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Mergers and acquisitions are part of the plan for many IT solutions providers that want to add scale or diversify their offerings and skill sets. While an M&A can certainly accelerate growth, it will quickly derail success and create confusion in a company's culture if the branding efforts aren't carefully considered and executed.
Instead of developing a branded house strategy, many channel partners and vendors continue operating with multiple brands. It's easy enough to rationalize this approach, especially if both parties have significant brand equity. Yet, these concerns are based in a common misconception that once you've established your brand, customers will always think of it the same way. This isn't true -- companies and brands can and do evolve.
Multiple brands muddle the message
The reality is this: Using multiple brands confuses customers and employees. Customers become unsure about what company they are working with, who to call when an issue or question arises, and what services and products the company offers. A better, strategic approach is to combine all entities under one brand, creating a "branded house" instead of a "house of brands."
The reason is simple: One brand delivering a portfolio of services is more powerful than two or three associated brands offering discrete services. Regardless of how you position the company logos together in your marketing materials, many of your key stakeholders -- customers, prospects, suppliers, partners and employees -- will perceive these organizations as working independently. And, because they literally don't see the connections, they don't understand your collective value proposition.
Unify your brand to build the business
You can avoid this dilemma by figuring out what it means for your organizations to function as a single entity. What do you do? How do you do it? Why do you do it? And for whom do you do it? The answers to these questions make up your combined brand promise.
With a brand promise established, you then need to determine what brand name will represent both companies going forward. Unless you have a multimillion-dollar marketing budget, use one of the existing brands rather than coming up with something new. Not only will you be able to capitalize on current brand awareness, you will avoid having to go through the complex -- and often expensive -- process of finding, trademarking and marketing a new name.
This exercise -- selecting the surviving brand name and defining what it stands for -- shouldn't be an afterthought. Instead, it should be considered as part of predeal negotiations and communicated in any public announcements about the transaction. Out of the gate, you need to be able to clearly articulate who you are, what you do and why you did the deal. And you need to communicate it consistently to all stakeholders.
Benefits of a branded house strategy
It may take some time -- and money -- to ensure that everyone understands your brand promise, but it will pay off in the end.
Among the long-term benefits of a branded house strategy are:
- Clear value proposition on the collective businesses for stakeholders;
- Easier and lower-cost brand management;
- Improved internal communications and organizational alignment;
- Streamlined ability to add future products and services -- or acquisitions -- under a master brand;
- Greater ability to defend market share with a stronger brand; and
- Potentially higher actual business valuation, or perceived value.
One high-profile example of a diversified company that has executed the branded house strategy is GE. Whether it's investments, financial services, engineering, among others, all activities fall under the GE brand name and its brand promise to deliver creative technology products, encapsulated in its tagline "imagination at work."
While GE is a household name, there are examples of successfully unified brands among IT solutions provider ranks. One of these is Computex Technology Solutions. This Ingram Micro partner is the product of a rollup strategy that began in 2012 when Stratos Management Systems acquired Computex and Nexus Information Systems. Stratos combined these three VARs and managed services providers under the Computex brand and created a shared vision of IT services excellence. In 2014, another company, ENET Solutions, was folded up under the Computex umbrella. Today, the company is one of the top 150 solutions providers in the country. Its overarching brand promise is transforming customers' businesses through technology.
By defining, living and sharing your brand promise, your company has the potential to achieve similar results from M&A activities and services expansion. Remember, a clear and concise branded house strategy is better than a blurred and bandaged house of brands.
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