The role of marketing in M&A

Marketing, in my view and according to studies, plays a vital role in the success of M&A which can often be overlooked. There is a breadth of areas in which it should be involved at both a strategic and tactical level. However, in the following I highlight those which merit prioritising.

Proposition(s)/value proposition

It is important to ask why are we doing this deal and how will clients benefit. All too often the value proposition can remain too wide resulting in a lack of clarity. Greater impact will be delivered from a clearly articulated value proposition that creates a shared vision from which integration teams can build their plans. Clients need to understand how you can benefit them in the long term. Without doing so there is a retention risk. This risk also stretches across other stakeholders, notably employees.

Clients

In relation to the client retention risk the 80/20 rule very much applies. Marketing should work with sales to identify key clients and have a clear, comprehensive and proactive plan developed which represents an exciting opportunity. In my experience clients will have a number of key questions e.g. will pricing change, will the service received differ etc. The key in the initial stages is to provide reassurance to support retention, therefore spend time on your communications. Clients expect minimal to no disruption so well prepared FAQs are essential. Also spend time on your messaging around new services/products you may be able to offer.

Segmentation

A transaction represents an excellent opportunity to look at the respective segmentations of each organisation and for marketing to play a lead role in defining how the combined propositions meet the needs of clients. It may well be that one approach is favourable to the other or a new segmentation is required to meet evolving market needs. Segmentation projects need time and investment so it’s important to be thinking about this at an early stage. You might be restricted pre-close in being able to fully understand the existing client base, which you will want to do as part of a segmentation exercise, but this shouldn’t stop you making a start.

Communications

This is a significant area and one that has a multitude of different stakeholder groups e.g. clients, employees, suppliers, regulatory bodies etc. With a clear view of why the deal is being undertaken it becomes easier to determine your overall messaging and how this is subsequently translated for respective audiences. Each will have their own questions they are seeking answers to. Employees, as is natural with human behaviour, will want to know what the transaction means for them personally. Regulatory bodies will want to know about intended governance and funding structures. Clients will, as above, want to know what will happen to the service they receive. Careful planning is necessary.

Brand

Brand is normally one of the top items on the agenda for executives, yet the approach taken may not always be as fact-based as it should be. Transactions present an opportunity to step back and assess the best brand architecture for the business moving forward. There are many approaches including maintaining separate brands, combining the brands, creating a single brand and creating a new brand. Brands are an emotive subject in M&A, not least of all from an employee perspective. It is, however, important to make the best decision for the business which will require, for instance, assessing the importance of brand in purchasing decisions, an objective assessment of brand equity, and the costs/benefits of any transition.

Organisational design

Depending on the nature of the intended integration, a new organisational design is likely to be needed. Given the value proposition will have been reconsidered to take advantage of the opportunities the transaction presents an assessment of what the design should be to support the future organisation is required. It can be common to establish a design based on previous experience. However, each transaction is unique and your design should be within the context of shifting market dynamics and client needs.

Scope

The temptation can be to identify everything that needs to be done and subsequently failing to prioritise the key areas which may include those I’ve mentioned above. They could also include other factors such as workarounds needed from a martech perspective before you can fully integrate, and both identifying and securing critical talent. The key areas will vary depending on the transaction and the respective maturity of each business and therefore what is and isn’t possible. Taking the time to assess and develop a robust plan is essential.

Involving marketing, and taking the time to clearly work through all the associated considerations has a material impact on the success of M&A activity.