Mergers and Acquisitions:  Marriage of the Brand-Kind

If anything has experienced an all-time bashing; it is the relationship called marriage.  The experts say that couples expend so much money and energy on conducting the wedding ceremony   and forget that the marriage itself is the most important  asset.

Marriage is often plagued by unmet and unfulfilled needs on the part of the parties involved and this  in the long run affects all those who have a stake in the marriage and may in the end lead to divorce and  dysfunctional families.

Now, let us take the marriage to the level of corporate brands. We have witnessed  a number of acquisitions and mergers in the Nigerian business scene in recent times;  and we are bound to witness even more given the economic climate.  

And  when a merger or acquisition occurs,  as it does in many of the cases in the banking sector, it leaves customers and other stakeholders worried about the status of their investment;  uncertain  about the outcomes of the merger or acquisition and   generally unsatisfied about  the way issues have  been communicated .

Let’s take the case of  Mr. Dada who appears one morning  at a branch of his bank  where a relationship of trust and courteous and responsive service  has been built for maybe a decade or more  and is greeted by a sign on a huge banner which says: “We have moved to ……” or worse still the sign  may bear another identity entirely – the name of the bank that has acquired  his own. 

Well, Mr. Dada is not so surprised because he has heard that his bank has been acquired by another; but in fairness to him, he did not receive any pre-warning about the decision to shut down the branch he was so used to. At the worst he had expected a change of name; not an outright closure.

In good faith, Mr. Dada picks another taxi and takes a ride to the new location where supposedly his bank and money has been relocated to; sure enough, the name of the bank has changed. He walks into the banking hall and is faced by a myriad of unfamiliar faces. He cannot locate a single known staffer from his former bank. His heart sinks.

Nevertheless, he takes  a deep breath and walks into the banking hall. He finds that while he has been told that his bank relocated, that was not the case at all.  He surveys the unfamiliar bank’s service  counter and sees two queues; one with one or two customers and the other with a long row of customers who are noticeably  dissatisfied. Naturally, he makes a move to join the shorter queue. When it is his turn to be attended to, he is told that he must join the long queue because that is  the queue for those who hold an account with his acquired bank.

Mr. Dada protests loudly, “But outside, we have the name of only one bank; why are there separate queues inside?”  He is told to join the other queue and he is offered no explanations. He joins the  very long queue that is being attended by a bank staff who appears rather disgruntled and uninterested in the plight of the long queue of bodies standing in line before him.

After a series of negative brand experiences, Mr. Dada made the decision to take his money  elsewhere.

The Lessons? Like any other marriage – one of the parties (usually the female) may need to lose her maiden name and take up the husband’s surname. In regards to brands, strategic thinking has to go into this naming ceremony – which of the two corporate brands  attracts the greater equity or which name brings greater equity to the corporate goals/ objectives underlying the merger or acquisition?  What brand promise is the merger/acquisition offering and how can the naming support this?

In some cases, parties involved have opted for  a compound (hyphenated) name – just as some couples in  a marriage situation may  decide to do.

But beyond the name that the couple chooses to bear, for the marriage to succeed, understanding the   cultures that both parties bring to the union must be a priority; especially with regard to leveraging those aspects of both cultures that ensure continuance of  favorable brand experiences and outcomes. It is not enough for the acquirer to swallow up the other  in such a way that even the brand equity of the acquired party is completely  obliterated. This would constitute a huge loss to the marriage alliance.

These are issues that need to be resolved long before the merger or acquisition is made public. Just as in the marriage situation, couples do not consummate their union in public. Rather, this is done in the secrecy of the bedroom.  The public only sees the pleasant outcomes; the fruit of the union – the pregnant wife and eventually, a bouncing baby boy or girl!

What are the  inherent strengths (in terms of  brand/product equity) of  the parties to the marriage that must  be harnessed?   What are the weaknesses that must be addressed? What strategies would need  to be employed to ensure that  customers  are not adversely affected  by the complex processes that  the  merger/acquisition  would involve?  How can these processes be handled in such a way that customers are not turned away?

According to Jeff Swystun,  director of global communications for DDB Worldwide:  <http://www.brandchannel.com/brand_speak.asp?bs_id=21> “The greatest flaw of many mergers and acquisitions is in not recognizing where the true value lies in the transaction”.  He notes further that: “Shutting down a redundant facility and purging a percentage of the payroll should not be the prime focus. Investment in the brand must come first to ensure revenue enhancement.”

Key issues to consider in a merger or acquisition are: The brand’s definition (what it promises); its culture (how the brand’s previous owner honored the brand promise); its infrastructure (how the brand is supported by distribution, marketing, promotion, advertising, and sales); and the visual aspects of the brand expressed by the name and uses of the identity, advises  Swystun. He warns that “If any of these elements change during integration, so will the brand’s equity.” 

Finally, one of the biggest  problems a marriage can face is when the  two people involved refuse to communicate; they refuse to communicate with each other; they refuse to communicate the problem with family and friends and they won’t even talk to a marriage counselor.  Likewise, communication plays a key role in determining the success or otherwise of a merger/acquisition relationship. Communication must be strategic,  stakeholder responsive and  painstakingly planned and deployed to preempt and solve the problems that will arise.

First published in PRaxis