What should I name my company?
If you’ve been around any old school SEO advice it included naming your company something with the letter A. That’s because just like the “Yellow Pages”, lists of things on the internet were always alphabetical.
Obviously things have gotten better. You don’t have to just pick A-names for your company because the internet is so much more sophisticated now. We have all these algorithms and all this AI research. Right?
No. Not just one, but two papers from independent research teams have just found that stock trading is heavily biased by a company’s name. Since stocks are generally listed alphabetically, folks pick stocks earlier in the list rather than giving equal opportunity to discovery.
We find that early alphabet stocks are traded more frequently than later alphabet stocks and that alphabeticity also affects firm value.
Even more striking is that this effect has gotten worse since the internet. Because of the excess of information now available, folks rely even more on default options like lists that sort things alphabetically.
This is a good reminder of how irrational we can be as humans. And how important it is to be aware of these effects. Not just in stock picking. But presenting your own business and products.
We recently improved our own conversion rate on the Highrise site because we went from 4 pricing plans down to just 3. And our conversion rate jumped 70%.
I’ll be spending even more time on choices like these in our marketing.
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