Seven Principles for M&A Branding Success

Seven ways to create a strong new brand — and translate an M&A financial strategy into a compelling value proposition
chess pieces on stacks of coins

From a business perspective, few things are as critical to get right as a major merger or acquisition — and few things are as challenging.  According to the Harvard Business Review, between 70 and 90% of mergers or acquisitions fail, and on the long list of considerations for the success of any M&A activity, brand is one of the most crucial. One study found that companies that created a new brand following a merger or acquisition outperformed market expectations by 13%, while those that proceeded with business as usual or operated under one of the legacy brands significantly underperformed.

A strong new brand, built on a robust foundation of positioning and messaging, can translate the financial strategy into a compelling value proposition, unite the merged companies under one umbrella, and give all key audiences a ‘reason to believe’ in the new entity.

At such a significant inflection point, there’s little room for error. Here are seven core principles for getting your post-M&A brand right:

1. Gain a 360-degree view

Although research is vital for any branding initiative, when there are two existing companies in play, getting a comprehensive view of the strengths, weaknesses, histories, audiences, cultures, and markets of each respective company is all the more important. Not only does it help identify any shared DNA that can be translated into a convincing value proposition for all audiences, but it can also uncover issues or challenges that a new brand can address, such as cultural misalignment, areas of weakness relative to the competition, and changing market dynamics.

2. Identify your strengths

Whether it’s a merger of equals, an amicable acquisition, or a complete takeover, identifying the strengths of both organizations – and making sure the future brand reflects them in a credible and convincing way – is critical. This means not only looking for the strengths that both organizations share, but also those unique to each organization.

3. Translate the value

Even the strongest financial rationale for a merger will never be enough for a new entity to succeed; it must be translated to a convincing benefit all key audiences can get behind: customers, prospects, employees, recruits, partners, and more.  A successful brand should be relevant to all key audiences and also resonate at the individual level. In the B2B space in particular, this often means moving beyond the table-stakes “whats” and the “hows” of the company’s value proposition into much more compelling territory: who it is, what it enables, and why it does what it does – in other words, the higher purpose around which both customers and employees can rally.

4. Integrate with the customer in mind

Bringing together two disparate companies may mean bringing together two disparate sets of offerings. How will the organizational structure and strategy for these offerings work with the new brand to align to customer expectations? Conducting research into existing brand equity and customer drivers of choice will help determine the right relationship between the new master brand and secondary offering brands, establish an effective nomenclature strategy, and ultimately unlock the value of the combined portfolio of offerings.

5. Engage and inspire employees

According to Bain, the number one reason mergers fail is unsuccessful cultural integration. A powerful new brand can help bring together different workforces, mindsets, and cultures, uniting employees around a common value proposition and purpose. Brands, and B2B brands in particular, are built from the inside out, which means that transforming your employees into willing and enthusiastic ambassadors of the new brand from the outset will make it that much easier to convince external audiences.

6. Launch with conviction

Once you’ve created the platform for the new brand, the work is far from over: a well-orchestrated brand launch can set the tone for the merger or acquisition and can be the difference between success and failure. Ensuring that key internal and external audiences understand the new brand and feel involved in and inspired by its debut will help eliminate misperceptions and apathy, creating a strong foundation for the future.

7. Sustain momentum

The combination is not the culmination; it’s the commencement. Putting in place the right tools and processes will ensure that a brand sustains itself – and flourishes – well beyond the initial launch period. Initiatives like internal training that encourages employees to ‘live’ the brand, brand councils that facilitate the delivery of a consistent brand experience, and measurement plans that take stock of brand performance will help ensure the health of the new brand – and the new entity – over the long-term.

To learn more about applying these M&A branding principles, contact us.

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