For successful marriages

A marketing perspective from AC Nielsen on the considerations that the Financial Services Industry in the GCC region need to look at before a merger.

Mergers and acquisitions in the region are becoming more and more common. As banks and other financial institutions eye the GCC landscape, and look at its staggering growth rates, the opportunities to acquire and absorb a current player are increasingly being whetted by various players in the industry. But mergers can too often be minefields, if not dealt with outside of the traditional balance sheet analysis. Leading management consultants claim that the majority of mergers do not earn back the costs in the short run. What’s more, mergers and the talk surrounding them can hurt stock prices. And mergers typically produce confusion, conflict, fear, anger and uncertainty among customers. This leads to customer poaching, as competitors target profitable customers who are not sure if the merger is in their best interests. Altogether, it can be an uncertain time for all.

From a marketing perspective, being the voice of both the customer and the brand, we can see that there are a few considerations that firms need to take. These include:

To the customer, the brand becomes the merger:

Like it or not, the world will see the new brand as a symbol of the “why” behind the merger. Developing the corporate brand so that it reflects the “why” accurately and appealingly is critical. It can happen only if you ask the same appropriate questions throughout the merger negotiations that you ask throughout the branding process:



Why and how does our growth depend on this merger?

What does it do for us that we could not do on our own?

What can we expect from the future?

Will this merger shift our values, mission, or vision?

What do our investors, our employees and our customers expect from us?

Can we manage these expectations? How?

What characteristics and competencies combine – and live – in our core brand?

Failure to understand and articulate the brand from a customer perspective will likely lead to pressures on the merger itself.

Communicate and position the deal: Visibility among the media, employees, customers, shareholders and regulators is at an all-time high during the announcement of a merger or an acquisition. Prepare clear, concise, consistent ways to communicate the business logic behind the deal to all audiences. Good and timely corporate communications will influence opinions of all constituencies.

Leverage the brand: The intensity of the merger can offer moments of creative brilliance if you actively consider the brand’s role in the deal. It’s common, for example, in announcing the deal, for the big fish to swallow the smaller, along with its brand. This is not always good for long-term brand-building. Granted, it can pay to adopt one or the other of the existing corporate brands, if that brand will work hardest on behalf of the merged company and accurately reflect the combined vision and intent. And of course, sometimes other considerations force both brands to be subsumed within a new one.

Stay consistent: Consistency is key to building brand credibility. Be sure to coordinate communications so that one merger partner does not unintentionally contradict the other. The designation of a single corporate spokesperson, a chief communications officer for both sides of a merger, indicates the acceptance of consistency as a critical element.

Understand your brand: Prior to undergoing any merger, the consistencies or the disparities between brands should be investigated. By researching each brand among customers, marketers can understand the potential synergies and formulate necessary strategies to best deal with any merger.

Create internal buy-in: A merger can be very scary for employees, who typically feel apprehensive when they start to think about what it means for the business, and more for them personally. Carefully thought out and well-executed internal communications, and the infrastructure to support the brand over time will pave the way.

Track how you are going: In order to work out any customer impact and determine any brand-related responses, you need to be equipped with the right information. As such, you should regularly track your brands’ performance in relation to that of your competitors in your customers’ head space. Without this, you will be flying blind, the outcome of which can be very expensive.

At Nielsen we believe success with your customers comes from how well you tell the story. The bank or brand with the best story wins.

For more information please contact: George Mikaelian (George.Mikaelian@nielsen.com) or Tahir Khalil (Associate Director, Financial Specialist) (Tahir.Khalil@nielsen.com).

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