sylvan label as part of the deal.
Jettisoning a respected name is a tricky -- and unusual -- event, generally prompted by mergers rather than reorganizations. But for Laureate, it's not as much of a gamble as the sale itself, and investors responded well to that change, tripling the company's stock price since the deal was announced in March last year.
Still, the newly slimmed down higher education company was met with a challenge that regularly faces international firms in need of identification for themselves, a product or a division: It had to find a name that was unclaimed, that conveys the proper sentiment and doesn't sound stupid in the multiple languages in which it does business.
"The first thing you learn is just about everything with a vowel is taken," said Douglas L. Becker, Laureate's chairman and chief executive officer.
He's gleeful that the company ended up not only with vowels -- five, in fact -- but a real word that suggests achievement and conjures images of Nobel prizes. He didn't want to make something up as many companies have done to more easily secure an exclusive trademark.
"Active" trademark registrations are held on more than a million names, slogans and logos through the U.S. Patent and Trademark Office, and that doesn't begin to count state and foreign inventories.
"We literally go through thousands of ideas to find one name that's available," said Julie Curhan Cottineau, managing director for naming at New York-based Interbrand Corp., the largest branding company in the world.
It's harder when the name has to work globally: One finalist for a nutritional drink that Interbrand was helping to title turned out to mean "weakling" in some foreign markets. (It didn't make the cut.)
The attempt to be unobjectionable as well as different helps explain why coined monikers -- from Accenture to Xerox -- have been a standard part of the corporate name game for years, but Laureate executives aren't the only ones refusing to play.
More than half the marketers surveyed by Interbrand two years ago expected to see a trend toward real names, either dictionary words by themselves or stuck together, like Master- Card.
No matter what's popular, some consultants try to talk corporations out of renaming themselves except in extreme cases. Branders say people are naturally biased toward things they've heard of already.
`Equity in the name'
"It's best to keep a name that you've established, unless there's some horrible mishap," said David Burd, owner of the Naming Co. in East Stroudsburg, Pa. "There's equity in the name."
That's particularly true for a public company chasing investment dollars.
Becker, the Laureate chairman, will open the Nasdaq stock market tomorrow in New York as part of the company's public awareness campaign -- its ticker symbol, formerly SLVN, will change to LAUR on Tuesday.
"The issues of brand and brand recognition apply in the investment world as much as they apply in the consumer world," said Trace Urdan, education analyst at ThinkEquity Partners in San Francisco.
Paula R. Singer, president of online higher education for Laureate, said the management team had invested so much time into making the original name a known brand that "it was a hard thing to give up."
But in the United States, it was largely recognized for tutoring, she said. Nine out of 10 middle-class mothers in America know of Sylvan Learning Center, according to that company's regular surveys of its target demographic, and so the word "Sylvan" is strongly associated with education for youth.
"Rather than trying to stretch that brand to mean all things to all people, we had a chance to create a new brand," Becker said.
It's not the only company leaving Sylvan behind. Sylvan Education Solutions, which provides supplemental instructional programs to schools and was sold to Apollo along with the tutoring centers, changed to Catapult Learning this month. Having similar names sometimes caused confusion for the sister companies doing different work in the same field.
The tutoring centers, 80 percent of which are sold to franchisees, still will operate under the Sylvan name.
Its origins are amusingly uncomplicated: The centers took their name from the Oregon office park where the business began.