Three steps to create lasting advantage through a business merger

David Martin

Lessons from a lifetime career of branding excellence 

David Martin has been leading businesses through brand evolution for more than four decades, and much of this experience has focused on mergers and acquisitions. At a time when the vast majority of mergers do not fulfil their potential, David shares his insight into what makes for lasting success when two companies come together.

I’ve seen the same story play out time and again. Ahead of a company merger, marketing and communications teams work around the clock to merge two brands ready for launch on day one. Then, two years later, the brand has undergone a rebrand. I wanted to understand why.

The answer is actually quite simple. No one knows what life is like on the other side of the door until they walk through it. Yet here we have teams coming up with brand strategy before the businesses have any experience of working together – they don’t yet truly know who brings what and where the advantages lie. Yes, you can anticipate your synergies and how merging as one entity builds success in existing markets or might open the door to new markets, but you need to actually work together before you can understand it well enough to brand it. There’s much work to do first.  

Step one: Manage audience expectations   

When companies merge, both employees and customers are thinking how will this impact me? Will I lose my job, will the products I know and love be taken away? There is much trepidation. So our first job is to offer them peace of mind, and we do this by following the first rule – do no harm. We need to understand what they want and what’s important to them, and we use this understanding to guide our behaviour when the companies come together.

This initial stage is mostly about managing expectations and making sure that any decisions made do not contribute to insecurities and fears. Our goal is to reassure target audiences that they won’t lose anything important to them, and we’re not going to make any changes until they’ve had a chance to input into where the opportunities might lie. We communicate this commitment to them by giving them an active voice through customer, investor and employee advisory boards.

This process can last throughout most of the first year of the relationship. It’s only when our target audiences feel reassured that we can start to have forward looking conversations. Often, customers are clients of both firms, so they can tell you where the synergies lie, where they would use one company and where they would use the other. We think of it as a Venn diagram and understand where the points of intersection and divergence lie. Consider Dexian as an example.

Dexian is the result of the 2021 merger between Digital intelligence Systems LLC (DISYS) and Signature Consultants. At the time, both companies were operating in similar spaces but their service styles were entirely different, which meant the intersection was large enough to establish them as a top tier firm, but the real differences and opportunities were in the corners. One customer told us they each deliver similar outcomes in different ways – both offered value and the customer loved having the power of choice. Merging the brands therefore didn’t make sense. We needed to manage the transition of the brands in the same way we managed the transition of the business.

When two businesses come together, this level of marketplace investigation is essential in understanding where and how to create distinction. Customers and employees can share valuable insights into the ways each company benefits in terms of strengthening their market position or leveraging opportunities in adjacent areas. This is the insight that informs business strategy. It shows us the capabilities we need to emphasize plus the roadmap that delivers advantage in the eyes of our target audience. Then, and only then, do we move into brand strategy.

Step two: Craft the promise to integrate brands, not replace them

The most successful brands engage their audiences though a compelling promise of value. Given what we now know about the business strategy, how do we ensure the merged brand fulfils the needs of that strategy and does so in a way that people can see?  Staying with Dexian as our example, we can explore how we created a compelling promise and selected a name that conveys the potential of the whole.

DISYS is a global managed services and staffing firm that handles large volume enterprise requests, such as finding 25 people with the right competence who are the right cultural fit for a new call centre. Signature Consultants excels at finding key employees who could take a business to the next level without disrupting it – to make sure they found the right fit both in terms of competence and culture. The opportunity presented by them coming together was to move up the value chain by offering a complete solution.

It was evident that the merged entity’s real value proposition was to serve as a guiding light and deliver greater agility and dexterity in the world of staffing, with real capacity to move from staffing into workforce solutions and enhanced workforce management. Which brings us to the name. Dexian – ‘Dex’ speaks to dexterity whereas the ‘ian’ suffix speaks to one who is highly adept or an expert. While this gave us a solid umbrella brand, audiences told us we needed to keep the DISYS and Signature brands until they were comfortable in letting them go.

First, we needed to wait until we had data that showed the equity in the new brand was equal to the equity in the current brands, and that both companies had been imbued with the value and advantage of the other. Once we had the data that told us customers think of Dexian when they hear DISYS or Signature, we knew we could consolidate under a single brand. Until then we needed to keep both brands as Dexian DISYS and Dexian Signature.

Step three: Fulfill the promise through an integrated culture and customer experience

What most business leaders will tell you is that creating the brand promise only amounts to about 25% of the value. They will tell you the proof of the pudding is in the eating – that you can promise anything you want but if you don’t deliver it through a compelling experience, then what you’ve done is a waste of money. So it’s critical to build out a fulfilment plan that enables the merged entity to deliver that compelling experience, starting with culture.

The work required to build and shape the culture of the new merged entity is essential. It means finding out how to ensure employees feel like they’re in a purposeful environment – that they have the autonomy they need to be able to do their work, and they see opportunities for career development and growth that were not available prior to the merger. Pivotal to this is helping people understand how they’re delivering value to their colleagues, and how their frontline colleagues are delivering value to the customers. Moreover, it’s clarifying the attitudes and behaviours best suited to delivering this value in the customer relationship.

This starts from the inside by building the culture, then moves out to the customer through relationship marketing. The voice of the customer gives insight into the decisions they make about us and the outcomes we hope to achieve on the basis of their relationship with us. We map the experience and sand down the pain points and leverage our advantages. We highlight the hallmarks that distinguish the merged company and ensure we deliver them with the same impact expected from each business pre-merger. 

Essentially, this third wave of work is experiential. While it starts with managing company culture, we then apply this to the delivery of value to the customer in a way that makes them say, your promise actually undersells how good you are. You’re way better than the brand you’ve created – which gives us permission to evolve.

A merger is a process of continuous evolution

The brand is organic. We keep shaping and shaping it. The experience is organic. We keep evolving  and evolving it, which makes for a long-term relationship – a strategic partnership. By understanding and managing perceptions and expectations, you bring people along with you so you don’t get out ahead of yourself.  

Most of all, you don’t have to make it perfect from day one.  Apple taught us that. Think of each iteration of your brand as v2.0 then v3.0, with each new iteration getting better and better. You just have to keep talking and involving and evolving – as you would in any other relationship. When companies come together, the whole point is to grow together, to evolve together because there’s never an end point to your mutual success. And that’s the key to ensuring that a merger is as successful as intended when the deal is first done.