Brand equity is the anchor in the storm


November 15, 2018 // Thought Leadership

Company acquisitions happen every day. Typically, we only hear about the big ones like Amazon purchasing Whole Foods or AT&T buying Time Warner, but lesser-known companies are bought and sold all the time. As smaller businesses become part of larger holding corporations or investment firms, they run the risk of losing their luster, along with their brand equity. In the face of competitive and consolidating markets, protecting brand value is more important now than ever before.

There are at least three things that could happen when a company is acquired. It could retain its name and brand equity. It could be merged with another similar business and a new name is created. Or if two or more similar companies are purchased, the company with the most brand equity is chosen as the name for the new conglomerate.

If a business is retaining its name after being acquired, it’s a good time to conduct a brand immersion to confirm what it is that existing customers and stakeholders value most about the business, brand, products and services. The results serve as a guide in knowing what things should remain unchanged and what to reinforce with customers during the transition.

Additionally, executing a communications strategy for current customers will help keep them informed about the acquisition and reaffirm the level of quality and service they’ll continue to receive. There’s nothing more detrimental to a brand than leaving customers to wonder what’s going to happen to their favorite product after they hear the company who makes it is being acquired.

Not only do customers need to know that a merger or acquisition is happening, they need to understand how it will positively impact the products or services offered by that company. Often, reactions to acquisitions are negative. Customers fear things will change, get more complicated, quality will suffer, etc. That’s why it’s important to communicate the positives about the change.

Another way to reaffirm a brand is to make it a part of the launch of a new product. A product launch almost always consists of some kind of strategic communications and marketing plan. So by using that opportunity to build brand equity, a company can promote what its brand stands for and the attributes customers value most.

Internal communications also play a vital role in ensuring a brand’s equity remains intact during an acquisition. Employees need to hear how the changes will affect them and understand their role in strengthening the company and its brand. They’re the ones on the front lines with customers so keeping them informed is essential. Their level of confidence will carry outward to customers and sales networks.

In all communications, both internal and external, it’s important to consistently position the brand. Inconsistent messages about an acquisition or in the way a brand is positioned are detrimental to brand value. When a brand loses value, it forces a company to compete on price alone, which is not a strong or lasting position.

Protecting a brand builds long-term value in a business. Brands go beyond a company’s tangible assets, the bricks and mortar. That’s why companies with well-known brands can sell their products at a much higher margin. The greater a brand’s equity, the larger the value at which a company can sell its products. And the greater the value of the brand, the greater the value of the entire company. So when acquisitions happen, protecting brand equity is absolutely essential.