Merging brands almost always fails
Various studies show that a large number of mergers fail. The general aim of the merger within a merger is to build brand equity. Yet it appears that the brand value of the merged entity is often lower than it was before. This is unfortunate, because it can be easily prevented, especially by, among other things, discussing the brand at an early stage, preferably in the so-called ‘war room’.
The importance of brand value
According to research by Brand Finance and, as can also be read in the book Future-Proof Your Brand, brand value accounts for up to 18 percent of a company’s total financial value. Despite this critical percentage, brand value is often forgotten at the conclusion of an agreement between two companies. In the war room, only the legal and financial aspects are often negotiated, but the brand is forgotten. This can have disastrous consequences for the merger and the new brand, ultimately causing the merger to fail.
A missed opportunity
It is understandable that the legal and financial aspects of a merger or acquisition are often the most important items on the agenda. However, it is often forgotten that customers do not gain anything from these topics and are most likely not interested in them either. They have opted for a certain brand and do not want to change that. That is a missed opportunity. The brand should be the most important factor on the agenda for mergers and acquisitions.
How do you merge successfully?
An important success factor in a merger is brand value. The brand manager should be present in the “war room” so that they can make it clear that the brand must be used commercially and strategically in this process.
Discuss the brand value of both companies in detail. How do they complement each other? How do they differ? What is the best way to merge them together? What is the impact of the proposed merger on the brand? And what is the proposition of the combined product? How do employees contribute to a successful merger?
By looking for the answers to these questions, you can build a brand awareness that can be stretched out like a warm blanket over the merger allowing customer can feel reassured by the newly formed company, resulting in a successful merger.
Discover more about the book ‘Future-Proof Your Brand’ here.
In June 2017, Marc Cloosterman and Laurens Hoekstra published Future-Proof Your Brand, a book that provides insights on brand implementation and brand management based on more than 25 years of experience.