Mergers and acquisitions are on the rise. Fifty-seven percent of executives say they are planning a transaction in the next 12 months compared to 25 percent four years earlier.
Merger and acquisition transitions can be a turbulent period for your company if not managed correctly. While legal and financial challenges will occupy much of your attention, don’t neglect the broader variables affecting your brand and communication strategy. In this post, we’ll take a close look at how you can manage and protect your brand, your customers and your employees during a merger or acquisition.
Assess Your Brand’s Value
An organization’s brand is an asset much like any other company balance sheet asset. While largely intangible, it provides a set of visuals, value statements and organizational priorities that define the essence of a company’s mission. These elements express a company’s reason for existing and reveal its distinctive character. Some brands are better at giving life to an organization’s personality than others, and their effectiveness makes them more valuable.
When two organizations merge, it’s common for a conflict to develop between brands. Even if the acquiring company will assume dominance, remnants of the other brand may compete for influence over the new, combined company. It’s important to determine which brand possesses the most equity and which should take a subservient position. Perhaps elements of both should factor in the merged organization. Whatever the case may be, it’s wise to assess all brand attributes before establishing a transition plan.
When two organizations merge, it’s common for a conflict to develop between brands.
Consider using tools that offer an objective measurement of brand value, such as the Net Promoter Score, or consulting a brand ranking resource such as Forbes. These can provide an unbiased assessment of how a brand affects external audiences and potential customers.
Another option for appraising brand value is to survey customers or industry experts who are in a position to provide practical feedback about brand perceptions. These objective impressions may provide insight into how brands are viewed by the marketplace.
These approaches will deliver the information you need to make decisions about brand strategy. If you discover that one brand has greater equity than the other, consider making those brand attributes dominant in the newly reorganized organization. The next section will provide some suggestions on how to maximize brand value during a merger or acquisition.
Define Your Brand Strategy
Now that you have a better sense of which brand possesses the greater market value, you need to consider exactly how these dominant elements will factor into the new organization.
There are several scenarios to weigh, including the following:
- A combined approach: A joining of the two brands. An example of this tactic is ExxonMobil, the brand name after the merger of Exxon and Mobil.
- Absorption: In this scenario, one brand merges with the other, which becomes dominant. For instance, United Airlines became the master brand with the acquisition of Continental Airlines.
- An entirely new entity: The two brands merge to form a new organization with a new name, which was the case when Bell Atlantic merged with GTE, the entity was rebranded as Verizon.
Any of the above scenarios will require you to consider the implications for brand assets such as architecture, logo, color palette and core messages, so bear those considerations in mind while evaluating your options.
Get Your Brand House in Order
You’ve chosen the best approach to merging multiple brands into a single organization. Now it’s time to incorporate that strategic decision into your marketing assets so that they reflect the unified brand’s distinctive strengths. Every marketing asset should reinforce your brand strategy.
Carefully consider how each of the following play into your newly merged organization:
- Core brand messages, including Brand Pillars and Brand Promise
- Target personas
- Key marketing messages
- Sales collateral
- Pitch decks
- Print and digital campaigns
Having determined the role each of these assets serve in promoting your new brand, be sure to define the cost of updating them. Draft a timeline for unveiling the brand’s new identity to ensure you don’t haphazardly distribute inconsistent marketing assets. This will help you minimize unexpected expenses that may arise during the merger process.
Manage the Conversation
During the process of merging distinctive organizations, tensions may arise between internal and external audiences, including employees, industry experts and customers. Anyone with a stake in the success of the organization or its products or solutions will be eager to learn how the merger or takeover will impact their well-being.
To allay their concerns, it’s important that you proactively manage the conversation and the developing perceptions surrounding the transaction. Divide communication priorities into two categories, internal and external audiences. These groups have distinctive concerns. Considering their unique needs will aid you in developing effective communications.
Divide communication priorities into two categories, internal and external audiences.
Internal audiences consist of employees who are concerned about the future success of the organization following an acquisition or merger. Maybe they were employed by the company being acquired, in which case they are looking for reassurances that the new combined organization will thrive. The acquiring company’s employees may be worried about how incoming leadership or employees will disrupt their role or responsibilities.
External audiences include the public, your customers, your competitors and industry commentators. Plan to draft messages beyond the routine news release. These will need to address issues such as potential pricing changes, updated customer account contact information and overall policy changes, as well as providing assurances that the merger is a positive move for the industry as a whole.
To assure existing customers that the deal will not adversely impact them, create a launch plan for deploying a series of messages and deliverables addressing their key pain points. These items should specify the benefits achieved by the merger and convince customers that you are can meet or exceed former service offerings and levels. Equip salespeople and account managers with these tools, as they form the front lines of contact with customers.
A customer messaging launch campaign should include a number of components:
- Ads, both digital and print
- Email and direct mail campaigns
- Website content and landing pages
- Corporate launch video
- Social media posts
With a plan in place to reassure customers, it’s time to address industry commentators.
Manage Industry Chatter
Industry experts are likely to develop their own opinions and assessments of your merger or acquisition, so don’t delay in entering the discussion. Most industry advisors will comment on the merger’s advantages for the marketplace and may be critical of any perceived elimination of competition resulting from the merger. It’s important to anticipate potentially negative feedback and present a narrative that highlights legitimate customer benefits and concrete advantages. Devise messages that emphasize the unity and synergy of the combined organization by citing specific instances where customers stand to gain. Comment on how thorough your rebranding efforts have been, and dispel any concerns over the compatibility of the two corporate cultures.
Retaining Top Talent
Employees on both sides of the transaction are among the most important audiences to consider during a merger or acquisition. Your organization needs them, especially as it passes through a potentially turbulent period of adjustment. When a company is acquired, even if there is no significant impact on people’s jobs, the number of actively disengaged employees increases by 23%.
Create an internal messaging strategy to answer the following employee questions:
- Will my position be eliminated?
- Who is my supervisor?
- Who is the new organization’s leadership?
- Will I need to relocate?
- Will my benefits be affected?
- How will our culture change?
Even with a strategy in place, it may take up to three years to reach pre-merger levels of employee engagement.
The stages include:
- Initial excitement and concern.
- Reaction to changes, e.g., employee departure.
- Gradual adjustment to changes, return to normal activity.
- Cultural inconsistencies emerge after adjustment period.
- Period of personnel reallocation as performance evaluated.
Employee communications should address each of these phases, not only the initial period of transition.
Culture affects more than employee quality of life. It can hinder or promote an organization’s aspirations and define its character. When two organizations merge, the two cultures may contend for dominance. Rather than allow one culture to organically assume superiority, be intentional about determining which culture best represents the values of your new organization and take steps to protect it.
Don’t Wait to Respond
Proactively addressing the challenges and uncertainty of a merger or acquisition can minimize potential disruptions, promote harmony and collaboration within the new organization, and dispel rumors circulating throughout the industry. Communication is key, and having a plan in place will aid in keeping you one step ahead of the inevitable rumors and misinformation.