Protect brands during acquisitions


May 15, 2019 // Thought Leadership

Company acquisitions happen every day. We usually hear about the big ones, but lesser-known companies are bought and sold all the time. As smaller companies become part of larger holding companies or investment firms, they risk of losing their differentiation, along with their brand equity. With markets becoming increasingly competitive, protecting brand value is more important now than ever before. Taking extreme care during these transitions is vital to protecting a brand’s equity.

There are several things that can happen when a company is purchased. It could retain its name and brand equity. It could be merged with another similar company 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 company is retaining its name after being acquired, it’s a good time to conduct a short brand re-discovery to confirm what customers and stakeholders value most about the company, brand, products and services. It can be as simple as a short survey. The results will serve as a guide for what should remain unchanged and what should be reinforced even more 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. Initial reactions to acquisitions are generally 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 using that opportunity to build brand equity, a company can promote what its brand stands for and reinforce the attributes customers most value.

In addition to external communications, internal communications play a vital role in ensuring a brand’s equity remains intact during a merger or acquisition. Employees need to hear how the changes will affect them and remain confident in their role of supporting the company and its brand. They’re the ones delivering service to customers so they need to be informed about what’s happening instead of hearing about it secondhand. Employee confidence in a brand translates outward to customers and the sales network.

It’s crucial all communications, whether internal or external, are consistent in their positioning of 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 instead of the value customers hold in that brand.

Protecting a brand is how a company builds long-term value. 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. That’s why protecting brands during acquisitions is so vital.