branding strategies for mergers and acquisitions - the spark youth empowerment platforms in Nigeria

Branding Strategies for Mergers and Acquisitions

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Learn the branding strategies in the face of mergers and acquisitions

 

By Ehime Eigbe-Akindele

In 2008, when Washington Mutual Bank fondly known as Wamu was acquired by Chase bank, I remember being nervous about what the acquisition meant for me as a customer due to the fact that both banks had totally different cultures when doing business.

I visited my branch and was assured my free current account and other benefits will remain the same since Chase would grandfather them into their structure. When the change finally came, this turned out not to be the case and I effectively closed my account as Chase lived up to my perception about their brand.

Mergers and acquisitions are more common than people actually realize. They bring about fear, panic, and conflict for all stakeholders due to the uncertainty it brings. A recent Harvard business review reports on the failure of mergers and acquisitions put it at 70% to 90%.

This is a ridiculously high number and I believe this can be avoided if the right brand and communication strategy is put in place leading up to the merger, during the merger & post-merger. M&As certainly have negatives and positives impacts but the negatives can be minimized while the positives highlighted to ensure success. Given this failure rate of most mergers and acquisitions, a well-thought-out brand strategy provides clarity and signifies that the leadership team is confident and decisive.

The core focus should be on customer retention, communicating a brand that appeals to stakeholders in both banks and ensures their buy-in. This is an opportunity for both banks to wipe the slate clean and bring to reality the ideal bank they want to create or to reinforce the narrative they already have in place.

As CEO Herbert Wigwe has stated ‘it’s ongoing business combination agreement with Diamond Bank will lead to the creation of a financial powerhouse.’ Business strategy is only as strong as the businesses branding strategy. Rebranding right will play the ultimate role in building internal and external credibility by aligning the contrasting offerings of both banks into a single, compelling value proposition.

A unified clear brand message map gives all stakeholders the tools to become effective brand champions. Access Bank has stated on their website that the new bank will retain the name Access Bank. For Access Bank customers, it is business as usual but it is more imperative not to alienate Diamond Bank customers and ensure their perception of the change is positive. Both banks seem to already have similar value propositions which weren’t the case with WAMU & Chase, so there is a greater chance with the right strategy of a 90% customer retention.

In the face of an M&A, it is important that whatever is being communicated to the customer is completely certain. Do what you say you will! If you say you plan to keep their bank accounts as they are with no changes then you absolutely have to do. It is best to start off a new relationship with the newly acquired customers on the right foot.

Build a foundation of trust as this will ease uncertainty and dispel mistrust. If you are unsure at the time of what steps would be taken on certain issues as mergers sometimes can be a long process, it is still best to communicate the uncertainty honestly than mislead a stakeholder. Consistency is key to building brand credibility.

Customer Retention should be the biggest aim of the brand and communication strategy since the goal of the merger is to build a financial powerhouse. This should be handled the same way you handle a blended family. Nobody likes change even though it is the only thing constant in life. Customers want to be assured that the complexity of the M&A would not affect the service they have grown accustomed to.

They need reassurance that this change will be more beneficial for them. I spoke to a Diamond Bank customer who told me ‘he moved all funds he had in his accounts’ the day after the merger was announced because according to him, historically such moves have led to customer funds being held indefinitely or completely lost.

There needs to be a strategy for customers who have this mindset, to reassure them that things won’t be done as they have in Nigeria’s past history. This merger presents a great opportunity for both banks to change the narrative and prove that banks in Nigeria can operate at international standards.

They need to upsell the benefits of the merger to the acquired customers. The people behind the brand need to ensure their strategy involves combining the right elements of both brands or a dual brand strategy approach where Diamond Bank customers receive the same unique value they have always received. I find this could work short term to avoid drastic changes that could upset customers but a more blended approach should be applied the long term to ensure fairness and a unified bank.

Sainsburys and ASDA announced a merger in 2018, these brands have different brand propositions as ASDA is known for its low-price items, while Sainsbury’s is known for high priced items as in the case of WAMU & Chase. What Sainsbury’s seem to be getting right in their communication is that they have observed the need to lower prices and communicate a more accessible brand image so as not to alienate ASDA customers.

If the goal of a merger is growth then strategy to win over a diverse range of customers is needed. In the case of Access Bank, their value proposition in comparison to that of Diamond Bank isn’t that different so it should be fairly easy to win over the newly acquired customers with the right strategy.

There should also be transparency throughout the process of the merger and ensuring due process is followed to avoid any appearance of impropriety as this can also affect perception and stock prices especially if it results in a lawsuit as we have seen in the past.

In 2012, Intercontinental Bank staff were reported to have resigned en-mass after the acquisition of the bank by Access Bank. If these reports are true, it is obvious to see that understanding and integrating both corporate cultures is extremely important. Here is a chance for Access Bank to do things differently.

The opportunity here is that both Bank now has an increase in the pool of talent at its disposal. A genuine process for retention in a position where the bank has too many team members should be employed. The process needs to be fair and transparent for the good of the company as they end up with the most qualified staff for the job along with timely communication throughout the M&A process to ensure employees are adapting to the change.

A unified strong message is needed in this time of uncertainty which both banks are seen at the moment to be doing well. A visit to both websites had very similar messages which communicate a solid communication strategy but this needs to continue as the merger unravels. To tip the scale of a merger or acquisition and actualize the full potential, the communication teams involved must be deliberate with prioritizing the right brand strategy.

 

Editor’s Note: This article was originally published in The Spark Magazine. Find the magazine here to read other articles.

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