As businesses evolve, they may merge with, acquire, or by taken over by other companies. Mergers and acquisitions (M&As) can present great opportunities to become more efficient, reach new markets and increase profits. But they are highly complex operations with multiple moving parts, and it’s well reported that a high proportion of mergers fail.
In M&As there tends to be a focus on financials, but it’s becoming more apparent that intangibles such as goodwill, intellectual property and brand equity are vital to success. Focusing on brand can provide the clarity and cohesion that supports mergers and acquisitions, communicating a clear vision for the future of the new organisation.
The first important question to answer is, what will the branding architecture of new business entity look like? When the two companies have very different personalities, it may be best for their public faces to stay the same after the merger, even if behind-the-scenes efficiencies are happening. Many mergers fuse the two identities into a new brand, such as EE, formed from T-Mobile and Orange. When one brand has a stronger reputation, this may be elevated over the other, as in Disney Pixar. And in the case of a significant transformation, an entirely new brand can be created.
Taking the right brand architecture decisions early on and supporting them with clever communications can be key to M&A success. More broadly speaking, there are a number of ways that working with a creative agency on strong branding can help companies avoid the pitfalls, and capitalise on the opportunities, of a merger or acquisition.
Four ways in which focus on brand can support successful M&A
Providing a north star
Strategic alignment to a common purpose is crucial to M&A success. Strong branding doesn’t just communicate this purpose, it can help steer strategy and co-ordinate organisational behaviour. And not just in the energy of the launch, but in the activation in the important months and years to follow. Brand can be used for setting integration priorities and planning initiatives, working out how to deliver consistent value to customers and employees over time.
Attracting new customers
A merger or acquisition can be a great opportunity to attract new customers. This is especially true when an entirely new brand is created and a rebrand can generate more energy around the relaunch, helping align the different business functions and get everyone pulling in the same direction. Embrace worked with Trivium Packaging, a new global brand formed from the merger of two leading metal packaging manufacturers. We worked with them to clarify the new brand purpose and communicate the value proposition to customers through its website. With a fresh look and feel, and new messaging delivers the things that matter to new and existing customers, it supports the growth of the business.
Helping employees get behind the company vision
Mergers and acquisitions mean change for employees – which can be scary and lead to negativity and resistance. Especially when one brand is swallowed up by another. Employees of the brand that has been acquired may feel their identity and the way they’ve always done things is threatened or has been unceremoniously swept away. For a company to succeed, its people need to get behind its vision and purpose – and this can only happen with a strong brand identity that is well communicated. In the best-case scenario, employees become brand ambassadors, who are proud of where they work and speak and act in line with its values.
Reassuring and retaining valued customers
M&A are times of change and there’s a risk of losing valued customers who don’t recognise the brand that they’ve grown used to. It’s up to marketing to leverage the new brand to create and share compelling messages about new offerings. Proactively managing the most valued customers with targeted brand marketing can help turn them into fellow travellers on the journey of integration.
Conclusion
Mergers and acquisitions bring about deep changes and can spark turbulent times. A focus on brand can bring much needed clarity and unity. Decision makers should leverage its power early on in the process to enhance the chances of success.
About Embrace
Embrace is a London-based digital creative agency that delivers substance, not just surface appeal. With a knack for getting closer to a business and its communication challenges, the agency discovers unexpected opportunities, and creates powerful ideas that take brands further. If you’d like to talk to us about your marketing needs, do get in touch.