Branding the wild two-headed merger! (Cover Story).

• Author: Bernstel, Janet Bigham
• Position: Problems of bank branding after mergers

Bank mergers and acquisitions can create marketing problems--bucking the brand like a rider on an untamed bronco. How do you handle two separate brands? The ultimate outcome of your merger could depend on your answer.

Special Report: Branding After Mergers

In this issue, we explore two perspectives on the topic of "Branding After Mergers."

The article beginning on this page examines some of the different approaches being taken in response to the problem of brand continuity following a merger or acquisition.

The article immediately following is a case study of how a Florida bank holding company created a new unified symbol/logo for its affiliates after a series of acquisitions.

Building a world-class bank brand is tough enough without the disruptions intrinsic to an acquisition or merger. Internally and externally, emotions are intense as separate corporate cultures struggle to become one. And, according to some brand experts, banks haven't learned to handle the transition well, despite the plethora of M&A's in the past several years.

"The impression you get from an awful lot of bank mergers is that afterwards the banks say, 'Oh my, now we have multiple brands, what shall we do?'" claims Sam Hill, co-author of The Infinite Asset: Managing Brands to Build New Value, and partner at Helios Consulting, Boston.

Brand blunders

There are a couple of merger faux pas that repeatedly take place in the financial services industry, according to Hill. There's what Hill calls "territorial rebranding," or one brand adding its mark to another. This is often a case of rebranding when they don't need to, he says. If the two are already big enough to support economies of scale in advertising, then run two brands at the same time.

"Territorial branding has no value whatsoever, it's just a mark that 'We bought you, now we own you,'" claims Hill. "For example, this thing that Citigroup has done by adding that red umbrella is nothing but a mark of ownership by Travelers."

Then there's the awkward "slam-it-together" method where the names are lumped in to make the losers feel better. When the moniker gets too cumbersome, names are dropped--until the next merger.

Of course, no one is supposed to mention the word "loser" in a merger environment. Yet Hill claims that when people in a merger talk internally about brand, they've really talking about power. People are often terrified for their careers, or at least confused, and begin battling for supremacy.

"Brand ends up being a proxy for something else," he says. "What usually shapes branding strategy after a merger is internal jockeying by internal political constituents."

Also, too many mergers, too fast, have weakened the strength of financial services brands. Hill likens it to constantly remodeling your house, and no one can ever use the bathroom.

"The timeline for successful integration is much, much longer than you think," claims Hill. "You can't get all the official trappings done in a year, much less the bigger issues such as migrating customer loyalty and building employee buy-in. It takes years."

Two positive strategies in rebranding after the merger according to Hill:

1. Forethought: Sit down beforehand and think through what the brand you're acquiring really means, and what you want to do with it.

2. Equity: Then, go with whatever brand has the most equity with the group you want to influence, be it customer, channel or investors.

The long view

Every organization facing a merger has to decide whether to go with one brand or the other, a combination or whole new identity. Like Hill, brand futurist Rick Jacobs...