A game plan: marketing strategies after a merger or acquisition

July 5, 2022

Tackling the marketing strategy after a successful M&A deal can be one of two things: a huge accomplishment leading to new and happier customers or a quick path to the decline of a company’s brand.

There is rarely room in the middle. So getting the post acquisition marketing strategy right is of utmost importance.

Don’t treat marketing as an afterthought

As pointed out in most popular literature, the M&A failure rate lies between 70% and 90%. Much of that failure rate can be attributed to a poor integration strategy once the deal has closed.

While most are familiar with the example of the “culture clash”, i.e. the two companies with completely opposite cultural values not getting along during an attempted integration, there are much more simple reasons these deals can turn out to be failures.

Marketing is commonly one of these reasons. If not executed correctly, a merger or an acquisition marketing integration can lead to inconsistent value propositions, undifferentiated brands and a deprioritization of customer segments.

Keep the brand alive

Post acquisition, dive into why the target company’s brand is loved. And keep it that way.

An integration into a separate company can pose threats to the brand for obvious reasons: conflicting values, muddling the value proposition, becoming a cog in a faceless organization.

But even if a business is acquired and run as its distinct unit, separate from any other outside institution, there are still risks.

Especially if it comes to trust, customers might wonder if a change in ownership and likely leadership will take a toll on the beloved product or service they are used to buying.

Think for example ByteDance (TikTok’s holding company) would buy Snapchat. On the surface, both companies look similar enough. They are social media firms targeted at younger people.

But Snapchat users might love the app because they know their stories and data are not accessible by anyone else and thus their privacy is protected. TikTok’s users might not feel that concern quite as strongly.

Hence, ByteDance should be urged to first uncover why Snapchat users love the app and its brand, and secondly stress that this brand will be preserved. 

In this example, ByteDance could proactively communicate that none of Snapacht’s data will be transferred into its new holding company and remain siloed off from Chinese data centers.

Hence, concerned Snapchat users would immediately understand that the reason why they love the app still stands.

million dollar payout

Make external communication a priority

As shown in the last example, proactive external communication can save the acquisition target’s brand. But it can even be improved.

A merger or acquisition is an amazing opportunity to reposition a brand that strongly communicates improved value.

Especially if the old brand and marketing approach was subpar, a rebranding after the acquisition can be a shot at a second chance.

Highlight how the M&A deal positively affects the customer. This could be lower prices, improved customer service, increased trust through a strong partnership or many other factors. 

The key ingredient is time. These new benefits and brand improvements should be read by the customer as soon as they hear of the transaction. 

If too much time passes between the target audience finding out that their favorite business got acquired and why that might actually be a good thing for them, doubt and worry can be seeded. 

Promote the new brand

Once communication is out, the brand team has a lot of work to do promoting the new brand. Simply communicating a new added value or retaining customer trust when the deal is announced is not enough.

To cement the new and improved brand post merger or acquisition, a big marketing campaign with added budget is required.

Here, it is especially important to create a few aspects of the M&A brand strategy right beforehand.

First of all, define the new value proposition. As mentioned earlier, it is key in not only keeping existing customers engaged and excited, but also attracting new ones.

Secondly, create new customer segments in your market. A new value proposition might open your business up to new clusters of potential buyers. Identifying and directly marketing to them will help unlock them.

Thirdly, stress consistency. A merger or an acquisition might appear to customers as a break with the old, a new start. Highlight how you will continue to be consistent with the value you have provided before.

M&A marketing strategy checklist

There are a few critical questions to be asked ahead of designing a marketing strategy post acquisition or merger:

  • Will the brand remain independent or be integrated?
  • If there is an integration, will a brand be selected or will a new brand be created?
  • How will the value proposition change?
  • If aspects of the previous value proposition are cut, how will they be made up for?
  • Which channels do you have at your disposal to engage with your customers?
  • How will customer feedback be collected and implemented in the mergers and acquisitions marketing strategy?
  • Will the design change?
  • Will new brand and marketing creatives need to be produced?
  • Are all stakeholders aligned in telling the same new brand stroy?
  • Have market segments been re-examined? 
  • Has the new strategy been sufficiently communicated internally?

Conclusion

Whether a company is acquired or merged, marketing and branding need to be a key focal point in the integration.

It is especially important to reassure existing fans of the brand that they will still love the business post integration, find a new and improved brand strategy and communicate it swiftly. 

All of this work might appear as a lot, especially considering that there are many other factors to be considered in an M&A transaction. But effectively managing a post M&A marketing strategy oftentimes separates the successful deals from the many failures.

Further reading: The new M&A playbook, McKinsey, Best Practices for Centralizing Marketing Post-Merger

About the author
Jan-Philipp Peters

Jan-Philipp is the co-founder of BitsForDigits. He has extensive experience in the world of startups, tech and finance. Before building a Micro Private Equity marketplace, he worked for Google and Facebook.


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