How to plan your marketing strategy when acquiring a competitor.
Acquisitions can be a great growth strategy for many businesses. They provide the opportunity to expand their footprint and customer base, while also increasing brand awareness and boosting their reputation. Throughout this process, many businesses are faced with big decisions on how to market the newly acquired company.
I recently had a client ask me about the appropriate marketing strategy for a local competitor that my client had just acquired. The client and I worked closely together to determine the right strategy for them. While it is not a one-size-fits-all approach for every company, there are several common questions that companies should consider when deciding the right approach for their situation.
To rebrand or not… that is the question.
One of the biggest questions that comes up during an acquisition is whether or not the purchasing company should keep the existing name or rebrand it to their company name. This is one of the most important decisions because there are so many things to consider before choosing which direction to go. Here are a few questions to ask yourself when faced with a similar situation:
- Product and services: Do you sell or service identical products? Consolidating products or services under one brand name can give companies an advantage when marketing their business and help them offer competitive pricing.
- Geographic location: Is the new company located in an urban area? Or is it located in a rural community? Rural areas may be sensitive to big brands or newcomers, especially if the business is a brick-and-mortar store and a staple within the community.
- Company reputation: Is the new company a well-known brand with a highly credible reputation? If so, the purchasing company may need to consider a slower transition to the new brand name or consider co-branding to minimize customer loss or confusion.
- Buyer profile: Are the buyers a different audience? If so, it may be beneficial to keep the brands separate so messaging to the different audiences can be customized and unique to their needs.
- Employment changes: Are there any major changes affecting the employees? Will there be lay-offs or building closures? Changes in staffing can impact the community and customer perception of the purchasing company. This is a sensitive area that should be given consideration when developing the marketing strategy.
Consider the Customer
Another important factor is the type of customer that the business sells to. Is the company business-to-business (B2B)? Or business-to-consumer (B2C)? The strategy could be different depending on the type of business and customer. B2B customers tend to have longer term relationships and more loyalty to the company. Whereas B2C companies may have customers that are easily swayed and quick to switch to another brand. When evaluating each of the questions above, considering the relationship between the company and customer should be factored into the equation.
Communication is Key.
A wise man once said “Good communication is the bridge between confusion and clarity”. Developing a solid communication strategy to effectively announce the acquisition is an equally important part of the equation. Once a decision has been made on the appropriate strategy, a decision must be made on how and when to communicate to customers, industry stakeholders, and the general public. The last thing any company wants is to create confusion or concern among customers that could lead to brand switching (aka: losing customers).
A piece of advice that I always give my clients is that being proactive will allow us to control the narrative. We want to tell the story and tell it well. Otherwise, consumers will make wrong assumptions and that can lead to a negative brand perception. During this part of the process, it is important to prepare for all the reactions and scenarios that could occur. A brainstorming session to outline all the possible questions that could arise is a great place to start. From there, a strategy can be developed to cover all possible areas of concern, and of course provide the appropriate information through the appropriate channels.
Train the Trainer.
The last step in implementing an acquisition marketing strategy is to ensure that employees are well informed about the acquisition and the changes that are coming. This is especially important because employees are the face of the company, and you want them to have an optimistic outlook so they convey that same optimism to customers and consumers. Internal communications should be scheduled prior to making a public announcement, and training sessions should be conducted to ensure employees have a thorough understanding and know how to answer any questions that arise. A helpful tool is the development of a FAQ document for both the internal staff and consumers. This could be provided as a follow-up to the training sessions and if appropriate, posted on the website or given to key customers.
In conclusion, an acquisition is an exciting time for a company. The key is to balance the practicalities of brand integration with the sensitivities of customer and employee perceptions. Remember, every decision should align with your overarching business goals while respecting the legacy and strengths of the acquired company. Whether you choose to rebrand, co-brand, or maintain separate identities, your strategy should be communicated clearly, both internally and externally. By focusing on these critical aspects – from understanding your product and customer profile to mastering communication and training your team – you can ensure a seamless transition and position your business for continued growth and success.
If your company is in the process of acquiring a new company, or considering it, Lumen can help you develop a marketing strategy to ensure a smooth and seamless process. Contact Lumen today to learn more.