Brand Thinking
There is no universal brand strategy that applies in all B2B company acquisitions.
Developing a branding strategy for acquisitions can be straightforward, if a process based on previous successful acquisitions is already in place, but at the other end of the spectrum it can be complex, especially if it is somewhat of an afterthought when the dust settles after the deal is completed. Surprisingly common where the business, financial and commercial factors are the focus in acquiring the new company. Where you don’t have clarity already it is important to consider the alternatives that exist for acquisition branding strategies.
There are typically three alternative strategies within the mindset of companies when it comes to dealing with branding of B2B company acquisitions.
The first is to make purchases that compliment and expand their capability, either geographically and/or across market segments. The natural inclination is to rebrand and integrate the new acquisition into the acquiring company’s brand. This can be fast-tracked in the initial months following acquisition, or more typically there is a period of cross-over to allow a controlled change and integration that may last for 1 to 2 years. Sometimes with a co-branding change to ease clients toward the full rebranding and other times leaving the historical branding in place to more gradually move the business across.
The second is to be open-minded, considering how well established and strong the acquired company’s brand is in the market, allowing the potential to leverage well-established brand equity. When objective brand analysis and audit sees a highly valued brand presence and reputation, this can mean a decision to keep the company branding in place in the medium to long term rather than absorb them into their brand. A sub-set of this strategy is a holding group approach that consciously allows the acquired companies to carry on trading with their existing branding. Many creative agencies like this business model.
The third is when there is more of a meeting of equals and both parties have a considerable level of brand visibility and key client loyalty, even if one is buying the other rather than merging the two companies. Nonetheless a full rebranding to create a new entity with the combining of brands can make sense. This is very common in the healthcare, pharmaceutical and professional services sectors.
The main point here is that there is no universal brand strategy that applies in all cases. Ideally, if you have a business growth strategy based on acquisitions then you should have a clearer view on how you deal with the new acquisitions, on the brand side of the equation, in advance of the deal being done. Quite often, as rapid expansion is taking place, branding is done on the run without a fully defined acquisition brand strategy in place, that is well understood and consistently applied. Allied to this is the need to define a Brand RoadMap that sits as a complimentary element of your overall brand strategy. Defining and planning your branding is as important as it is for financial, HR and IT integration post-acquisition.
It is crucial that your decision on the best route amongst the alternative brand strategies for M&A, and the RoadMap that gives it substance, is carefully considered and implemented to ensure a smooth transition, keep staff motivated and maintain customer trust. This is often a time of uncertainty and speculation. The last thing you want is to lose good people or destabilise key client relationships as a result of a turbulent period of change. Strong internal and external brand communications based on a well-defined brand strategy helps avoid the potential negativity of corporate change.
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