Welcome to M&A Minute by Finch Brands. I'm Bill Gullan, President of Finch Brands, and we are a real-world brand consultancy. We help companies at key moments – often M&A moments – to strengthen, clarify and activate the full potential of their brands and businesses. Today, we're going to talk about how to do just that.
Understanding the complexities of brand migration
We've talked about brand migration and how often the migration path is – slow is not the right word – but careful. How do you know when the right time is to finish the migration or adopt that long-term brand architecture which often means sunsetting equities? In some cases, you might have used an endorser.
At some point, the intent is for that endorser to drop away or for the brand that's doing the endorsing to become the primary master brand. That's a time of change.
The importance of timing in brand migration
Often, we're called upon to answer that question of, "When or how will we know that the equity dynamic is right for the long-term brand architecture to be triggered?" Well, the answer to that is highly variable.
One thing that we've done to great effect is to basically say if we were to say 12 months, 18 months, 24 months, six months, three months, etc. The right answer is determined by the facts on the ground. In some cases, the right way to determine the right time to trigger the end of the migration is to use data.
What we can and often do is conduct rolling brand tracking research. Build a rubric of considerations and establish benchmarks and targets. If we're studying things like:
- Aided and unaided awareness
- Sense of brand trajectory
- Brand preference
- Degree to which distinctive elements of a new brand's positioning have been understood and are recalled by a target audience
If we establish benchmarks and targets, data will tell us when the time is right.
Leveraging brand equity study data to drive decisions
Let's say that our long-term brand architecture will ultimately replace a high brand equity acquired brand. Let's assume the equity of that acquired brand. Let's say the market awareness is 45%.
We may say that the right level of trigger for that brand to sunset and the acquiring brand to rise singularly in its place might be tied to the equity of the acquiring brand reaching 30 or 35% within that target audience.
Doesn't have to go all the way. But we need the acquiring brand that ultimately is going to be the main brand to have the right level of equity strength to determine when we're comfortable sunsetting or merging away from the acquired brand.
The risk of doing it intuitively is either that you wait too long and you miss those upside opportunities or you act too quickly. The full process of acculturating the marketplace to the new brand architecture approach hasn't gone through completely. So, you risk losing brand equity.
Using brand tracking for effective integration timing
Using data, brand tracking and brand health assessments to make timing decisions as opposed to something more arbitrary is a way of making sure that you're timing the market effectively. Plus, when you're doing brand tracking longitudinally, you can also use it remedially.
Let's say that you conduct a brand tracking study six months into a brand integration process. You find that the master brand may not yet be strong enough or known enough within the target audience for the sort of full transition to take place. You can assess the gaps of strength and that can help you shift your marketing mix.
It can help you shift your communications approach so that you are taking the right kinds of actions to help that master brand get its feet underneath it and gain the requisite strength to become all that you intend for it to be.
The power of a data-driven approach to M&A
So, today's topic was really how to make that timing decision and in the right circumstance. We believe that using a data-driven approach to brand health assessment and brand tracking is the most accurate, safest and highest potential way to do that.
Finch Brands is a real-world brand consultancy that specializes in insights, strategy, and design, and has helped dozens of clients build successful post-M&A brands. We do this by helping clients win when it matters most by helping them own the change moment.