Financially Responsible Marketing

Doing an M&A? Is brand part of the conversation?

Posted by on Jun 17, 2015

 

Of all the decisions that senior executives move through before and during a merger, the branding one is often neglected or outright ignored. During the heat of a merger may not be the right time to have this conversation but have it you must.

Branding is not only the platform for all communication but also the essence of your business; without a strong brand, communication suffers, mergers struggle. Mistrust builds; relationships become strained; synergies don’t appear. It’s no wonder M&As can erode value instead of build it.

The time to have this conversation is with your newly merged leadership team.  This is an ideal project to bridge corporate cultures so you can build a powerful brand together and send a clear signal to the world about your new organization. Once you have your new brand strategy in place you can begin the difficult task of bringing two separate organizations together, constructively and setting the stage for growth.

Building Your Brand

Three Main Options: Branding for your M&A

There are three main options. You can dual-brand using both brand names for a period of time, select one of the current brand names, or create a new brand. How do you decide?

Your first step will be to conduct a brand assessment. You need to know the value of the brands you have, the potential business risks and opportunities ahead.

 

Four Steps to Determine Your New (or not-so-new) Brand

Assessing your current brands and choosing what you will do going forward is both art and science. Many of the questions below will not easily yield quantifiable answers – there is rarely a clear undeniable answer to a branding question. But this process will help you to clarify the advantages of each option. As well, just having this conversation will give your team a jump-start on building both a powerful brand and organization.

 

Step 1: Evaluate Current Brand Value

Ask yourself these questions to narrow in on the advantages and weaknesses of each of your brands.

  1. What is the current value of each of the brands? Does one brand have more market presence than the other?  What is the reputation of each of the brands?  Is one more respected than the other?
  2. Are there any positive or negative perceptions of either brand with potential investors in terms of financial solvency? If negative, can these be overcome?
  3. What is the awareness and recognition of each brand with current customers? Is there a risk of losing customers if the name is changed? If so, what is your risk mitigation strategy to manage customer retention?

 

Step 2: Assess Fit with Future Expansion Plans

If you’re working on an M&A, you have a good idea of where both businesses are now. But where are you planning to go? What are the potential areas of expansion, in terms of   categories/sectors, other markets, national or international?

Now think about whether either of the brand names hinders this expansion. For example, does each brand name translate well internationally? Is it broad enough to work across multiple categories or sectors?

 

Step 3: Understand the Impact on Employee Engagement

The chosen brand sends a powerful message to employees. In one of the more common scenarios, when the brand of the larger organization is retained and the brand of the smaller organization disappears employees of the smaller organization can often feel as if they have been dismissed, or undervalued. Should you take that route, what is your strategy to retain top talent to mitigate risk?  How can you use change management tools to transition employees to the new organization and culture?

 

Step 4: Narrowing in on the Brand Strategy

Regardless of the brand chosen, you need to think about a new brand strategy. This strategy sets the course of your strategic plan.  What will be the vision, mission and values of the newly merged or acquired organization? What is the value proposition? What is the visual identity, and how will it be integrated across all marketing and communication channels?

 

Whatever you decide whether it is to dual-brand, use an existing brand or creating a new brand, just having the conversation improves your rate of success significantly.  It can bring teams together versus divide them, it can build brands versus destroy them, it can grow business versus erode business – so make sure brand is part of the conversation.