Mergers and acquisitions are a common growth strategy for accounting firms in today’s rapidly changing marketplace. They unlock opportunities to expand into new markets, gain a competitive edge or acquire new technologies and talent.
Does M&A make sense for your firm? Before you say yes, consider this: They come with significant risks.
According to the Harvard Business Review, between 70% and 90% of acquisitions fail. But don’t be discouraged — many professional service firms undergo successful M&A each year.
While mergers and acquisitions can fill gaps in service offerings and client lists, it takes due diligence and a critical eye to ensure the move is strategic. Accounting firms often focus exclusively on the quantifiable aspects of an M&A — financial models, tax implications and employment contracts. But firms that fail to prioritize their brand and communications plans may face trouble down the road.
Without careful planning, accounting firms can undermine their client-facing brands, resulting in a loss of revenue and reputation.
It doesn’t have to be this way. We’ve put together a rebranding checklist to help you navigate a path to success.
Moving forward with confidence
Mergers and acquisitions can bring real value to both firms. But if the marketplace is confused — and your clients are left unsure where they fit within the new company — you can quickly diminish the strength of both the acquiring and acquired brands. Our advice: Start the planning process early.
Here are seven steps to keep your M&A brand adventure on track:
1. Understand the business context and make brand health a part of pre-merger negotiation. It’s not easy to combine two company cultures into one unifying brand that showcases the firms’ combined strengths, differentiators and value propositions. We recommend that firms begin the process with strategic planning sessions.
Leaders should discuss and agree on the strategies and tactics for integrating all aspects of the merging firms, including operations, marketing and culture. Decisions must be made on whether to rename the firm, adopt a new logo or co-brand. This will also be the perfect time to decide how marketing budgets and resources will be allocated.
2. Research the two brands. M&A pre-planning is a perfect time for independent brand research that assesses the relative brand strength of each company.
Consider hiring an experienced third party to assess your cultures and the marketplace they will be serving together. What values do the two cultures share, and where do they diverge? Is the clientele similar or vastly different? Do they deliver services in similar ways?
In an M&A, the positioning strategy of one or both firms may change — potentially radically. Make sure you can come out of the process with clear and compelling differentiators.
3. Identify areas of mutual strength and vulnerabilities. It takes a discerning eye to evaluate the strengths and vulnerabilities of both firms, but it’s necessary. Where are your two firms the strongest? Where are they the weakest? How will the M&A create an “enhanced” firm?
Having an honest view of the challenges and opportunities ahead will define your services and the messages that will resonate with your clients and prospects. It’s a critical step to supporting your organization’s immediate and long-term goals.
4. Select the emerging brand. It’s time to decide on a brand that differentiates the “new” firm from its competitors — and earlier versions of itself. Before you start building a brand, hard decisions must be made. Is a name change in order? Does your logo reflect your new company’s personality?
Remember, change is hard. The process may bring up strong feelings among leadership, employees and the clients you serve. Sometimes a gradual transition to a new brand is the correct answer. Other times a concerted focus on building the visibility of the new brand in the market is vital. Whatever path you choose, it’s imperative to get buy-in from leadership and employees at both firms so everyone feels part of the process.
5. Build the brand. The elements of your brand serve as familiar touch points throughout your clients’ experience with your firm. The visual expression of a brand brings your company to life for audiences. It suggests to buyers and job seekers if your firm is credible and different from other firms.
Take care retooling your firm’s visual identity. Choose your logo, colors, taglines and photography guidelines carefully. Then ensure the visual identity is clear and consistent across your website, sales materials, brochures, stationery and pitch decks. As with messaging, “speak” with one visual voice.
6. Don’t forget training and internal policies. Spend time listening to key stakeholders and representatives from across the new organization to help employees articulate defining characteristics and speak with a unified voice.
Align external communications across the firm from the beginning. Set the tone for corporate communications early to avoid potential crises in the months ahead. Ensure employees know all media and social media policies and procedures and equip them with the words and ideas they need to convey the brand successfully.
7. Measure. Measure. Measure. Throughout the branding process, monitor the ROI on your critical visibility and engagement metrics so you can evaluate your progress and pivot as necessary along the way.
One final thought
Mergers and acquisitions are a perfect time for firms to refresh their brand strategy. Your new branding can showcase how two very different company cultures come together to create an exciting organization that people will want to be a part of.
Timing is critical. Move quickly to energize staff, give clients confidence and generate interest in the public.
M&A branding is an art, bringing strategy and storytelling together. Done well, it can lead to solid revenue growth and strengthen your accounting firm’s position in the marketplace.
