A time for attentive listening: marketing plays an important role in communicating both with employees and customers when your bank purchases another institution. By listening carefully to the needs and concerns of these new people, the marketer can take the steps necessary to retain them.

• Author: Marlin, Brenda
• Position: Acquisitions and Mergers - Company overview

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As a growth strategy, banks commonly acquire other institutions. What is the role of marketing when your bank makes a purchase? If you wait until the acquisition takes place before developing your marketing and communications strategy, it may be too late.

An acquisition always generates advantages as well as disadvantages for the purchasing bank. Smart marketers who have a game plan will be in a better position to respond to both possibilities.

There are a series of steps that marketers need to take when their bank acquires another institution. Use checklists to ensure that you cover everything. If you do your homework, you should be able to cope with an acquisition without major hitches. And, with flexibility, you will also be prepared to deal with the unexpected.

We spoke with three marketers currently going through an acquisition, or who have recently gone through one, to see what recommendations they could offer to other marketers faced with similar situations.

Pay Attention to the Customer

Alisha JR Johnson, CFMP

Senior Vice President and Chief Marketing Officer

Highland Bank

St. Paul, Minn.

Asset Size: $600 Million

Number of Locations: 8

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The bank uses a two-phase marketing and communications strategy during the acquisition process. First, they prepare the staff--employees of both the acquiring and acquired entities. Next, they prepare the customers of the acquired bank. "In preparation for the sale, we put a whole communications packet together," states Johnson. "Communication to both customers and employees is extremely important. If tile employees and customers are left to figure out for themselves what is going to happen, usually they will draw the wrong conclusion." The goal is to learn as much as possible, and as soon as possible, about the customers of the acquired institution--and then to use this knowledge to retain them.

One key tactic the bank used for customer retention was to meet directly with the acquired bank's top customers. Highland Bank's chairman of the board invited all the top customers of the acquired bank to his house for a wine and cheese gathering. He also invited Highland Bank's president, CEO and chief financial officer and their spouses. He thought this was right approach since news about the pending acquisition had already been picked up in the press. The special VIP treatment helped Highland to retain the acquired bank's top customers.

Johnson suggests that any bank that is considering acquiring another institution should realize...