Five things you need to know about: Branding pitfalls and imperatives for M&A

Much has been written about the failure rate of mergers and acquisitions globally. One of the chief reasons for failure often cited by companies is that financial and legal matters take precedence over the brand and customer during the integration process.

Derived from our collective experience consulting with companies, here are some branding pitfalls that anyone undergoing an M&A should consider, and try to avoid.

1. Failure to make an objective assessment of relative brand strengths.

Often in the case of a merger, people have a strong emotional attachment to the brands they’ve called their own over time, and naturally they do not want to see their own brand disappear. However, there are situations where only one brand can prevail, and it is important to make an objective assessment – often through stakeholder research – as to which brand that is.

2. Emphasis on the short term, lacking future perspective.

In our experience, brand consultants are often called in to work with companies only after the M&A deal has been announced or approved. Under such circumstances, branding then becomes the responsibility of marketing executives charged with the unenviable task of 'making the deal work'. Branding decisions may subsequently be made with the emphasis on doing what’s expedient, giving rise to solutions that then have to be changed in the longer term.

3. Marrying the incompatible.

When devising an M&A branding solution, it is important to evaluate and consider the core values of the entities being merged, and not to force a fit between them. In the event that two branded entities undergoing a merger are considered incompatible or in conflict, it might be more prudent to keep the two brands operating independently of each other, until this situation changes.

4. Lured by the new, casting aside existing brand equity.

A new brand is valid if the existing values, attributes or associations from the merged entities are irreparably damaged or unsuited to the merged entity’s strategic ambitions. However it is not a magic bullet. A new brand requires years of sustained input to imbue it with meaning over time.

5. Splitting brand strategy from business strategy.

M&A usually brings great change and uncertainty to any organisation, but a good brand strategy can help articulate a new direction for the branded entity as well as clear benefits for key constituents. Incorporating brand strategy early into merger discussions helps to tie it closely to the business strategy, ensuring that it is not delegated to the remit of the marketing department, or becomes an afterthought.

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