Brand Merger’s + Acquisitions
Brand 1 + Brand 2 = What?
Plan your work; work your plan. It’s been said that of all the assets exchanged during a merger or acquisition, the most important is that of the brand and culture, yet most companies underestimate the challenges involved in capturing the value of these things for each organization involved in a brand integration. It’s no surprise then that research shows only one in every five mergers and acquisitions actually succeeds.
The few that do say a key factor of the success is having had a clear brand integration strategy ahead of time that outlines expectations and guidelines and has leadership sign-off. In addition, the CMO, CEO and other executives need to create and support a clear organizational structure and system of brand management that shores up the strategy and brings all the stakeholders in line with the objective of fostering long-term brand building for the newly formed entity.
More Best Practices
The type of merger does matter.
The complexity of the brand integration process depends on the type of merger that takes place. Was this the acquisition of a startup, where the acquisition was part of the business plan and employees benefit financially? Will the new owner make major changes to the organizational structure or leave it alone? Or, is the merger comprised of two well-established companies that could result in culture wars and power struggles within the organization?
Each of these scenarios will require a different strategy and approach to integrating the brands, and organizations should consider seeking outside resources and experts to help their teams define the appropriate strategy for integrating corporate cultures and communicating internally about the changes taking place.
Why did we do this?
To get employees and stakeholders behind a brand integration, management must help them understand the reasons for the merger or acquisition and the value it represents. Will the integration result in better technology, more talent or more customers? Will it block competition, enable expansion, or create more brand equity for the overall business? How does the integration solve their problems and what are the benefits to each of the key stakeholder groups?
Talk to employees and other stakeholders and let them know what to expect and what is expected of them. Avoid surprises at all cost. Make sure everyone understands the strengths, weaknesses and differences of each brand and how they work together to create a stronger, more powerful organization. Clearly communicate the new brand architecture, showing how all the pieces fit together: the master brand, sub-brand, and associated product and services.
Respect the culture.
It’s important to understand and communicate the compatibility, differences and similarities of the individual brand cultures involved in the merger or acquisition — where they naturally align and where there may be issues. New processes may be instituted on a schedule, but attitudes and behavoural norms will not change overnight.
Think of your customers first.
When companies get involved in a merger or acquisition, the employees can get so caught up in the complexities of the event that they forget about the customer. To avoid this, brand managers should keep their focus on the needs and expectations of the customer above those of the brand itself.
As early as possible, combine customer databases and conduct the necessary research to gain a comprehensive understanding of what the new customer segments are and how each brand and the overall brand portfolio can deliver value to them.