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In times of uncertainty, people will try to avoid anything that appears risky, preferring to stick to safer, familiar options. Research has shown that if something appears familiar people are more easily persuaded that what is being offered is a good and safe option. But how do we know if something is familiar? Often we rely on a simple shortcut: how easy it is to pronounce! If a name is easy to pronounce it is often considered more familiar and therefore a safer option.

In one recent study, researchers from the University of Michigan demonstrated this by giving people a list of completely fictitious food additives and asking them to rate how harmful they were. Even though all the words contained 12 letters, people rated the difficult to pronounce additives as being more harmful. In a second study, people were asked to rate how risky and therefore exciting a range of rollercoasters were just by being told their names. The easier a ride’s name was to pronounce the less fast and less exciting people perceived it to be. These results show that people are often persuaded that difficult to pronounce items are more risky.

This phenomenon also applies to company names. In a series of studies, researchers selected 89 companies at random whose shares were traded on the Stock Exchange and who had their IPO between 1990 and 2004. They then looked at the relationship between how easy the company name was to pronounce and its performance one week, six months and one year after the initial public offering. Amazingly, they found that investing £1,000 in the ten easiest to pronounce companies on the list generated a 33 per cent better return in the first year than £1,000 invested in the ten hardest to pronounce companies. The same researchers then compiled a list of 750 companies listed on the Stock Exchange and divided them into two groups based on whether or not their three letter abbreviated ticker symbol was pronounceable or unpronounceable. Incredibly, they found similar results.

So should you immediately sell your shares of the Mxyzptlk Corporation? Not quite. But these studies do emphasise how something as simple as a name can influence our decisions. If we are looking to persuade clients and consumers that we are a safe option then we would be wise to ensure that the words we use to name and describe our company and its products are easy to process and pronounce.

Steve Martin is co-author of Yes! 50 Secrets from the Science of Persuasion, scienceofyes.com

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