Brand building after the merge: forging a new identity after a merger or acquisition is critical to maintaining a strong client base. Management looks at a few examples of how some companies are doing it right.

It was a merger of equals: four provincial telephone companies -- NBTel, MTT, IslandTel and NewTel -- came together in March 1999 to form a company called Aliant Telecom. Today, more than four years after the merger, the telcos are about to shed their individual names in favour of the Aliant brand.

"We feel the timing is right to make the shift," says Heather Tulk, Aliant's vice-president of marketing and broadband. "A view was starting to rise within the local communities that there were really two entities: the local phone company they know and this unknown company, Aliant. Anything negative at all was being attributed to this unknown Aliant, and anything good was attributed to the old brand."

Building a brand -- that delicate but powerful combination of tangibles and intangibles that define what a company stands for -- is a considerable undertaking, one that takes time and substantial resources to accomplish. But when merging companies take existing identities and combine them or -- as is the case with Aliant -- forge a whole new entity, then the task of branding takes on even more epic proportions, with many sensitive issues to address and very little room for error.

"Building a brand after a merger or acquisition is, without question, more challenging than building a brand for a brand new company," says Mark Clemente, co-author of Winning at Mergers and Acquisitions: The Guide to Market-Focused Planning and Integration. "If it's a brand new company, you're working with the proverbial blank slate so you can establish a new product line, create an identity and institutional image in whatever way is deemed appropriate by the founders of the organization.

"With a merger or acquisition, you have existing products and existing ways of doing business which now have to be changed. And you also have existing perceptions of the companies, both internally and externally. And those perceptions, which took years to form, are not easily altered."

M&A critical care

Although post-merger branding strategies vary, the successful ones share common denominators, says Clemente. These include long-term planning that begins even as the idea of a merger or acquisition is being bounced around, ongoing two-way communications with all stakeholders, and consistent follow-through with anything and everything the new brand promises to deliver.

These rudimentary elements may seem like a given, even to those whose expertise lie outside of marketing or branding. Yet many companies sign and seal merger agreements with less-than-adequate branding strategies. Worse, some don't even think about a branding roadmap until after the merger.

"We've been brought in as post-M&A doctors after some of these deals," says Clemente, who is also president of Clemente, Greenspan & Co., Inc., a New Jersey research, training and consulting firm that specializes in M&A planning and integration. "In many cases, the problems were a result of things being done haphazardly, where there was no brand strategy articulated for the combined company. They were just kind of winging it."

The absence of a well thought out branding strategy can be disastrous for merged companies and their stakeholders. Customers already wary of changes may be put off or confused by a merged company's failure to clearly establish and communicate its new identity. Employees still grappling with the new realities in their workplace could find their confidence eroded further by the lack of a solid corporate image--a crucial element that so often forms the basis of a company's culture. And as far as investors are concerned, ambiguity is never a good thing, especially when it hints of poor management and planning.

Catharine Fennell, managing director of Customer Centered Consulting Inc., a Toronto-based firm that specializes in marketing strategy and branding, says merging companies need to create a pre- and post-M & A communication strategy that outlines who needs to know what, who needs to know first, and when they need to know it. For instance, where public companies are involved, the strategy will likely put investors on top of the list of people who need to know, followed by the trade press and then consumers. Where a consumer brand is involved, consumers will probably be considered the highest priority. Whatever the nature of the strategy, says Fennell, it needs to involve all the stakeholders in the merging process.

"Do not make your plans a secret," she says. "Keep them open to the extent that you can involve stakeholders and consumers and build their interests into your communication strategy. Raise awareness about what you're doing before and during the merger. Ask them what they want to see in the integration and how they would like to see the transition executed. Then after the merger and the transition, follow up to remind people what the value of the new brand is."

Brand value

Fennell says merger planning should include an audit of the companies' brands. Based on these audits, merging companies can decide whether to maintain or redefine existing brands, or create a new one.

"What you need to consider is what equities and values are inherent in these brands," she says. "Over the last few years, we've seen companies attempt to come together--including large organizations with significant brand values--and create new, high-tech brands that sometimes are very empty and hollow and have no meaning. And given the tremendous amount of money needed to create awareness of a brand, it's important to analyse the values associated with existing brands before throwing the baby out with the bath water."

In the case of Aliant, each telco had been serving its corner of Atlantic Canada for more than 100 years and consequently commanded a high degree of customer and employee loyalty. So in addition to having to prove that the new company's products and services were as good--if not better--than the old telcos', Aliant also had to nurture its image as a homegrown company, deeply rooted and involved in the communities it serves.

"There was a very strong affinity between the local communities and their local telephone company, and we knew that this sense of loyalty to the local telco was based on a feeling of ownership," says Tulk. "So we wanted to make sure we put across the message that your local phone company has not been taken over."

Aliant's approach has been slow and thoughtful, one designed to wean customers and employees off the old brand and get them to accept the new. The year the four telcos merged, the Aliant name was brought in merely as a holding company brand and used mainly in communications with investors. The following year, the phrase "an Aliant company" was attached to the individual telco brands. This co-branding strategy continued into 2001, with the provincial brands always positioned more prominently than the Aliant name. By late 2002, the parent brand had assumed the primary position, with all marketing material displaying the Aliant Telecom name and logo on top and the provincial telcos enumerated underneath.

At the same time, Aliant made a point of being present at various community events and activities--the same events and activities the local telcos would have supported. Among other things, the company sponsored missing kids campaigns, sports events, employee volunteer and charity programs.

To further reinforce the new brand's positive image, Aliant ensured it was always tied to "good news messages" and product launches. For instance, when 7/24 service was introduced, Aliant positioned the enhancement as one of the benefits of the merger. But in taking this tack, says Tulk, Aliant has been careful not to promise anything it can't deliver.

"Our research was saying our customers were skeptical of the new company, so we really tried to show that we are a trustworthy brand through proof points--by solid actions and actual results," says Tulk. "Our existing brands had a lot of what we call 'forgiveness factor' which gave them a larger margin of error. But the new brand doesn't have that kind of history so the margin of error was very small."

Results of recent market research have affirmed Aliant's approach. "Awareness of the Aliant brand is quite high now, around the 90% range in terms of recognition," says Tulk. "We're also performing extremely well when it comes to reputation. In fact, we're recognized as one of the top companies in Atlantic Canada in terms of reputation."

Reinforced image

Compared to Aliant's four-year saga, the TD Canada Trust branding transition was an overnight phenomenon. Of course, the fact that the bank's new identity combined two existing brands--both of which boasted high market values--likely helped shorten the time required to establish brand awareness and acceptance. Nevertheless, TD Bank Financial Group, which acquired Canada Trust three years ago, had its work cut out for it.

"We went out and did very in-depth, one-on-one customer interviews to see what customers wanted," recalls Dominic Mercuri, TD Canada Trust's senior vice president of advertising and marketing services. "And we talked not just to TD and Canada Trust customers but to all bank customers. What we were looking for was what is relevant in a banking experience, and we wanted to see what all customers wanted. Then we created what we believe is the most attractive brand strategy and developed the TD Canada Trust positioning around that."

Contrary to what many people expected, TD Canada Trust's branding strategy didn't involve comparing the two institutions' brands in search of common traits. Instead, it focused on creating a new image based on the results of its customer research. And when it came time to communicate this new image--one built around the concept of comfort--TD Canada Trust made sure it covered all the bases.

"Our focus was on telling customers specifically what was going to impact them personally, as individual customers," says Mercuri. "We had a merger conversion booklet that went out to four million Canada Trust customers who were going to be converted to the TD system. And there were four million versions of this booklet because each customer got a customized communication. It was very costly."

The company also spent about $15 million on newspaper advertising to inform customers about upcoming changes and to drum up awareness of the new brand. To communicate its brand internally, TD Canada Trust organized several "road shows" for staff and distributed videos that expanded on its comfort positioning. It also created a "brand library"--essentially a manual that explains the meaning of the bank's comfort image, why it's important and how the bank plans to execute it.

"The biggest challenge," says Mercuri, "was to ensure that everyone not only understood what our positioning is but also understood how they could reinforce it in the job they do. Because it's not just the front-line staff that reinforces our brand, it's everyone and everything we do in the company. So the internal education process is really critical."

Internal support

A similar line of thinking defined the branding strategy at Direct Energy Essential Home Services, the new entity that was once Enbridge Home Services and Direct Energy. The result of two separate acquisitions by Centrica North America-a division of British-based Centrica plc--Direct Energy Essential Home Services unveiled its new identity at the start of the year. Employees were first on the list when it came to communicating the new brand.

"Our belief was that unless our employees had the capability to deliver the value of the brand to the customer, then we didn't feel we had the license to create a new brand promise," says Terry Taciuk, the company's senior vice-president of marketing. "So we began by defining our brand values to our employees. Then we followed up with extensive workshops that introduced these values to employees in their various functional areas, and explained how these values would change the way they worked in their specific areas."

Ultimately, says Taciuk, how well--or how badly--a company fares hinges on the strength of its brand. And that strength is determined as much by the degree of support provided by management and employees as it is by the effectiveness of the company's communication strategy.

Fennell at Customer Centered Consulting agrees. "Put your brand at the centre of your corporate strategy," she says. "Because a brand does not mean simply a corporate name, a visual look or a logo. It's about your organization, your operations, your systems and customer service strategy. It's about everything you do in your company. So you need to bolt that brand strategy into every level in your organization to make sure your ultimate promise comes through."

Marjo Johne ([e-mail]) is a Toronto-based freelance writer.