Marketing and brand integration is a central aspect of how a transaction is communicated to external shareholders. One of the goals, implicit or explicit, of most transactions is ‘increased visibility.’
Getting the marketing and branding component of integration right decides how effective that visibility is and in this article, we look at the best practices in M&A marketing and brand integration.
Key Aspects of Successful M&A Marketing Integration
1. Be aware of customer sensitivities
Remember that branding is often a key part of the customer value proposition. This is why consumer brands typically retain their name after an acquisition.
2. Value brand equity
We all know by now that brands have value, often by virtue of their age. Despite several bankruptcies, nobody ever considered changing the name of Rolls Royce.
People know the name Rolls Royce because the brand has been around since 1906.
3. Consider brand recognition
Would changing the target’s brand add any real value if it’s in an entirely unrelated industry or a new geographic market? It’s possible that by changing a brand of an acquisition, you risk confusing or alienating valuable customers.
4. Evaluate the cost
Between the rounds of PR, increased marketing expenditure, and updating every last piece of company marketing material, rebranding can become an extremely expensive exercise that many companies don't account for as part of their integration strategy.
Conduct a proper costing exercise before doing anything.
Post M&A Marketing Integration
Like every other part of the integration phase of M&A, the marketing and branding integration should be conducted using project management techniques.
This means employing the same tactics, tools, and software, used in project management.
At DealRoom, our platform is often used in the marketing integration process by customers and we can attest to the detail of the process. It led us to compile a wide range of integration templates which you can utilize for free, today.
Changing a company's branding is not about adding serifs to a logotype.
It’s not easy to see how something ‘fluffy’ can quickly turn into a maze of management problems - use project management tool such as DealRoom to overcome the inevitable obstacles.
A marketing integration process may proceed something like the following:
1. Assess the Brand Equity of Each Company’s Branding
- Use a hired expert if necessary. It is extremely important that this expert knows that their company will not be used for rebranding in the event that such a strategy is decided on. (it should come as little surprise to hear that 99% of rebranding experts recommend a rebrand)
- Focus on the aspects outlined in the previous section to develop a game plan for the marketing integration plan.
Use the findings from the above to decide which branding route to go down.
With the help of Deloitte's framework, the steps for M&A brand strategy integration are as follows:
- Retain the acquirer’s brand only.
- Retain both brands.
- Combine the brands (e.g. ExxonMobil).
- Create a new brand (e.g. Verizon from the Bell Atlantic-GTE merger).
- New corporate brand - i.e. when the companies retain their names under a new group of companies (e.g. WhatsApp, Facebook, and Instagram all becoming part of theMeta Company).
- Associated branding - similar to the above. More common in the advertising industry, where different firms are called, for example, ‘an Omnicon company.’
- Retain the target’s brand only.
2. Plan the Branding Exercise from Start to Finish
Ensure that it is as measurable and quantitative as possible. Include the following:
- Bring heads of both marketing teams together to discuss where they believe the value of their brand is.
- Define goals of the exercise (whether it’s to retain the acquirer’s brand only, retain both brands, etc.).
- Team or hires required to build new branding (if applicable). This should include issues around new websites, value statements, etc.
- Develop a timeline for communication with third parties (media, suppliers, customers, etc.).
- Discuss legal implications of name changes or changes of pre-arranged marketing budgets with legal counsel.
- Draw a long list of items that need to change as part of a rebranding (if applicable). This could include everything from company letterheads, to shopfronts, email addresses, and uniforms. Develop a timeline for implementation.
How does Marketing Integration Affect Post-Merger Performance?
It’s important to remember that marketing and brand integration is just one component of a much broader integration phase.
Integration adds significant value and these figures, by extension, include those of the marketing and branding integration.
Marketing and branding forms part of capturing the revenue synergies inherent in the deal, and integration research done by McKinsey suggests that 71%of companies believe they achieved up to twice as much revenue synergies by implementing a full marketing integration component to the integration phase..
Changing a company’s brand or marketing can be surprisingly traumatic for customers. Humans are creates of habit.
When brand specialists say that companies need to build a relationship, part of that is the familiarity that comes with the name and how the company communicates.
Changing this is sometimes necessary. It is always complex.
DealRoom has worked with several firms that have made the transition successfully.
Talk to us about how our project management platform can provide you with a springboard for own brand and marketing integration plan.