Maintaining a Strong Brand Through M&A: Part I

You arrive at the office on a cold, blustery, autumnal day. Traffic was worse than usual; it’s eaten into your prep time. You grab a cup of coffee, already feeling rushed, and walk into your office to find a note on your desk from the CEO: “Drop by when you get in.” 

A cascade of scenarios run through your head as you head over to her office, heavily weighted towards less than favorable news.  

“Good morning! What’s up?” you ask. The uncertainty in your voice is palpable. 

“Got some great news,” she says. “Our acquisition of DistractingDisruption Inc. has been approved! Time to get rolling on integration. How’s the planning going?” 

Your stomach drops. Are you ready for the whirlwind of activity headed your way? 

Doing this right is so very important… A successful acquisition strategy can be the difference between accelerated growth and a failed merger. And yet there are so many potential pitfalls.

Among them: 

• Loss of key staff 

• Customer churn 

• Loss of productivity 

• Failed integration 

• Failure to realize the expected benefits 

• Lost partnerships 

A recent McKinsey’s study showed that while many leaders focus on HR, Operations, Finance and Sales, the most successful recognize the critical role Marketing plays in any merger or acquisition. 

“Our experience and interviews with leading M&A executives indicate that marketing plays a vital role in integration and deal success and should not be an afterthought.” 

Marketing has an essential role in defining the new vision. The Marketing team should lead the delivery of this new branding to excite and activate all stakeholders: 

“…marketing should lead the organization in developing fresh, compelling value propositions and setting the new organization’s brand strategy. Marketers should then lead the delivery of the value proposition and its narrative to generate above-market growth.” 

Are you prepared to navigate this minefield successfully? 

Getting your brand strategy right as you go through a merger or acquisition pays outsized dividends: 

• This McKinsey study shows that companies that get this right can achieve up to 60% higher revenue than those that do not; 

• Managing employee engagement will significantly reduce attrition and will engage partners and stakeholders to ensure everyone is focused on the newly formed company’s success; 

• Aligning brand and culture ensures faster integration, maintains focus, and ensures customer experiences are not negatively impacted; 

• A smooth communications strategy manages expectations, removes doubt and uncertainty, addresses fears, and creates excitement for employees, customers, and partners. 

Here are a few pointers we’ve learned along the way on how to manage this time of change, turmoil, and potential opportunity. 

Start with the big picture

Assess your brand(s) value. Evaluate the strength, reputation, and value of each brand involved in the merger. Understanding your customers’ perception, awareness, and affinity for your brands enables you to build an intentional, evidence-based plan for your brand architecture.   

Define your brand architecture. Do you retain multiple brands, create a hybrid, or consolidate all under a single brand? This will depend on many strategic factors, including your assessment of the respective brands’ values. 

Align your vision and mission. We already know that organizations with a strong sense of purpose, core values, and an overarching mission outperform their peers. As you build this new entity, it’s important to recognize you are merging what were two distinct cultures each with their own sense of purpose and agreed norms of behavior. An essential part of any merger is to realign and ensure there is a renewed and shared sense of identity across all. 

Align brand and culture

Brand and culture are inextricably linked. We explored this topic on a recent panel at Consero’s Marketing Forum in Phoenix, AZ with marketing leaders from Essence Ventures, Half Price Books, and SK Pharmteco. As many in the audience shared afterwards, it is all too easy to assume culture is someone else’s job. In reality, brand managers that engage in influencing the culture of the organization see increased engagement with the brand, better alignment in the delivered brand experience, and ultimately, increased brand contribution to the value of the business.

Communication

Communication before, during and after a merger is essential. Failure to ensure every stakeholder understands, supports and is engaged in the successful outcome of the merger or acquisition will, at best, result in lost benefit realization or, at worst, a complete breakdown of the merger. We will explore the intricacies of the communication needs in more detail in part two of this article.

In Conclusion

A recent McKinsey study points out that while many leaders focus on operations and finance during a merger, the most successful integrations leverage marketing to define the new company’s vision and deliver the new brand strategy effectively. By leading this narrative, marketing can help the new entity achieve up to 60% higher revenue, reduce employee turnover, and improve customer experiences. 

Key steps include assessing the value of both brands, aligning them under a coherent architecture, and ensuring that brand and culture move in unison.  

Successful mergers are built on more than operational integration; they require a compelling brand strategy, a unified culture, and clear, transparent communication with all stakeholders.  

Part II in this series explores the what we mean by elevated communication. How have successful brands managed their communications across all stakeholders during this critical time? Read on to learn some key takeaways from the trenches.