In the first decade-plus of our agency’s history, Echo-Factory worked in several sectors and industries as a branding and marketing agency. But, there’s been one constant: a good amount of work with companies going through mergers and acquisitions (M&A). In fact, at our last count, we found we’d gone through 21 M&A events with our clients.
We’ve helped companies who wanted to be acquired build value. We’ve helped companies who acquired smaller competitors integrate those competitors into their brands. We’ve helped two companies come together and create a unified brand. We’ve helped companies realize the value they were hoping for after completing an acquisition.
When it comes to merger and acquisition branding and marketing, we’ve more or less done it all as an agency partner.
But, as Socrates said, “The unexamined life is not worth living.” Socrates was a bit of a downer, but we get what he was getting at. So, we decided to reflect on the first 21 M&A events our clients have been through and draw out the most important marketing lessons.
#1 – Don’t Overlook the Importance of Internal Messaging
Companies are made up of humans. Obviously, but it’s easy to forget.
Mergers and acquisitions are generally driven by balance sheets, market forecasts, and the potential for efficiency, making it easy to forget that underneath all that is a bunch of people. People tend to get nervous about M&A events.
That’s why internal messaging is so important. Good internal messaging can build morale, allay worry, unify cultures, and drive purpose. It can improve employee satisfaction and, from a pure balance sheet perspective, drive productivity, efficiency, and growth, which are usually the goals of an acquisition.
What does that internal communication look like? It can vary widely. When we helped AeroPrecision and Kellstrom Defense become AllClear, we launched an internal brand campaign a week before the official public rebrand. This lets employees get the inside track on their new brand name and build internal momentum before the public launch.
When we helped rebrand Kapco Global and Avio-Diepen as Proponent, we launched a year-long internal marketing campaign that helped employees across three continents unify around a single brand message, culture, and shared values.
While every situation has unique needs, we encourage companies to be as transparent and open with their employees as possible, as early in the process, and to follow up with robust and internal brand-building after any M&A event.
#2 – Listen to Your Customers
No one knows what your customers want better than your customers. So, why not get their perspective?
In the lead-up to AllClear’s rebrand, Echo-Factory and our research partners conducted over 100 combined interviews of customers, partners, and current employees. Through that process, we not only got to know our clients inside and out, but they learned new things about themselves.
That data was critical to designing a new brand and launch strategy from a marketing perspective. Still, it also helped AllClear’s executive team learn things about their perception of the market that influenced their decision-making in the future.
Listening to your customers gives you a better marketing and business strategy around your merger and acquisition event.
#3 – Pre-Acquisition Branding Pays for Itself
Investing in marketing and branding when your company sees itself as an acquisition target can seem unintuitive. After all, when your company is acquired, you’ll likely fall under a parent brand or be rebranded. So, isn’t any money you spend on branding and marketing before an acquisition wasted?
Absolutely not.
In our experience, your investments in good pre-acquisition branding and marketing are likely to more than pay for themselves.
A while back, we worked for an energy-efficient lighting manufacturer, Precision-Paragon [P2]. Throughout 4-years, they spent a total of $390k on marketing. During that time, their valuation grew by $21.9 million, ending with an acquisition by one of their largest competitors, Hubbell Lighting.
Of course, much more happened in those years besides just marketing and branding, and it’s impossible to put a precise dollar amount on the growth it was responsible for. Still, in the words of [P2]’s CEO Ray Pustinger, “I don’t think the Hubbell acquisition would have happened without Echo-Factory’s work.”
In Pustinger’s estimation, the company’s $390k investment in marketing was responsible for between $5 million and $15 million of the growth before the acquisition. That’s somewhere between a 12.8x and 38.5x ROI.
Pustinger may be giving our marketing efforts on behalf of his company more credit than they deserve. We wouldn’t go into any relationship promising a 38x or 12x ROI on a marketing or branding campaign. We would, however, confidently say that when a company is targeting rapid growth ahead of an acquisition, good marketing and branding play – at the very least – an essential supporting role in all the company’s other operations. Without it, you’ll have more difficulty achieving your profitability and revenue growth targets.
#4 – There’s No One-Size-Fits-All M&A Marketing
We’d love to be the agency that came up with a universal formula for M&A marketing, sort of the E=mc2 of our industry. We could put it in a book, rise to the best-seller lists, and retire.
Sadly, we don’t believe that formula exists.
Every M&A event is unique. No two companies are the same. No two markets are the same. No two sets of customers are the same.
The most successful M&A marketing plans rely on a good amount of customized research and strategy specific to that event. Only with that kind of individualized data can you make good decisions about the best marketing and branding for your current situation.
Of course, if you’re looking for some expert help with your specific M&A needs, we’d be happy to help. Please take a moment to learn more about our merger and acquisition marketing agency to develop a new brand for your M&A.
