- B2B marketing leaders in today’s highly acquisitive environment must be prepared with a plan to take action on day one after an acquisition
- From a logical brand integration strategy to a thoughtful approach to communicating with internal and external stakeholders, marketing plays a critical role in successful integrations
- In a Summit 2020 session, Julie Ogilvie shared a strategic decision-making framework for when and how to integrate acquired brands and a process for ongoing communication with internal and external audiences
In the 1984 film Ghostbusters, the titular team of parapsychologists bursts into New York City Hall to warn the mayor of the city’s impending destruction by evil paranormal forces. When the mayor doesn’t quite understand the magnitude of the problem and the urgency of addressing it, Dr. Peter Venkman tries to put it into terms he’ll understand:
Dr. Venkman: You could accept the fact that this city is headed for a disaster of biblical proportions.
Mayor: What do you mean, “biblical”?
Dr. Venkman: Human sacrifice, dogs and cats living together — mass hysteria!
Though Dr. Venkman’s examples of calamity ultimately get the point across, dogs and cats living together doesn’t have to be disastrous. With proper preparation of the living environment, plenty of “getting to know you” time, and careful monitoring and mitigation of any signs of discord, pet owners can create a healthy, happy mixed-pet household.
In the business world, 790,000 mergers and acquisitions have occurred worldwide since 2000 — worth more than $57 trillion combined. Many companies aren’t sure how to evaluate acquired brands to determine the appropriate speed of and approach to a brand transition. Like a pet owner introducing a dog into a cat-occupied home, one company acquiring another must get to know the core attributes of the acquired brand, determine key similarities and differences between the existing and acquired brands, and bring the brands together in the least stressful way possible within an appropriate timeframe.
“The first question is whether the acquisition brings a new set of buyers — a new region, industry, buying center, or company size,” said Julie Ogilvie in her track session at Summit today. “Another type of acquisition is one that’s driven by a desire to expand the acquired company’s offering to its existing market. The key question here is how this offering will be perceived. Is it similar to the company’s current product, or is it a radical departure?”
It’s critical to understand the acquiring brand’s level of awareness and permission (or lack thereof) among the new market or buyers, and determine whether the value propositions of the two companies are fundamentally different or more closely aligned. Companies can use the SiriusDecisions Acquisition Branding Matrix to determine the acquisition type and drive internal discussion about the right course of action and timeline. The matrix contains the following four quadrants, which are plotted along two axes representing buyers and offerings:
- Quadrant one: competitive. Competitive acquisitions typically represent significant overlap in customers and offerings. The brand’s structure should be transitional over a timeline of six to 12 months. Brand and communications leaders at the acquiring company must reassure customers and employees of the acquired brand, be transparent about the brand transition and timeline through frequent communications, and engage influencers to ensure they understand and validate the acquisition strategy.
- Quadrant two: new markets. When a company makes an acquisition to sell to new markets or buyer types, the new market must understand the acquiring brand’s value before any action is taken. The brands should be combined within a period of 18 to 24 months. The acquiring company’s brand and communications leaders must get to know the details of the acquired company’s relationship to its audience, minimize disruption with customers and allay the fears of active prospects, and introduce their company to influencers to build relationships and credibility over time.
- Quadrant three: new offerings. “We often talk to companies that have been through a series of acquisitions and have over the years developed cluttered, illogical portfolios of products,” said Julie. Although new offerings can bring value to existing customers and expand the capacity for growth, they can become distracting if not rationalized into the portfolio. With this type of acquisition, the acquiring brand becomes an endorser of the acquired brand, on a timeline of 12 to 18 months. Brand and communications leaders at the acquiring company must articulate the “one plus one equals three” solution value of the acquired brand as part of the overall offering, evolve messaging to align with achievement of roadmap milestones, and educate influencers on their future vision and roadmap.
- Quadrant four: opportunistic. When an acquisition brings new buyers and new products, retaining the acquired brand makes sense for a time, but understanding the long-term strategy is important. The master brand’s structure maintains the acquired brand for at least 18 months — and potentially for the foreseeable future. If the intent is to leave the acquired brand alone, brand and communications leaders at the acquiring company must let acquired customers and employees know. If the intent is long-term strategic change, the acquiring company’s brand and communications leaders must start overhauling corporate messaging with existing audiences.
“SiriusDecisions believes that a strong master brand is the best choice for almost all B2B companies,” said Julie. “From an internal perspective, the master brand makes it easier to combine products into larger solutions. Marketing execution is simpler and cheaper, and in the long run, it tends to foster a stronger, more unified internal culture.”
But whether you’re integrating brands or dogs and cats, you need to follow a structured process and carefully consider emotional context.