Integrating Acquired Brands into an Existing Portfolio
Anyone who has acquired a brand and integrated it into an existing portfolio can attest to the multitude of issues that need to be addressed. From brand name retention, parent company endorsement questions and managing customer perceptions, to brand mark, trade dress and personnel issues, the list can appear to be endless.
In our experience, businesses tend to focus on the transactional component of the acquisition, but it’s equally important to address the emotional aspects, which directly impact brand perception for weeks and months after the transaction closes.
In this issue, we’ll share what we’ve learned from helping a number of companies integrate acquired brands into their portfolios. While we are not attempting to write a step-by-step guide on how to acquire a brand, certain themes tend to recur. Of course, each situation is unique, and it’s important to consider every nuance specific to your situation.
Below are five key areas to address that will help ensure a smooth transition for all involved parties during the brand acquisition process.
- Brand Equity and Migration Strategies. You wouldn’t be acquiring a brand if it didn’t offer opportunities that you don’t currently have. But before you make the decision to keep the brand name or migrate it over to one of your existing brands, be sure that you thoroughly understand the relationship between the new brand and the loyal customers you are acquiring along with it.
- Relationship to the Parent Company Brand. Particularly in business-to-business, but also in the consumer marketplace, we’re seeing an increase in linking parent company brands to product and service brands. This strategy has both rewards and risks. But, before deciding to implement this strategy, a thorough understanding of the market perceptions of all brands is critical, including the parent company brand. Though it seems obvious, linking a parent company brand with even the slightest negative perception to a positively perceived product or service brand can be disastrous. Parent company brands that are strong in one marketplace may not necessarily be strong in others.
- Managing End-User Perception. End users are loyal to brands for specific reasons and, as a result, they’ve come to expect consistency. Any mention of an acquisition raises questions regarding continued consistency in the relationship. This is true both in the consumer and business-to-business marketplace. But when it comes to business-to-business brands, there’s an additional layer of concern with respect to how this acquisition may affect the end product. Be certain you know why end users and customers are loyal. Understand how they perceive the acquisition, and leverage the positives while addressing the negatives . . . don’t sidestep any issues. Address them directly.
- Visual Identity. When assessing the visual identity system of the acquired brand, the first thought might be any one of the following: keep it as is, update it slightly or reposition it. Our recommendation is that before you decide on any direction, look not only at your long-term business strategy, but at what you’ve learned about your customers’ relationship with and perceptions of the brand you’ve acquired as well your existing brands. Then, if changing the visual identity to signal a brand refresh or migration over to another brand is appropriate, implement and manage it well over time. Having a clear, well-thought-out transition strategy for the visual identity is critical if you are going to retain the trust and loyalty of end users and customers.
- Communicate with All Employees. When a brand is acquired, the people who have helped build that brand into the asset it has become are also “acquired.” To maintain strength during the months preceding and following an acquisition, clear, frequent communication with ALL employees within both organizations is critical. It’s important that everyone understand what both the parent company and acquired brand stand for, how to speak about them and sell them as part of the new, complete offering.
In navigating the brand acquisition waters, plan carefully, listen well, understand fully, and communicate clearly to ensure a smooth and successful transition.