During the past decade-plus of our agency’s history, we’ve worked in quite a few sectors and industries. But, there’s been one constant: a good amount of work with companies going through mergers and acquisitions. 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 M&A marketing, we’ve more or less done it all.
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 look back on the 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, which all makes it easy to forget that underneath all that is a bunch of people. And, people tend to get nervous around 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, the very things that 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 developed an internal brand-launch campaign a week ahead of the official public rebrand. This let 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 developed a year-long internal marketing campaign that helped employees across three continents unify around a single brand message, culture, and shared set of values.
While every situation has unique needs, we always encourage companies to be as transparent and open with their employees as possible, as early in the process as possible, and to follow up with a strong internal brand-building after any M&A event.
#2 – Listen to Your Customers
No-one knows what your customers want better than, well, 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, not only did we get to know our client inside-and-out. They learned new things about themselves.
That data was not only critical to designing a new brand and launch strategy from a marketing perspective, it helped AllClear’s executive team learn things about their perception in the market that influenced their decision-making going forward.
By listening to your customers, you’ll end up with a better marketing strategy and business strategy around your M&A 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, it’s likely you’ll fall under a parent brand or be rebranded. So, isn’t any money you spend on branding and marketing ahead of an acquisition wasted?
In our experience, the investments you make 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]. Over a period of 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, there was much more that 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 prior to acquisition. That’s somewhere between a 12.8x and 38.5x ROI.
It’s entirely possible that Pustinger is 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 even a 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 plays – at the very least – an important supporting role to all the company’s other operations. Without it, you’re going to have a much harder time achieving your 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 top of 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. It’s only with that kind of individualized data in-hand that you can make good decisions about the best marketing and branding for your specific situation.
Of course, if you’re looking for some expert help with your specific M&A needs, we’d be happy to help.