Several elements play into a successful merger or acquisition, from finance to sales and from operations to HR. Leading up to a transaction, it’s not uncommon for business owners to focus more on these elements and not the area of marketing as an important part of their M&A strategy.
Marketing is an incredibly important part of ensuring the success of a deal and the integration of companies in the deal. In addition, effective marketing strategies can help the company create value and growth in several capacities.
Your Value Proposition
The first question to ask is how the merger or acquisition is specifically going to create value for customers and other stakeholders. The value proposition created by the deal should be clearly defined in order to create a vision that can be adhered to moving forward in all areas of communication. Customers should understand why the transaction could benefit them. Then, the organization should have clear, executable, integrated strategies based on that vision. If the process is managed with added value in mind and consistent execution, the deal can be a success story, with the business well positioned for growth.
Your Customer Base
Customer segmentation is an important marketing tool, and it is something that should be reviewed when integrating companies because you’re essentially combining two customer bases. This should guide your marketing strategy regarding how the combined or renewed offering of products and/or services is going to better meet customer needs and offer something new and exciting, especially for the most valuable customers. It would help if you also were prepared to reassure your customers regarding what is changing and how their service will not be disrupted, but improved. And you need marketing strategies to communicate these important points clearly to them, both leading up to the deal and following it.
One of the most important things you can remember is that your customers are on this M&A journey with you. Find ways to get them excited about why it’s good rather than be concerned about the unknown. Otherwise, you risk losing valuable customers on both sides of the transaction. Also, before completing an M&A deal, you need a plan for maintaining consistent delivery to your customers, and you need to communicate this plan. They’ll be paying attention to see if anything has changed, good or bad. Tell them what will change (or not) and deliver on that promise.
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Your Brand Strategy
Once you have defined your value proposition and reviewed your customer segmentation, you can more carefully plan out your brand strategy. Will you create a new brand, an umbrella brand, or keep the brands separate? This should be decided carefully and prior to the start of the integration process. Many executives need to put this off and try to execute the brand strategy at the time of integration. There needs to be more time and set the business up for clarity. You need a fact-based approach to creating the brand strategy to be ready to execute when the deal is done. It should be decided whether the transition will be done gradually or instantaneously. Each offers its own benefits. A quick transition can generate excitement and energy, especially when one of the brands is not as important in the purchasing decision process. A gradual transition allows for more time for customers to understand the new brand value proposition. The strategy should be based on the importance of the brand in the customer decision-making process regarding the equity of both brands and switching costs.
Internal Communication
In order to effectively communicate your brand strategy to external audiences, you need to ensure everyone is on the same page internally within the organization. This starts with the executive leadership team and extends to all levels. This is especially important for team members who communicate directly with customers, such as your sales force or customer service reps. Make sure your new brand position is clear, and make sure your staff has all the tools and training they need. All of their questions should be answered, and they need to be prepared to answer any of your customers’ questions. Also, give your team reasons to be excited about the new venture. If they feel passionate about the changes that are coming, they are more likely to be effective in communicating with customers in a positive and beneficial way. Nothing good will come of it if they are confused and worried that they could lose their job.
External Communication
When it is day one for the new brand, every single external communication should consistently reflect that which means you need to have your marketing team planning ahead and ready to go live on that day. Press releases should be done. Retail locations and contact centers should be ready to deliver new experiences. Your digital journey (web, mobile, and social media channels) should all be up to date with the new branding, as well as any other consumer-facing communications, including direct marketing and advertising. All of the “old” brandings should be removed from all channels in order to avoid confusion and diluting your brand. If it is not a complete branding revamp, then materials and CRM tools need to be designed with flexibility in mind so that any transitions can be done relatively simply and quickly.
Pricing
This is an area that is often overlooked in M&A integrations, but pricing management is an important sales and marketing function, and the oversight can be costly. However, pricing benefits are mostly seen within the first year after the deal, and having a pricing plan usually delivers a significant return on investment and gross margin improvement.
The Bottom Line
Thoughtful and effective marketing and branding integration is critical to post-M&A success. Consider all the areas that will need attention long before the integration, and you can create a strong foundation for value and growth creation.
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