At social events everyone has a rather difficult time remembering names. Some are better at it than others, but overall it's challenging for people. One study done on the subject reported that people who had to study biographies remembered the subject's job first (69%), followed by their hobbies (68%), their home towns (62%) and then, finally, their first name (31%) and their last name (30%).
There are different theories as to why this is. But the most popular explanation is that names are mostly arbitrary. We become used to the fact that there is no common trait for people named Dave or guys named John. And because of this their last name--which is probably more unique--falls away forgotten along with the first.
There's a parallel here for company names. A drive around any city calls this to mind. Take pizza joints: we've become so used to seeing "so and so's famous pizza", or anything for that matter next to "pizza" that we largely forget the entire name. "Pizza" is the equivalent to "Dave" and whatever's next to it is the equivalent of the last name. The whole thing, like a person's name, becomes difficult to remember.
Recall is helped from being bold and unique either in name or in execution. This doesn't give license to be weird, but it does give way for smart creativity.
As is always the case, the brand makes the name. And people, it turns out, have the ability to associate desired meaning to seemingly unconnected things if the execution and personality is worth re-occurring patronage. Virgin can be an airline. Puma can be shoes. Paul Smith can be a luxury shirt. This is freeing for entrepreneurs and brand creators.
There's the unique single word: IKEA, Cisco, Twitter, Usher, Pandora and IDEO. It's helpful to be first here. Flickr was among the first to adopt the web-trend of dropping vowels, which was great for them. But this is now becoming so common that the pizza joint example above starts to come to mind.
Then there's the friendship name ability that Al Ries once wrote about; the ability to shorten something and make it personal with a nickname. Much like how Michael becomes Mike. And how Walt Disney becomes Disney. This is a big, successful category: American Express, Coca-Cola, Mercedes-Benz, Louis Vuitton and Harley-Davidson all have this ability of easy shortening. (But it's sometimes disappointing when a company assumes their friendship name fully and drops the full name--such as AOL and JWT. And sometimes not: IBM.)
Then there's a final category that is always fascinating: the strange phrase or association that shouldn't be easy to remember but it is. In music, take A Tribe Called Quest. In engineering, take CH2M Hill. In book titles, take The Hitchhiker's Guide To The Galaxy. Not very common, but terrific when they hit.