Successful Branding for Mergers and Acquisitions
Your company is considering a merger or acquisition. You've
explored the financial and legal ramifications. But do you
know what your point of distinction will be post-merger?
Today, mergers and acquisitions (M&A) are commonplace. They are
strategic decisions grounded in geographic expansion, product
and competency diversification, and brand leveraging. While
businesses clearly address the associated legal and financial
issues, they often overlook a critical component--brand
management. Effective brand management goes well beyond the
basic marketing tools. It requires an integrated approach to
ensure consistency of your corporate message and identity
throughout all aspects of your business. Without careful
brand management, your M&A effort is vulnerable to failure.
Simply put, brand management helps to secure stability and brand
loyalty for your company. You may consider discounting its
importance to the M&A process, but be prepared for the possible
outcomes:
* Brands are managed inconsistently and brand equity suffers
* Management and staff send mixed messages, creating confusion
in the marketplace
* Company image/brand loses value in the market
* Employee morale decreases and turnover increases
* Customers lose confidence and leave
* Competitors steal your best customers
* Shareholder price plummets
Why is brand management frequently overlooked in the M&A process?
* Companies lack the experienced resources to focus on it.
* Organizations don't realize the need to address it until it's
too late.
* Business leaders neglect it because they are concentrating on
financial and legal issues.
Hiring an outside brand management strategist can bring
dedicated resources and an independent perspective to the
process. That's why successful companies make brand management a
cornerstone in their overall M&A strategy. By incorporating
brand management in the early discussions around a merger or
acquisition, your organization will come out stronger and more
focused. Best of all, shareholders, clients, employees and the
public will remain loyal to your brand.
Nearly 50% of all mergers fail to sustain or bolster
shareholder value.
Why? Because they don't realize that brand is not an
event. It's a process. A brand management strategy ensures
that your business can withstand the challenges associated with
M&A, both today and through future market fluctuations. Working
with an outside brand management team can help you assess and
manage your company's brand in relationship to specific
competitors and the broader industry -- a crucial part of any
successful M&A effort.
Building Your Point of Distinction
Your company builds brand with every customer contact, planned
or unplanned. And, every interaction (no matter how
insignificant) makes a lasting impression. Each impression
combines with all those that have gone before to create your
brand. Every gesture, every action, every word -- every point of
contact with your customer enriches or erodes your brand.
Whether you realize it or not, if you are in business, you
have a brand and you must manage it continuously.
An effective brand management firm invests as much time in
pre-planning as it does during the M&A announcement and
post-announcement stages. They help companies by:
Understanding the business and what the original brands
were intended to represent.
Aligning this knowledge with actual market perceptions to
develop a strategic brand management plan.
Identifying the strengths, weaknesses and opportunities
associated with each company and assessing their impact on the
"new" entity and existing business.
Recommending brand management strategies that will drive
the marketing and communication initiatives for the company.
Researching and evaluating potential acquisition
candidates or merger partners by answering questions like:
o "How does the prospect's brand compare to your company's
brand?"
o "What is each brand's strongest attribute?"
o "How is the brand relevant to future customers?"
o "Which candidate will best help reach strategic objectives?"
o "Should one brand dominate or should a new brand be created?"
Determining the most beneficial identity for the new
company. Maybe it's keeping one name and getting rid of the
other as Cingular did when it acquired AT&T Wireless. Perhaps
it's combining the names like Exxon and Mobil or creating a new
name entirely as Verizon did when Bell Atlantic and GTE merged.
All have their pros and cons. Cingular had the stronger brand
recognition. For ExxonMobil, both companies boasted loyal
customers. Keeping both names enabled them to retain both client
bases. Bell Atlantic and GTE agreed to create a new wireless
business with a single, national brand. In order to affect the
change, the entity became known as Verizon.
Assessing which brands to keep/eliminate and determining
the appropriate investment in each. Retaining current brands
isn't always the most effective or cost-efficient approach.
Implementing a PR/marketing strategy to communicate the
merger to employees, clients, shareholders and the public. Brand
policies and guidelines as well as training and compliance are
critical in helping employees understand and effectively
communicate the new brand. Your brand can be one of your most
valuable business assets.
Facilitating the process of merging two cultures. How
will the cultures merge? What are the core values and
competencies of the new entity? Will the mission or philosophy
change? How will the companies leverage the best from each to
create a strong point of distinction?
Brand management is the best investment merging companies can
make.
Done properly it can help the new entity:
* Increase employee, customer, shareholder and vendor loyalty
* Integrate two companies/cultures/brands effectively
* Influence the perceived value of the effort in the market
* Manage brands more cost-efficiently
* Ensure employee commitment and confidence
* Enhance profitability
Your M&A effort requires a significant investment in time and
money. At this critical juncture, take into careful
consideration one of the most critical aspects of this effort --
your brand. Addressing brand management as an integral part of
the merger or acquisition process will help ensure your
company's success and competitive edge in the marketplace. And
ask yourself, "What will be the point of distinction for
my newly merged company?"