This article originally appeared on Quirk’s Media.
A merger or acquisition is one of the largest shifts a business can undergo. It is a pivotal cultural, operational and financial inflection point that redefines a company’s business as well as its brand.
Mergers and acquisitions (M&A) hit a record high in 2017, increasing 109 percent in the consumer markets sector due to multiple significant deals. Amazon and Whole Foods; Disney and 21st Century Fox; and Michael Kors and Jimmy Choo were among the companies that utilized M&A in their quest to deliver seamless customer experiences and gain a competitive edge.
That spending spree persists today, with 69 percent of U.S. CEOs planning to pursue growth through new M&As in 2018, up from 55 percent last year. In the first quarter of 2018 alone, there were 3,774 deals globally totaling $890.7 billion, $393.9 billion of which has been invested in U.S. companies. With deals reaching 10 figures or more, you’d expect that all elements of the unification would be given their due diligence. Yet researching how all brands involved are perceived – both externally and internally – is more often than not low on the list of priorities when it should be taken into greater consideration.
Your brand is the face of your company. It serves as a guide in making key business decisions and represents how end-customers will form an opinion about your company. With M&As being such a critical, sensitive moment in a company’s history, it is vital to have a thorough understanding of how your brand, as well as any acquired brands, are viewed by target customers.
Research provides a tangible evaluation of the intangible: your brand. Well-executed fact-based research – primary or secondary; qualitative or quantitative – is one simple strategy to better understand your brand and acquired brand(s) that can help in the decision-making process and put a new entity on the right path. Because research is void of preconceived notions and internal biases, it presents a fact base to guide all other decisions.
During the M&A process, brand research should seek to resolve three key questions:
- Does your brand need to change?
- Why does your brand matter to customers?
- How does your brand impact employees?
Let’s take a deeper dive to get to the core of what these considerations entail.
Does your brand need to change?
The values, principles and core strengths that lay the foundation of your brand keep you grounded and honest, helping to illuminate the road ahead. Your brand should serve as a gut check for all actions and decisions your company makes, motivating both employees and customers.
One of the first big questions with M&As should be the following: does your brand need to change? In order to answer this, it’s important to understand the customer’s view of each brand. In-depth research will inform their level of familiarity in the marketplace; their perceived strengths and weaknesses; and the products and services customers expect and want from each.
The analysis gleaned from this perception research can tell you if each brand is excelling or lacking in the same area. If they happen to share many of the same strengths and weaknesses, it’s possible that not many changes need to be made. However, this is most likely not the case as a new brand is typically brought into the fold due to its ability to add something unique and valuable to the mix.
Research also takes the guess work out of adapting your brand to try and communicate this new value and how it impacts your key audiences. Brand positioning, architecture, communication and even design will be informed by the right research approach. It is only once this information is collected and analyzed that you can align on shared strengths, what to highlight and what to walk away from. It is what guides you on how to best tell your story.
Why does your brand matter to customers?
So how do you go about organizing the established brand assets in order to create a clear and simple brand message? The key is to align your brand with customer drivers of preference and purchase. Rigorous quantitative research approaches can identify what truly motivates customers to choose some brands over others. This is done through a derived approach which ensures that the drivers identified fully consider the subconscious scorecard customers use when deciding between brands.
Testing how you measure up against competitors on preference drivers will highlight the strategic steps your company needs to take. Aligning on a shared path forward allows for your company to deliver on what matters to the target audience while validating your position via the support of a truth held by your brand’s end-users.
How does your brand impact employees?
A common pitfall when evaluating the potential success of M&A is omitting what is arguably the most important audience: your employees. Since employees can either be your biggest brand advocates or your biggest roadblock, it is essential to understand their level of engagement and how they feel about such a significant change.
At a base level, simply communicating how decisions are validated by research will have positive effects during times of change, helping to give employees a sense of stability and understanding. Facts, evidence and reason can also help unite senior-level employees struggling with this new relationship, thus mitigating an issue which can threaten the process’s success.
As an added step, taking the time to research your own employee base ensures every stakeholder feels heard and can yield entirely new insights. Different brands bring different cultures along with them; being able to pre-identify any potential pain points ensures that a culture clash is minimized as two separate companies transition to a single unified entity. In order to do so, you must identify where the real brand champions lie in your workforce, and how best to leverage their drive and passion to get all employees on board.
Well-executed research is a looking glass that reflects your brand and company’s true essence off of your target audience’s perceptions. It can also serve as a highly personal listening tool, with end-users and employees opening up about their hopes, dreams and potential concerns for your organization and its peers. Research taps into and harnesses these insights in a way that best positions a newly unified entity for ongoing success and market dominance.
Marc Desmond is associate director of insights and business analytics at Siegel+Gale.